04 Jan Be Prepared for Long Term Success
Working as a Finance Manager can be a challenge. Being prepared to answer tough questions will help you maintain productivity and cope with the unexpected. Too many businesses fail because of mismanagement due to lack of preparation. Find out how others succeeded and what they learned along the way.
The ability to answer tough questions builds confidence in your staff and they will respect you as a leader. An in-depth understanding of financial management terms and principles helps to build the groundwork for success by facilitating workplace communication. Every finance company human resources department should make this training part of their new-hire program. Here are some basic questions that an effective finance manager should be able to answer in order to communicate to staff in an informed manner.
Does trend analysis help when studying ratios?
Trend analysis shows the difference in a particular ratio over a certain amount of time. It also shows changes in product use and profit margin, which is helpful information when developing budgets and new products.
What is a fixed-charge coverage ratio and how is it used?
Fixed-charge coverage measures the ability to meet fixed obligations like lease payments, insurance, and dividends. A high fixed charge coverage ratio denotes a financially sound organization.
How does disinflation increase financial resources?
Disinflation results in lower prices which reduces the need to secure resources. The focus can then shift to building finances.
How are purchase and collection schedules connected to corporate finance?
The collections and purchase schedules record how efficiently purchases are paid and receivables collected. If collections do not cover purchasing costs, the company may have to find alternative resources.