A chief financial officer (CFO) is the senior executive responsible for managing the financial actions of a company. The CFO’s duties include tracking cash flow and financial planning as well as analyzing the company’s financial strengths and weaknesses and proposing corrective actions.
The roles and responsibilities of a CFO are similar to a treasurer or controller because they are responsible for managing the finance and accounting divisions and for ensuring that the company’s financial reports are accurate and completed in a timely manner.
The chief financial officer of a company is the top-level financial controller, handling everything relating to cash flow and financial planning. The meaning of CFO is simply the initials that stand for the title chief financial officer. Although the role of a CFO can be rewarding, there are legal considerations that must be strictly adhered to. CFO's oversee taxation issues for their companies. Often, CFO is the third-highest position in a company, playing a vital role in the company’s strategic initiatives.
The CFO reports to the chief executive officer (CEO) but has significant input in the company’s investments, capital structure, and how the company manages its income and expenses. The CFO works with other senior managers and plays a key role in a company’s overall success, especially in the long run. For example, when the marketing department wants to launch a new campaign, the CFO may help to ensure the campaign is feasible or give input on the funds available for the campaign.
The CFO may assist the CEO with forecasting, cost-benefit analysis, and obtaining funding for various initiatives. In the financial industry, CFO is the highest-ranking position, and in other industries, it is usually the third-highest position in a company. A CFO can become a CEO, chief operating officer, or president of a company.
A CEO’s role varies from one company to another depending on the company’s size, culture, and corporate structure. In large corporations, CEOs typically deal only with very high-level strategic decisions and those that direct the company’s overall growth. In smaller companies, CEOs often are more hands-on and involved with day-to-day functions. CEOs can set the tone, vision, and sometimes the culture of their organizations.
Because of their frequent dealings with the public, sometimes the chief executive officers of large corporations become famous. Mark Zuckerberg, the CEO of Facebook (FB), for example, is a household name today. Similarly, Steve Jobs, founder and CEO of Apple (AAPL), became such a global icon that following his death in 2011, an explosion of documentary films about him emerged.
A CFO is responsible for a company’s past and present financial situation, and he or she is an integral part of a company’s financial future. A CFO has multiple duties, from financial reportage to deciding where and when to invest company funds. A CFO oversees the capital structure of the company, determining the best mix of debt, equity, and internal financing. Addressing the issues surrounding capital structure is one of the most important duties of a CFO.
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