Introduction to

Financial Management
Prepared by: Sir Benj Jamieson J. Duag
 Learning Competencies

The learners shall be able to:

• Explain the major role of financial management
and the different individuals involved. (ABM_BF12-
IIIa-1)
• Explain the flow of funds within an organization –
through and from the enterprise—and the role of the
financial manager. (ABM_BF12-IIIa-5)
 Specific Learning Outcomes

At the end of this lesson, the learners will be

able to:
• Understand the key positions in a corporate
organization and identify the roles of each.
• Identify the primary activities of the
financial manager.
What is a Financial Manager?

A Financial Manager is part

of a management team
whose ultimate goal is to
maximize shareholders
wealth.
The Corporate
Organization
Structure
Shareholders

The shareholders elect the Board of

Directors (BOD). Each share held is
equal to one voting right. Since the
BOD is elected by the shareholders,
their responsibility is to carry out
the objectives of the shareholders
otherwise, they would not have
been elected in that position.
Board of Directors

The board of directors is the

highest policy making body in a
corporation. The board’s primary
responsibility is to
ensure that the corporation is
operating to serve the best interest
of the stockholders.
Responsibilities of the Board of Directors

 Setting policies on investments, capital structure

and dividend policies.
 Approving company’s strategies, goals and
budgets.
 Appointing and removing members of the top
management including the president.
 Determining top management’s compensation.
 Approving the information and other disclosures
reported in the financial statements (Cayanan,
2015)
President (Chief Executive
Officer)
 Overseeing the operations of a company and
ensuring that the strategies as approved by the
board are implemented as planned.
 Performing all areas of management: planning,
organizing, staffing, directing and controlling.
 Representing the company in professional,
social, and civic activities.
VP for Marketing

 Formulating marketing strategies and plans.

 Directing and coordinating company sales.
 Performing market and competitor analysis.
 Analyzing and evaluating the effectiveness and cost of
marketing methods applied.
 Conducting or directing research that will allow the
company identify new marketing opportunities, e.g.
variants of the existing products/services already offered
in the market.
 Promoting good relationships with customers and
distributors. (Cayanan, 2015)
VP for Production
 Ensuring production meets customer demands.
 Identifying production technology/process that
minimizes production cost and make the company
cost competitive.
 Coming up with a production plan that maximizes
the utilization of the company’s production
facilities.
 Identifying adequate and cheap raw material
suppliers. (Cayanan, 2015)
VP for Administration

 Coordinating the functions of administration, finance, and

marketing departments.
 Assisting other departments in hiring employees.
 Providing assistance in payroll preparation, payment of
vendors, and collection of receivables.
 Determining the location and the maximum amount of
office space needed by the company.
 Identifying means, processes, or systems that will
minimize the operating costs of the company. (Cayanan,
2015)