Role of Financial Market for Supporting- myassignmenthelp.com

Question: Write about theRole of Financial Market for Supporting. Answer: Role of Financial Market for Supporting the Role of Financial Manager The role of a financial manager is very important in a corporation for maintaining financial stability through developing financial reports, raising funds and developing financial strategies for the long-term growth and development. The financial manager duties and responsibilities are associated with proper understanding of the financial markets that helps them to develop effective strategies for raising funds, profit planning and selecting the bets investment proposal. The financial manager holds an important responsibility of maintaining adequate liquidity position through marinating a balance between the debt and equity sources of funds. The financial manager is able to decide the ratio between debt and equity through understanding the financial markets conditions so that the business corporation is able to realize larger returns in comparison to the funds utilized in the future period of time. The financial manager is also able to carry out profit planning that is effective use of profit provided by the corporation through understanding the financial market characteristics of pricing, competition, economy state, demand and supply. Thus, it can be said that financial markets play an important role in supporting the role of a financial manager (Petty et al., 2015). Role of Financial Manager Job The role of financial manager at the business corporations can be stated as follows: Developing and publishing the general purpose financial statements for supporting the decision-making process of end-users Monitoring and Controlling the Financial Activities Supervising the employees involved in accounting and budgeting work Identifying and developing strategies for reducing the extra operational cost for improving profitability Examining market conditions for identifying opportunities of growth and business expansion Supporting the financial decision-making process of top management Developing an adequate capital structure of the corporation through maintaining an adequate proportion of debt and equity Identifies and develop effective strategies for mitigating the financial risk if any (Berk et al., 2013). Different Sources of Finance The different sources of finance that a financial manager may use for carrying out business activities of a corporation are as follows: Long-term: The long-term sources of finance can be used by a financial manager to meet the capital requirements for time-period of more than 5 years. The capital expenditures relating to purchase of fixed assets such as heavy plant and machinery can be acquired through such sources of finance. The long-term source of finance is equity and preference shares, bonds, long-term loans from government or financial institutions or venture funding. Medium-term: The medium-term source of finance refers to funding the expenditures relating to time-period between 3-5 years through leases, medium-term loans from financial institutions or debentures. Short-term: The short-term financing is usually done for meeting the capital requirements for a period of less than 1 year such as financing the current assets that are inventory, finished goods or nay other day to day business activities. The short-term sources of finances are fixed deposits, Creditors, advances received from customers, working capital loans from commercial banks (Javaid, 2015). References Berk, B. et al. 2013. Fundamentals of Corporate Finance. Pearson Higher Education AU. Javaid, J. 2015. Costs and benefits of raising capital through different sources. GRIN Verlag. Petty, J.W. et al. 2015. Financial Management: Principles and Applications. Pearson Higher Education AU.