Objectives of Financial Managers

Most managers realize that firm's main responsibility is for shareholders and particularly for increasing their wealth, and they often see this responsibility is conflicting with the social responsibility concept.

In business environment today, social responsibility is one of the demands that imposed on contemporary firms by an increasingly educated and sophisticated public, in a form greater than ever. So, it is important for firms to formulate a path to social responsibility the same manner that they evolve any other strategy of business. It is a significant challenge for managers, it needs to plan carefully, make decision, implement, and evaluate.

On the other hand, there are many objectives of managers in finance and accounting fields such as:-

1. Maximizing Profits: which is the financial management's main objective. The manager attempts to gain maximum profits for the firm in the long-term and short-term. Although, he long-term profits cannot be guaranteed due to business uncertainties, a firm can gain maximum profits even in the long-term, if:-

A. Proper financial decisions are taken.

B. The finance of the firm is properly used.

2. Maximizing wealth: or maximizing shareholders' value is one of the financial management's main objectives, which means to gain maximum profits to maximize the shareholders wealth. This can happen by giving the shareholders a maximum dividend, or by increasing the shares' market value, which is directly related to the firm performance. When the performance increased, the shares' market value become higher and vice versa.

3. Estimating total financial requirements properly: This is an important financial management objective. He should estimate the firm's total financial requirements and the finance required to run and start the firm. He should find out the working capital and fixed capital required for the firm. Although, it is a hard job, but it must be correct in order to avoid any surplus or shortage of finance....