Which three main subjects is the financial manager primarily concerned with in the context of financial accounting?

• A. Inventory management, payroll processing, and internal controls
• B. Financial reporting, managerial accounting, and forensic accounting
• C. Tax planning, auditing, and cost allocation
• D. Capital budgeting, capital structure, and working capital management

Answer: (D)

Verified step by step guidance

1. Understand the role of a financial manager in the context of financial accounting. A financial manager is primarily concerned with making decisions that impact the financial health and operations of a business.
2. Identify the three main areas of focus for a financial manager: capital budgeting, capital structure, and working capital management. These areas are critical for ensuring the efficient allocation and management of financial resources.
3. Capital budgeting involves evaluating and selecting long-term investment opportunities. This includes analyzing potential projects or investments to determine their profitability and alignment with the company's strategic goals.
4. Capital structure refers to the mix of debt and equity financing used by a company to fund its operations and growth. The financial manager must decide on the optimal balance between debt and equity to minimize the cost of capital while maintaining financial stability.
5. Working capital management focuses on managing the company's short-term assets and liabilities to ensure sufficient liquidity for day-to-day operations. This includes managing cash, accounts receivable, accounts payable, and inventory efficiently.