Chief financial officer

Definition

The Chief Financial Officer (CFO) is a senior executive responsible for managing the financial actions of a company. This includes tracking cash flow, financial planning, and analyzing the company's financial strengths and weaknesses.

5 Must Know Facts For Your Next Test

1. The CFO plays a crucial role in strategic planning by providing financial insights to guide business decisions.
2. CFOs oversee the finance department, which includes accounting, budgeting, and tax functions.
3. They are often involved in investor relations and communicating with shareholders about the company's financial health.
4. Risk management is a key responsibility of CFOs; they must identify and mitigate financial risks to ensure organizational stability.
5. A CFO typically reports directly to the CEO and may also be part of the board of directors.

Review Questions

• What are the primary responsibilities of a Chief Financial Officer?
• How does the CFO contribute to strategic planning within an organization?
• In what ways does a CFO manage financial risks for a company?

Related terms

Controller: Responsible for overseeing all accounting-related activities within an organization.

Treasurer: Manages the organization's liquidity, investments, and risk related to its financial activities.

Chief Executive Officer (CEO): The highest-ranking executive in a company who makes major corporate decisions and manages overall operations.