The CFO Handbook

About the Book: CFO Handbook

As we all know, the world is going through difficult times owing to the onset and continuance of the pandemic and its deep-rooted impact on the global economy. This has thrown business organizations into a tailspin scarcely seen before.

In these times of massive disruptions, conventional businesses are struggling to keep their heads above water. At the same time, new windows of opportunities are opening up through the emergence of inorganic growth through mergers and acquisitions, where organizations with deep pockets are planning to take over comparatively weaker organizations to bring about more synergies and usher in consolidation and growth for the foreseeable future. New avenues of opportunities are also emerging through start-ups that are trying to take advantage of the changed scenario.

The leadership of most business organizations is now required to go back to the drawing board and come up with new strategies and road maps to mitigate the new challenges and opportunities for survival.

Since the Finance function is a mirror reflection of the business, these new challenges and opportunities have reached the corner room as well as the desk of the Chief Financial Officer.

The CFO in his conventional role has to enhance and optimize the shareholder value of the organization. In doing this, he has to strengthen the balance sheet of the organization by managing liquidity and possible cash crunch owing to disruptions in the value chain; effectively managing funds in a way that the risk of default on repayment of debt is mitigated, managing the capital structure of the organization to ensure that shareholder value and liquidity are not eroded owing to prevailing challenges, manage risks to ensure that the organization remains sustainable as a going concern.

At the same time, he is accountable to the Chairman, Audit Committee, and the Board in effectively handling corporate governance which spans overseeing technology, legal, tax, and compliance functions.

With respect to the inorganic growth of the business, the CFO plays a pivotal role in facilitating the process of merger and acquisition including driving financial due diligence, and enterprise valuation exercises both on the buy side and the sell side as required.

As a CFO of a start-up organization, he has to participate in the creation of strategy and business plans, handle road shows with prospective investors and be the focal point of fund-raising strategy and balance the firm’s priorities between investing in growth, building market share and conserving capital for future opportunities.

In overall parlance, the CFO with his crack finance team has to play the role of a lighthouse in anticipating the storms and choppy waters at sea and guide the ship to maneuver the roadblocks along the way and reach its destination safely.

The ever-increasing demand from the business pushes the CFO to reinvent himself and his team to face the challenges mentioned above. At the same time, the CFO has to drive continuous innovation within himself and the organization to encounter a tectonic shift in the way of doing business in the digital space.

Having played the role of a CFO in multiple avatars both in very large and mature organizations as well as start-ups in India and abroad, I had the opportunity to live through and experience this radical transformation of the role during the last three decades. This journey has been challenging on the one hand and exciting on the other and has inspired me to come up with this body of work, where most of the case studies have been picked up from my limited personal experience and research over this long period.

Key Features:

Accordingly, the book has been structured in three sections as explained below.

Section A discusses the critical success factors that are required for a CFO to be successful in ensuring the finance function effectively supports the business.

The Chapters are summarized as follows:

• Function as the lighthouse function – guide the business from its pivotal position.
• Partner with the business to come up with a robust strategy for the organization.
• Develop a best-in-class finance structure to provide value-added support to businesses.
• Facilitate setting up of Enterprise system support and digital transformation across operations.
• Build on state-of-the-art Financial systems and processes on a digital platform to usher in a controlled environment and bring about efficiency and effectiveness in providing enterprise support to the business.

Section B highlights the bread-and-butter functions without which a CFO cannot function.

The chapters are summarized as under:

• Financial reporting and its implications on the business,
• Financial statement analysis – to interpret and decode the Balance Sheet of the business, maintain the health and hygiene of the business, highlight possible risks and look for solutions,
• Financial modeling for effective business decisions,
• Enterprise Risk Management and Financial control to implement a control environment and manage risks as the Chief Risk Officer of the organization,
• Corporate Governance and compliance, wherein the CFO plays a pivotal role in handling legal, regulatory, and compliance-related issues, and provide comfort to the Audit Committee and the Board of directors.

Section C addresses how a CFO would launch himself and his team in managing inorganic growth and driving change management.

The chapters are summarized as under:

• Facilitate corporate restructuring initiatives,
• Drive Financial Due Diligence for initiatives related to acquisitions,
• Manage enterprise valuation both from the buy as well as the sell side,
• Manage start-ups by assisting businesses in developing a robust strategies and business plans and drive investor roadshows and fund-raising initiatives
• CFO and the future

Each Chapter has been filled with illustrations and case studies for a better understanding of the readers.

I believe the book will be useful to the CFOs, Financial Controllers, and also for the aspiring CFOs who may nurture a dream of becoming a CFO one day and they would like to use this book as a working guide in effectively handling the challenges and opportunities that may arise in their journey in successfully managing this role.

Pages: 874 pages

Author: B D Chatterjee

Published on (Date): 30 September 2021

Publisher: Bloomsbury Professional India

ISBN-10 ‏ : ‎ 9354353053

ISBN-13  :  978-9354353055

Format: Paperback

Keywords/Tags/Book Categories: ‘Financial Accounting’, ‘Law’, ‘Analysis & Strategy’

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