Central Financial Management Activities Essay Example | Topics and Well Written Essays - 1250 words

Central Financial Management Activities - Essay Example It is not uncommon for an organization to employ its directors and/or its chairperson when it comes to judgment in the financial management process. Judgment must be borne on issues of strategy, performance, and resources, including key appointments and standards of conduct. Organizations may also employ non-executive directors for the judicial process, as an independent judgment that is free from bias is superior (Mcmenamin 1999). It is the task of the judgment personnel to evaluate what has taken place in relation to how the financial picture of an organization can be improved. The judges in the financial management process have the capacity to do away with certain decisions and thereby begin a new financial year with better prospects. Most Fortune 500-size firms use sophisticated mathematical and statistically-based methods in the financial management of inventory. A firm’s financial managers concentrate on the allocation and efficient management of financial resources in various inventory categories, for example, raw materials, work-in-progress, and finished goods. A firm’s production and inventory managers, on the other hand, are more interested in the efficient production of different finished goods items, and therefore pay close attention to employee production schedules, long production runs, and the storage of finished goods. It is not infrequent for a conflict of interest to arise between these two branches of management. The top management must intervene in this case to determine the proper investment of financial resources in the production function. Now a great deal of analysis enters the picture. For this, all firms must have data necessary to make precise calculations of cost-convenience -profit trade-offs (Grablowsky 1984).