Chief Financial Officer (CFO)
The position of the chief financial officer is one of the top ranking positions for the financial operations in the company and the CFO of the company is the person who manages and deals with the financial risks of the company. To put it simply, the job of the CFO is to manage the finances of the company.
Duties of chief financial officer (CFO)
The duties of the CFO are the most far-reached in the completely organizational structure since the person in this position has to manage the finances of the company and increase the cash flows of the company in a general sense. Some people think that the duty of a CFO is only to report the financial position of the company. However, this is just a general misconception. In reality, the reporting of financial position of the company is just a tiny aspect of the duties of the CFO.
Apart from financial reporting to the board of directors (BOD), it is the duty of the CFO to manage the finances of the company and the risks attached with them. Apart from the record keeping, it is also the duty of the officer to plan the finances of the company so that company does not face liquidity problems when the cash is needed for the investments projects. All the appraisals and the determination of the profitability and viability of the projects is also the duty of this officer.
A CFO is usually known as a finance director in some of the regions of the world but usually he or she is not formally a part of the board of directors (BOD). However, CFO usually attends the meeting of the board of directors (BOD) when the need arises. The CFO of the company is usually reportable to the chief executive director (CEO) and the board of directors (BOD). The CFO of the company can be categorized as an executive director of the company.
Qualifications of the CFO
The CFO of the company is usually an MBA in business finance or has an accounting background. Since the role of the CFO involves the managing of the finances, CFO is required to have the knowledge of the business finance.
- Debt ratios
- Liquidity ratios
- Profitability ratios
- Asset management ratios
- Cash Flow Indicator Ratios
- Market value ratios
- Financial analysis
- Business Terms
- Financial education
- International Financial Reporting Standards (EU)
- IFRS Interpretations (EU)
- Financial software