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Corporate Finance
Introduction to Corporate Finance
Corporate Finance is the study of money related business decisions in the workforce. Despite its name, it applies to all business decisions and not just corporations. The main aim of Corporate Finance is to make good and viable decisions related to financing, investment and dividends.
In other words, it deals with how businesses should allocate fewer resources and maximize their revenues. Also, it deals with the various ways through which the company can acquire the resources, be it through owner capital, stocks and bonds as well as bank loans. It also entails how the company should use their profits.
It deals with the basic nuances of providing a framework, concepts, and tools for analyzing financial decisions based on fundamental principles of modern financial theory.
It is definitely one of the sought out courses for future managers in the corporate and business industry. Firstly, it endows the managers with the ability to identify and select strategies, and projects. Secondly, it also allows them to forecast funding requirements for their company, and creates the ability to plan strategies for acquiring funds.
They get to also assist their organizations in generating fund necessary to support and expand business operations, put together acquisitions, manage cash resources, and ensure future economic stability. In short, they get to hit the ground running, taking on responsibilities and problem solving their way to success.
Qualifications Needed For Career In Corporate Finance The qualifications needed for a career in Corporate Finance are important because the professionals need to work for large investment banks or corporate advisory firms. This career requires a Bachelor’s Degree in Finance or a related business field. Though, many employers look for job candidates with an MBA as well.
The academic skills are necessary for understanding the core of business, finance, and corporate negotiations. Typical work experience of more than 5 years is a must. The skilled needs to know how to mediates transactions and at the same time, protect the interests of the client, either the company doing the bidding or the target company.
As with most industries, finance also has its own unique set of professional qualifications and licenses. The qualifications also include professional designations such as the
Chartered Financial Analyst (CFA)
Certified Financial Planner (CFP)
Certified Public Accountant (CPA) designations as well as securities industry
Master in Business Administration (MBA) with concentration in Finance
Master of Science in Finance (MSF, MiF)
Adequate prior experience in Finance after a bachelor degree in commerce, science, or technology
Skills needed for a Career in Corporate Finance A typical job in corporate finance would call for the following skills:
The professional needs to know how to use a combination of intuition and analytics in solving problems.
Stamina to take challenges as they change on every day basis. So, it’s key to know how to work in a rapidly shifting environment.
Knowledge of spreadsheets, word processors, presentation packages and large-scale data management tools.
It is significant to communicate ideas, build deep networks and be passionate about their work.
Large corporations in the U.S., Europe and Asia are more globalized than ever and if a professional knows a foreign language, it endows him a competitive edge.
Familiarization with models, techniques and derivatives which can be used to manage risks
Career Hierarchy in Corporate Finance
Let’s start at the top.
The Chief Financial Officer is the head of the Corporate Finance Department of every firm.
The Financial Planning and Analysis Manager who heads the management accounting department. Three to four analysts are led by a senior analyst, who is in charge of a specific product.
The financial accounting department is headed by the Controller.
The Treasurer then handles the treasury department. It is responsible for all the company’s financing and investing activities. It works with investment bankers who help the corporation raise capital with stock or bond sales or expand through mergers and acquisitions.
Cash Management group deals with the daily requirements of the company’s cash intakes and expenditures.
Tax Department: It works with the attorneys on tax litigation, researching tax laws and reporting requirements by nation (if the company is international), and keeping up with new government rules and regulations.
Pros of working in Corporate Finance
Potential High Income: The professionals get to earn a potential six-figure income. The kind of exposure that this career endows is really remarkable. With the levels of work experience and knowledge, the salary further increases, this can be a real motivation for working.
Regular Business Hours, Good Working Conditions: The professionals in financial services industry employees work at desks in climate-controlled offices. There’s not much running around to do and the work is heavily research based in corporate finance.
Versatile work: The professionals get to experience working with different industries, be it engineering, manufacturing, financial services and oil industries. It adds to the work experience and knowledge of the individual.
Keen commercial awareness:
The professional gets to develop several aspects and learning in corporate finance, which adds to keen commercial awareness which cannot be learnt without practice.
Cons of working in Corporate Finance
High Stress: Most financial services industry positions are fast-paced and high-stress. Many companies have sales quotas for employees, and employees can feel a lot of stress related to making their quota or keeping their job.
Cyclical Industry: An iffy job security can be one of the downsides of working in the finance industry. Banks and brokerages tend to go on hiring sprees when the economy is booming and markets are rising and then end up laying off a significant percentage of their employees during economic down cycles.
Who Is a Career In Corporate Finance Good For A career in corporate finance is good for only those individuals who love working with numbers, are mathematically gifted and possess strong quantitative and analytical skills. They should be good at problem-solving, and you also possess strong attention to detail.
World’s top 10 Companies for a Career in Corporate Finance
Susquehanna International Group
Apple
Samsung Group
Google
Verizon
IBM
AT&T;
Wells Fargo
Shell
BMW
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