FINANCIAL COMMUNICATION

By: KUNAL SINGHAL & KRISHNENDRA DUBEY

Roadmap of Presentation• An Overview of Finance & its

Functional Areas…• What is Financial

Communication?• Public Relations.• Constituents of Financial

Communication.

An Overview of Finance & its Functional Areas…

Finance is considered as the lifeblood of an organization. All product development activities have to necessarily come through the finance department, which looks into the cost, pricing, and future revenue expectations of that idea before giving it a green signal.

It is, therefore, very important to communicate with the finance department and involve it at each stage by sharing all strategic information through a proper communication system.

What is Financial Communication?

Financial Communication is all about providing financial data pertaining to the company’s performance to the investor community at large.

It involves conveying all financially sensitive information and data of the last year including the major capital expenditures undertaken, profitability performance, stock market performance, etc., to the stake holders.

Conti… Financial communication is a branch of public relation management and is used to build close relationships with investors, analysts, and the financial media.

Corporate financial communication forms part of the governance structure whereby corporate executives are made accountable for their decisions, and it is, therefore an important area of communication.

PUBLIC RELATIONPublic Relation is the practise of

managing the flow of information between an organization and its publics.

It is the planned and sustained effort to establish and maintain goodwill and mutual understanding between and organization and its publics.

Constituents of Financial Communication.

Transparent financial communication has come to be recognized as a key element for professional organizations. Financial communication is more or less structured, both, in terms of timing as well as the content.

Financial communication helps to know…

The company at a glanceThe chairman’s messageThe outlookShare price informationBalance sheets, income statements, and other price-sensitive financial dataInvestor relation releasesThe financial calendarThe stockholder structureCorporate governance

Company at a glance.

This talks about the board of directors (including the chairman)- their tenure, their compensation, and other dealings. It also details a company’s memorandum and article of association.

Chairman’s message.

Through this the chairman addresses the shareholders directly and gives a brief snapshot of the company’s performance in the last financial year including the sales, profits, and other details.

Outlook.This report contains forward-looking statements that reflect the management’s current views with respect to future events.

Share price information.

This provides all the stock market data related to the company’s stock, including price and volume date, short and long positions, daily close and open positions and other technical analysis data.

Balance sheets, Income statement, & other price sensitive data.

This is the backbone of all financial communication, whereby the company puts in the total financial statements for the investor including income statement and the balance sheet in a standard format.

Investor relation releases.In some countries, the law requires an issuer of a publicly listed stock to release important news about the company, which is not in public knowledge --- the news might have a substantial influence on the share price.

The financial calendar

The financial calendar is the whole year planner for the company, wherein the company tries to share some important future events, with regard to financial communication, with the stake holders. This is an exercise primarily undertaken to reflect a company’s professional approach and open attitude towards the disclosure of financial data.

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