Financial Management: A Pride career opportunities


Financial Management  of finance is of  vital importance for any organization. The field of finance is broad and dynamic. It directly affects the lives of every person and every organization. There are many areas and career opportunities in the field of financial management. The financial manager plays a dynamic role in a modern business organization. Financial managers raise funds manage cash positions, help increase acceptance of present value and select capital investment projects. The financial manager has emerged as the key player in the overall effort of a company to create value. Financial Management  is the needs and demands of business.Corporate sector of Bangladesh has been flourished rapidly since the early 1990s. Due to lack of efficient manpower and efficient capital market the expected growth is yet to be achieved. With the development of considerable number of profitable companies infrastructural development will also be ensured. In the same time it will help to increase the government’s revenue and standard of living. But only efficient and proper financial management can ensure the aforesaid positive expectations. For this reason financial management has immense importance for the overall devlopment of Bangladesh.

The task of managing the functions of finance can be termed as financial management. Financial Management is concerned with the acquisition, financing and management of assets with some overall goal in mind. Finance is the word used to describe both the money resources available to individuals, business firms, governments and the management of these money resources. Virtually all individuals and organizations earn or raise money and spend or invest money.  Financial management is the acquisition, management and financing of the firm’s financial resources, with due to regard for values in external economic markets. Financial management is the managerial process of planning, collecting, investment, management, protection and controlling of financial resources for the business firms.

Functions of Financial Manager –

The term financial manager is often used to refer to anyone directly engaged in making or implementing financial decisions. Financial managers are all those individuals whose decision-making responsibility affects the financial health of the firm. The principal functions of finance and the ones will study are listed below:

  1. Decision-Making Functions: (Major Functions)

The functions of raising funds, investing them in assets and distributing returns earned from assets to share holders are respectively discussed as bellow:

Investment Decision: Investment decision involves the decision of allocation of capital to long-term assets that would provide benefits in the future. Two important aspects of the decision are (a) the evaluation of the prospective profitability of new investment and (b) the measurement of an expected return against that the prospective return of new investments could be compared.

Financing Decision: Financing decision decides when, where and how to acquire funds to meet the firms investment needs. The central issue to determine is the proportion of equity and debt. The mix of debt and equity is known as the firm’s capital structure. The financial manager must strive to obtain the best financing mix or the optimum capital structure for the firm.

Dividend Decision: Financial manager must decide whether the firm should distribute all profits or retain them or distribute a portion and retain the balance. Like the debt policy, the dividend policy should be determined in terms of its impact on the shareholders value. The optimum dividend policy is one that maximizes the market value of the firm’s shares. Thus, if shareholders are not indifferent to the firm’s dividend policy, the financial manager must determine the optimum dividend payout ratio.

Liquidity Decision: Current assets management that affects a firm’s liquidity is yet another important finance function, in addition to the management of long-term assets. Current assets should be managed efficiently for safeguarding the firm against the dangers of illiquidity and insolvency. Investment in current assets affects the firm’s profitability, liquidity and risk. A conflict exists between profitability and liquidity while managing current assets. Thus a proper trade-off must be achieved between profitability and liquidity.

  1. Executive Functions:

For the effective execution of the finance functions certain other functions have to be routinely performed:

Planning: Planning for the ongoing activities of the firm and ensuring that the firm responds to the changing financial and economic environment.

Financing: Evaluating, securing and serving long-term financing from within the firm or from financial securities.

Investing: Investment and management of long-term assets through the capital budgeting process.

Capital Structure: Determination of the required rate of return through attention to the firm’s capital structure and alternative sources of funds.

Dividend: Distribution of profits to the firm’s stockholders via a cash dividend policy.

Current Asset: Securing, managing and investing in current assets such as cash, accounts receivable and inventory.

Short-term Financing: Obtaining short-term financing from creditors or financial markets.

Assessing Growth: Assessing the viability of growth via merging and ensuring the economic vitality of the firm.

Cash Management: Supervision of cash receipts and payments and safeguarding of cash balances.

Safeguarding: Custody and safeguarding of securities, insurance policies and other valuable papers.

Care taking: Taking care of the mechanical details of new outside financing.

Record & Document: Record keeping and reporting the financial information.

A firm performs finance functions simultaneously and continuously in the normal course of the business. They do not necessarily occur in a sequence. Finance functions call for skillful planning, control and execution of a firm’s activities.

Importance –       

Financial Management  is the planning for fund resources and raising, controlling and disposing of the same of a business organization with a view to attaining the ultimate goal and maintaining a good relation between its resources and the claim against these resources. The financial management is to plan how much fund is needed for currying out the operations of the firm. If a firm is to be started a new, it is to determine the cash needs. It is also responsible for making financial planning of capital budgeting, asset expansion, replacement of machine if it becomes obsolete or physically deteriorated. The proper planning of expenditures is fundamental to any financial management.The financial management to raise the requisite funds to meet the requirements of the business operations.Financial management responsible is to ensure the maximum utilization of fund for earning maximum return. So, funds of the firm must be efficiently managed to achieve the goal.The financial management is to control the use of funds committed to the operation of the concern. It must control the investment by checking the actual against the plan. The investment in operating assets must be carefully supervised so as to maximize their efficient utilization. The financial management is also supervised for taking care to protect the capital supplied by the owners and creditors. If accrued income and unwise expenses are incurred due to inadequate planning. The owner’s interest would be hampered. There are also the dangers of theft and embezzlement or misappropriation fund. The financial manager should therefore, have a close stewardship over the assets of the firm.The firm’s fixed cost remain constant while profits fluctuate at a higher degree than fluctuations in sales. Profit planning helps to anticipate the relationships between volume, costs and profits and develop action plans to face unexpected surprises. society. These can be summarized as follows :

  1. Increases total wealth
  2. Development of standard of living
  3. Counter mechanism against inflation
  4. Social welfare
  5. Creation of employment
  6. Industrialization
  7. Infrastructural development
  8. Improves investment scopes
  9. Attracts prospective investors etc.

Mission and goal of Financial Management in Bangladesh-

Creation of Efficient Manpower : Only efficient manpower or active human resource can contribute for the development of the country. Through the practice of organized and efficient financial management expected number of persons can be developed having the required management qualities.

Reducing Cost of Capital : In many cases inefficient acquisition of funds lead to the failure of
the project. Only proper selection of source of capital can ensure both reduction of cost and formation of optimum capital structure. Development of professional financial managers will help in this regard.

Modern Techniques in Project Evaluation : Proper use of funds can ensure both profit maximization and wealth maximization. In Bangladesh only a few companies use modern techniques for project evaluation. Investment decision is irreversible in nature, if a wrong investment decision is taken then it can’t be reversed without suffering a substantial amount of loss. In a developing country like Bangladesh funds are not that much available; thus loss of funds is not only damage the possibility of a particular project but it is also detrimental for the economy. Flourishment of financial management can ensure the use of modern project evaluation techniques vis-a-vis the appropriate


Formation of Efficient Capital Market : An efficient capital market can play significant role to strengthen the economy of the country and thus helps to boost-up the standard of living. Knowledge and use of financial management techniques are essential for the growth of an efficient capital market.

Best Use of Capital : Inefficient use of capital increases financial risk and interrupts the growth of a firm. Use of financial management theories can play effective role to ensure the best use of capital and contribute a lot for the development of Bangladesh.

Financial Institution and Financial Markets-

Most successful firms have ongoing needs for funds. They can obtain funds from external sources in three ways. One is through a financial institution that accepts savings and transfers them to those that need funds. Another is through financial market that organized forums in which the suppliers and demanders of various types of funds can make transactions. A third is though private placement. Because of the unstructured nature of private placement, here we focus primarily on financial institution and financial markets.

Financial Institution:

Financial institution serves as intermediaries by channeling the savings of individuals, businesses and governments into loans or investments. Many financial institutions directly or indirectly pay savers interest on deposited funds; others provide services for a fee. Some financial institutions accept customers’ savings deposits and lend their money to other customers or to firms; others invest customer’s savings in earning assets such as real estate or stocks and bonds.

The key suppliers and demanders of financial institutions are individuals, businesses and governments. Financial institutions are required by the government to operate within established regulatory guidelines. The major financial institutions are banks, non-banking financial institutions, insurance companies, leasing companies, pension funds and mutual funds.

Financial Market:

A financial market is a market for creation and exchange of financial assets. If you buy or sell financial assets, you will participate in financial markets in some way. Financial market is a forum in which suppliers and demanders of funds can transact business directly.

Types of Financial Market: The key financial markets are given below:

A: On the basis of Issuing:

  1. Primary Market: All securities are initially issued in the primary market. This is the only market in which the company or government issuer is directly involved in the transaction and receives direct benefit from the issue. That is, the company actually receives the proceeds from the sale of securities. A primary market is a “new issues” market and a firm raises new capital from this market.


  1. Secondary Market: Once the securities begin to trade between savers and investors, they become part of the secondary market. Secondary market is the market in which existing, already outstanding securities are traded among investors. In secondary market, the original issuer has no part in the transaction. This market exists to facilitate investor trading.

B: On the basis of Security/ Duration:

  1. Money Market: Money market is the market for securities with maturities of less than one year. Money market is the short-term market. It includes securities originally issued with maturities of one year or less. The major money market securities are Treasury bill, commercial paper, accounts payable, banker’s acceptance, letter of credit, negotiable certificate of deposit and repurchase agreement.
  2. Capital Market: Capital market is the market for long-term debt, bond and stock. The distinguishing feature of the securities that traded in capital markets is their life of longer than one year and common stock that has no maturity period. The major capital market securities are common stock, preferred stock, bond, mortgage and others debt instruments.

C: On the basis of Trading:

  1. Organized Security Exchange: The organized security exchange is the formal organizations that has physical location and exist to bring together buyers and sellers of securities in the secondary market. The security exchanges provide the marketplace in which the firms can raise funds through the sale of new securities and purchases of securities can easily resell them when necessary. Many people call security exchange as stock market. The organized exchanges in our country are Dhaka Stock Exchange (DSE), Chittagong Stock Exchange (CSE) and in abroad are New York Stock Exchanges (NYSE), London Stock Exchange (LSE), Tokyo Stock Exchange (TSE), etc.
  2. Over the Counter (OTC) Market: The OTC market is the market for the purchase and sale of securities not listed by the organized exchange. OTC is the term used to describe all buying and selling activity that does not take place on an organized exchange. The OTC market is made up of security dealers or brokers who use telecommunications; interact to create a market for various securities. The bonds and stocks are traded in OTC as opposed to being traded on an organized exchange.

 Careers in Financial Management-

Financial management is important in all types of business including banks and other financial institutions as well as industrial and retail firm. It is also important in government operations from schools to hospitals to other departments. The job opportunities in financial management include the follows:

(a) Chief Financial Officer;

(b) Portfolio Manager;

(c) Project Finance Manager;

(d) Capital Budgeting Analyst;

(e) Credit Manager;

(f) Revenue Analyst;

(g) Financial Analyst;

(h) Vice President Finance;

(i) Director Finance;

(j) Director Finance and Planning;

(k) Chartered Financial Analyst.

Careers in Investment Sectors-

Finance graduates who go into investments often work for a bank, insurance companies, mutual fund, pension funds, investment portfolio and brokerage houses. The job opportunities in this area are:

(a) Security Analyst;

(b) Security Market Analyst;

(c) Portfolio Analyst;

(d) Corporate Analyst;

(e) Pension Fund Manager;

(f) Put Option Analyst;

(g) Stock Broker;

(h) Credit Union Manager;

(i) Mutual Find Manager;

(j) Data Analyst;

(k) Financial Analyst.

Careers in Financial Institutions:

Many finance majors go to work for a financial institution including banks, insurance companies, mutual funds and investment banking firms. For success here, one needs knowledge of valuation techniques, interest rate, financial instruments (stock, bonds, mortgages, loans, deposit and so on). The job opportunities in this area are:

(a) Senior Vice President Finance;

(b) Corporate Banking Manager;

(c) Corporate Banking Officer;

(d) Credit Manager;

(e) Credit Officer;

(f) Management Finance Officer;

(g) Probationary Officer.


The last word finally about financial Management  is keep the proper decisions planning, and to make good financial decisions that is the survival kit for any organisations.

The career opportunities within each field are many and varied, but financial managers must have knowledge of all three if they are to do their jobs well. So, if you decide to make your career in finance, you will need to know something about the areas.Now a days,Financial; Management Career/ Professionals are not only playing the role or use of finances,also shouldering the responsibility of different areas in an organization like other carrers.Above tips may help to become a successful  careers.