Post-MBA Careers: Corporate finance (aka industry finance)
Sections in this article
Corporate finance ↑ Top ↑
Corporate Finance is a branch of finance which deals with the financial decisions that corporations make in order to maximize corporate value and minimize corporate risks.
A corporate finance manager is involved in both short and long term decisions. Long Term corporate finance decisions are related to capital investment and fixed assets while in the short term, they are related to working capital and cash-flow management.
The basic functions of corporate finance are:
- Raising Capital to finance corporate projects
- Budgeting and financial planning for implementation of the projects
- Interfacing with the financial community and investors
- Risk Management
Working in corporate finance ↑ Top ↑
Careers in corporate finance are considered to be stable compared to other careers in finance like investment banking, sales and trading etc. There are no rigid targets to be met; instead careful and systematic planning of the company's finances is a requirement. Work in generally in teams and the pay is also good. Corporate Finance jobs are thus the most sought after jobs because of the security, yet the challenging opportunities that they offer.
Fresh MBA graduates start in Corporate Finance as Management Trainees. Thereafter, the corporate ladder includes positions of Assistant Manager, Manager, Finance Head or Chief Financial Officer. Though these are the levels of hierarchy, within corporate finance, a person may have different job roles like:
- Treasurer: This is a senior management job which involves management of the Treasury department, which is involved in raising funds, cash management and asset management.
- Financial Analyst: This role involves financial planning, budgeting and implementing financial plans.
- Credit Manager: Credit managers determine the maximum amount of credit to offer and supervise past due-account collections. They formulate criteria for rating risk and credit.
- Cash Manager: A cash manager establishes relationships with banks, manages short-term credit and ensures availability of cash to meet daily needs.
- Financial Controller: This is again a senior management role. A financial controller in involved in decisions related to the company's property, revenue, benefits, lease and financial strategy. He thus controls the company's finance by developing models that project revenue and costs.
Key skills requirement ↑ Top ↑
As the name would suggest, corporate finance jobs are quant-intensive. Knowledge of accounting is very important as the work also involves preparation of P&L statements.
- Strong Analytical Skills: As you have to solve a lot of issues related to finance, cost, revenue and risk, you need to be good at your analytics
- Comfortable with Spreadsheets: Though various accounting software applications are available to ease your life, a good working knowledge of spreadsheets helps a great deal.
- Communication and Interpersonal Skills: A corporate finance manager has to maintain relations with various investors, property dealers and bank managers. Besides this he is also responsible for issuing press releases to explain corporate events. Thus good communication and interpersonal skills are a prerequisite.
- Have a long term point of view: The positive results of most corporate finance decisions are seen in the long term. At the initial stage, work in corporate finance may not be as stimulating as other finance jobs. However, a person who is patient and invests in himself wins at the end of the day.