Financial Jargon - The Strategic CFO® (2024)

FAQs

What is the strategic role of the CFO? ›

The CFO helps with shaping portfolio strategies, undertaking major investment and financing decisions, and communicating with key stakeholders—all while leading a multitalented and technologically savvy finance team. Communication is a key part of the role, both with investors and boards.

Bankers are the individuals who have invaded earth from another planet. They come from the planet known as Financial World. They look and act exactly like the rest of us that inhabit earth with one exception, their language. The language they speak is known as Financial Jargon.

Investment Decisions:

Corporate strategy identifies investment opportunities and growth areas. Financial strategy evaluates these opportunities, considering the financial feasibility, expected returns, and risk profiles, to make informed investment decisions.

The CFO uses reporting and forecasting tools to make strategic, data-backed decisions. A good CFO will be able to provide level-headed insights based on a thorough understanding and analysis of the data.

There are four pillars: Accounting, Finance, Treasury, and Leadership.

Jargon is occupation-specific language used by people in a given profession, the “shorthand” that people in the same profession use to communicate with each other. For example, plumbers might use terms such as elbow, ABS, sweating the pipes, reducer, flapper, snake, and rough-in.

1. : the technical terminology or characteristic idiom of a special activity, group, profession, or field of study. medical jargon. 2. : unintelligible, meaningless, or incoherent speech (as that associated with Wernicke's aphasia or some forms of schizophrenia)

Technical jargon is the specialized language used by experts in a field, such as acronyms, abbreviations, and terms that are not familiar to most people.

Strategic Plans are “roadmaps” oriented to specific actions required to take the business in a certain competitive direction, evaluating a number of scenarios and choosing a path to take while applying a scorecard to track progress and success.

An effective CFO should possess a broad range of qualities, including strong analytical skills, technical financial expertise, superior communication skills and the capacity to think strategically.

What is the goal of strategic finance? ›

The goal of strategic finance is to create value for the organization. This means looking at the big picture and making decisions that will positively impact the business. A finance strategy ensures that an organization has enough money to meet its current and future needs.

Strategic finance includes identifying and evaluating potential financial risks that could impact the performance of a business. This can include risks such as changes in market conditions, regulatory environments, or the supply chain.

Strategic finance is an approach to FP&A that focuses on how the finance team can become a vital partner to the business and drive success. Strategic financial planning and analysis views the process as an opportunity to: Unite the business in the planning process.

Ensuring the proper execution of strategic planning processes. The profitability of the company through its ability to maximize profits. The solvency of the company based on its ability to repay its loans and debts. Good management of the company's cash flow.

This executive is in charge of a company's financial operations. A CFO's responsibilities include internal and external financial reporting, stewardship of a company's assets, and ownership of cash management. Increasingly, the role is more forward-looking and expanding to incorporate strategy and business partnership.

The CFO is the top-ranking executive related to managing a company's finances. This includes managing all aspects of financial and cash flow planning, as well as analyzing its financial position. A CFO is comparable to a treasurer or controller.