What Is the Goal of a Financial Manager Within a Corporation?

by Sharon Penn; Updated September 26, 2017

Financial managers develop strategies that will implement the long-term goals of a corporation. Their duties include preparing financial reports, directing investment activities and implementing cash management activities. The main goal of financial managers is to maximize the value of stock shares. Financial managers may have different responsibilities and focus on different goals according to their title.

Goals of Finance Managers

Financial managers in a corporation consider a wide range of financial goals with the overall goal of increasing the value of stock shares. According to the textbook "Introduction to Corporate Finance," financial mangers take steps to ensure the survival of the company by avoiding financial distress and bankruptcy. To achieve this goal, they may implement procedures to minimize costs, maximize profits and maintain a steady earnings growth. Financial managers are aware of the activity of the competition and make sure the company is aggressive in the marketplace. They manage exposure to risk and advise key managers about financial matters.

Maximizing Profits

According to "Introduction to Corporate Finance," an important goal of financial managers is to maximize profits. To achieve this goal, managers must define their objectives clearly. There may be a difference between maximizing profits for only this year and maximizing profits for the long term. For example, maximizing profits for the year may simply be a matter of implementing short-term solutions, such as letting inventory run down. This type of solution may work for the short term but is not necessarily a cost-cutting measure that is desirable for long-term profits.

Analyzing Data

According to the Bureau of Labor Statistics, financial managers act as liaisons to top management to advise them of profit-maximizing ideas. These suggestions are backed up by financial data. Often, the financial manager works on a team to produce financial reports and analyze data. Because of technological advances, these reports have become much easier to produce.

Managing Risk

According to the Bureau of Labor Statistics, financial managers oversee programs that minimize risk for a corporation. They monitor situations that arise from financial transactions as well as business operations that might result in losses to the company. Financial managers specializing in insurance limit the company’s potential losses by obtaining insurance. An example of the type of insurance a company might get to avoid risk is disability for employees who get hurt on the job. Risk managers might control financial risk through the use of hedging. This limits the company’s risk related to future currency and commodity pricing changes.

About the Author

Sharon Penn is a writer based in South Florida. A professional writer since 1981, she has created numerous materials for a Princeton advertising agency. Her articles have appeared in "Golf Journal" and on industry blogs. Penn has traveled extensively, is an avid golfer and is eager to share her interests with her readers. She holds a Master of Science in Education.