Finance Today
Finance in any business is necessary. Whether it be a multibillion dollar corporation or a new start-up, all businesses need to have their finances in order. Finance is what allows marketing and all other business components drive growth. It is the finance department that approves and helps plan future expenditures of money. It is also their responsibility to obtain funding when needed, and to decide if a venture is profitable. Finance is what keeps businesses from making decisions that will lose them money or hinder their progress. In todays market, competition is fierce and businesses cannot afford to make costly or bad decisions. It is also important to be able to plan for the future and decide the directions that should be taken.
Careers in Finance
1. Investment Banker
2. CFO (Chief Financial Officer)
3. Financial/Business Analyst
4. Real Estate
5. Financial Planner
6. Underwriting
7. Stock Broker
8. Insurance Sales
2. CFO (Chief Financial Officer)
3. Financial/Business Analyst
4. Real Estate
5. Financial Planner
6. Underwriting
7. Stock Broker
8. Insurance Sales
Finance Mentor: Joel Weist - Senior VP of Finance Toys 'R' Us
Q: What are the major roles of finance in business today?
A: Getting money necessary and ensuring its liquidity. Underfunding is common in finance. Sometimes doors open to get money and you should ask for more than you need since you don't always know when you will have access again. You need to see the "Big Picture".
Budgeting, financial planning, forecasts, and expense planning are focuses in finance, along with understanding whats going on and how to make things better.
Q: What do you focus on mostly in your job?
A: I am in charge of Operational Accounting, Insurance/Risk Management and Compensations. There are about 80 people who report to me in Planning, 120 in Operations Accounting and 15 or so in Risk Management.
Q: What do you perceive as needed or necessary for one entering the Finance industry or discipline?
A: Sound understanding of Accounting and its uses for analysis. Understanding international currency. An MBA is needed and a CPA is good. Knowing business law and how to work around and with the rules set by the government. Be grounded in some areas very well. Statistical analysis is also important. I also suggest Networking in and out of class.
Q: What do you enjoy most about your job?
A: The people I work with. Some of which I have worked with for 30 years at multiple companies. I trust and respect them. The type of product and business that we run brings joy to others which is satisfying.
Q: What do you like least about your job?
A: Stress, deadlines and homework. It doesn't end after school. Also, being asked to do something you have no clue about.
A: Getting money necessary and ensuring its liquidity. Underfunding is common in finance. Sometimes doors open to get money and you should ask for more than you need since you don't always know when you will have access again. You need to see the "Big Picture".
Budgeting, financial planning, forecasts, and expense planning are focuses in finance, along with understanding whats going on and how to make things better.
Q: What do you focus on mostly in your job?
A: I am in charge of Operational Accounting, Insurance/Risk Management and Compensations. There are about 80 people who report to me in Planning, 120 in Operations Accounting and 15 or so in Risk Management.
Q: What do you perceive as needed or necessary for one entering the Finance industry or discipline?
A: Sound understanding of Accounting and its uses for analysis. Understanding international currency. An MBA is needed and a CPA is good. Knowing business law and how to work around and with the rules set by the government. Be grounded in some areas very well. Statistical analysis is also important. I also suggest Networking in and out of class.
Q: What do you enjoy most about your job?
A: The people I work with. Some of which I have worked with for 30 years at multiple companies. I trust and respect them. The type of product and business that we run brings joy to others which is satisfying.
Q: What do you like least about your job?
A: Stress, deadlines and homework. It doesn't end after school. Also, being asked to do something you have no clue about.
Key Finance Terms
ROI: "Return on Investment" A measure of profitability to a firm to see if they are using their resources efficiently or not. (does not take into account the time value of money)
Net Present Value: Difference between the present value of the future cash flows from an investment and the amount of the investment.
Stocks: Equity Capital to a firm that is raised by sale of shares or "stock" in the company. The value of stocks is not constant, there is different risk and return on every stock. Traded in stock exchanges.
Bonds: An official "promise to pay" by one entity to the buyer by a certain date. A purchase of debt by an investor from an entity with a more stable or safe return than in stocks.
Stockholders: Owners of stock or shares of a company. A stockholder can be an individual, group or company.
Government Securities: Bonds, notes, or other contracts sold by the government to fund borrowing/spending. Normally long-term and of high rating.Mutual Fund: A pool or portfolio of investments (all kinds) that are sold in together in shares. The value depends on the overall value of each investment that makes up the mutual fund. Normally set up through a firm of investment and finance specialists.
SEC: US federal agency that helps protect investors by enforcing securities-related laws, and by setting mandatory standards for disclosure of financial and other important information about firms whose securities are traded over a stock exchange.
Stock Markets: Also know as stock exchanges, are organized and regulated markets where shares of stock, bonds and other investments (securities) are traded. Prices are driven by supply and demand.
Intial Public Offering (IPO): The first sale of stock (shares) in a company to the public.
Venture Capital: The money or equity with which a company uses to start or grow its business. Can be obtained by private parties, banks or other investing firms.
Interest Rate: Annual cost of credit or debt on an investment or loan which is a percentage in relation to the principal amount.
Dow Jones Industrial Average: Oldest and most widely quoted to measure the overall market value of stocks(on average).
Net Present Value: Difference between the present value of the future cash flows from an investment and the amount of the investment.
Stocks: Equity Capital to a firm that is raised by sale of shares or "stock" in the company. The value of stocks is not constant, there is different risk and return on every stock. Traded in stock exchanges.
Bonds: An official "promise to pay" by one entity to the buyer by a certain date. A purchase of debt by an investor from an entity with a more stable or safe return than in stocks.
Stockholders: Owners of stock or shares of a company. A stockholder can be an individual, group or company.
Government Securities: Bonds, notes, or other contracts sold by the government to fund borrowing/spending. Normally long-term and of high rating.Mutual Fund: A pool or portfolio of investments (all kinds) that are sold in together in shares. The value depends on the overall value of each investment that makes up the mutual fund. Normally set up through a firm of investment and finance specialists.
SEC: US federal agency that helps protect investors by enforcing securities-related laws, and by setting mandatory standards for disclosure of financial and other important information about firms whose securities are traded over a stock exchange.
Stock Markets: Also know as stock exchanges, are organized and regulated markets where shares of stock, bonds and other investments (securities) are traded. Prices are driven by supply and demand.
Intial Public Offering (IPO): The first sale of stock (shares) in a company to the public.
Venture Capital: The money or equity with which a company uses to start or grow its business. Can be obtained by private parties, banks or other investing firms.
Interest Rate: Annual cost of credit or debt on an investment or loan which is a percentage in relation to the principal amount.
Dow Jones Industrial Average: Oldest and most widely quoted to measure the overall market value of stocks(on average).
References
www.businessdictionary.com
www.investorwords.com
www.investorwords.com