Managing finance is an integral part of any business. Every major financial decision taken by a corporation involves some smart people who do all the background checks through financial planning and strategic implementation. They are the people who can make or break a company.
In a business, every decision made comes with financial implications, and any such decision involving the use of money becomes a corporate financial decision. In more specific words, Corporate Financing involves planning, developing and managing the capital structure of a corporation.
So, we can safely say that finance is one of the most important verticals of any business. Read along if you’re willing to start your career in corporate finance, as we’re going to elaborate on all aspects of corporate finance and will introduce you to the best platform to get certification in corporate finance.
What is Corporate Finance?
A subfield of finance, Corporate Finance addresses how corporations deal with funding sources, accounting, investment plans, capital structuring, and taxation. It deals with the day-to-day financial operations and cash flows of a business, along with focusing on long-term financial targets.
The primary responsibility of a finance manager is the effective allocation and use of funds. It’s his responsibility to procure funds from the market at a reduced cost and risk. His other functions include planning, forecasting and budgeting of said funds, designing investment strategies, and doing financial negotiations.
How to Get into Corporate Finance
Are you interested in establishing a career in Corporate Finance but don’t know how? The demand for finance professionals is quite high across all industries. If you dream of building a career in corporate finance, then you must be prepared to take challenges and develop an analytical mind. It is an exciting job role with a lot of accountability and responsibility as you are involved in charge of the company’s financial decisions.
A graduate from any academic background can establish a career in Corporate Finance. However, having in-depth knowledge in Accountancy and Business Finance is necessary for professional growth. For impressive jobs in corporate finance, a Master’s degree in financial mathematics, an MBA or a CFA will come in handy.
Courses to Pursue
A Corporate Finance professional is expected to be a pro in financial modeling, accounting, negotiation skills, and presentation skills. You may pursue these popular courses to have the requisite knowledge as well as credibility:
When it comes to offering professional courses, IMS Proschool is a name you can truly trust. IMS Proschool Certification Courses can benefit both working professionals and freshers as they are self-paced and insightful.
IMS Proschool has:
- 25,000+ students
- 100+ expert tutors
- 10,000+ professionals trained
- 10+ offline coaching centers in India
Prepare yourself for various financial certification exams with IMS Proschool. We offer necessary certifications in association with ACCA, CFA, FPSB, AIMA, NSDC etc. and our students are placed in top companies like Deloitte, JP Morgan, Pepsico, ADP and several others.
Three most common ways of getting into corporate finance are:
- Studying for ACCA and joining an accounting firm as an intern
- Joining an accountancy firm’s corporate finance team
- Joining an investment bank or an advisory firm as a finance analyst
Relevant Credentials to Get an Extra Edge
According to CEOs of leading global businesses, fresh perspective, strategic thinking and candor are the basic qualities they seek in any finance professional. The skills required for a thriving career in corporate finance include:
- Leadership skills
- Problem-solving quality
- Persuasion ability and communication skills
- Team management
- Intrapersonal and interpersonal skills
- Research-based thinking
- Commercial awareness
- Networking ability
- Knowledge of Financial modeling
- Comfortable working in ambiguous situations and constantly changing environments
IMS Proschool assists its students in creating impressive resumes and offers placement assistance.
Key Elements of Corporate Finance
The primary focus areas of Corporate Finance include capital structure, capital budgeting, dividend decisions, and working capital.
Capital Budgeting- Capital Budgeting reveals the investment proposals’ viability and helps in making investments in profitable projects. Financial analysts consider multiple investment alternatives as part of capital budgeting. Based on a comparative analysis of the existing and future value of investments, they make an estimate of the risk-return aspects regarding organizational goals. The most promising projects always get the preference.
Capital Structure- The capital structure gives us an overview of the financing method used by the company. It includes retained earnings, equity, and debts. From the perspective of investors, excessive equity or debt is unappealing. What they want is a balanced combination of equity funding and debt. Consequently, proper planning of finances produces a combination of different kinds of funding which enhances the value of the company.
Working Capital Requirements- Working Capital is the money allocated for carrying out daily business operations. Proper financial management makes sure that the cash flow is adequate and in line with the company’s business policies. This is how corporations maintain liquidity, strengthen their position and save themselves from going bankrupt.
Dividend Distribution Strategy- Public companies are answerable to their shareholders. So, they often have to figure out how much of the profit should be distributed as dividends. For example, the decision to reinvest surplus should arise from a strong conviction of business growth. However, a certain portion of dividend distribution is also important for a business to keep the shareholders happy.
Career Opportunities in Corporate Finance
As corporate finance is an integral part of any business, the opportunities are endless. From an advisor in an accountancy firm to an investment banker – the options are many.
In Investment Banks
Investment banks are the most popular destination for most corporate finance professionals. They are the largest recruiter of finance managers across all industries. In investment banks, corporate financiers deal with managing and investing of large funds. They are also responsible for major financial decisions like acquisition and mergers.
In Publicly Traded Companies
Companies that are traded in the stock market often appoint a sizable team of accountants who look after all the financial matters. The team is often headed by the Chief Financial Officer (CFO). If you’re really capable in finance, who knows, you may end up being the CFO of a publicly traded company someday.
In Accounting Firms
Accounting firms require analysts and accounting managers who are responsible for handling the overall supervision and management of the accounting department. They develop the accounting policies of the company and oversee the monthly financial statements, financial forecasts, annual budgets, and regular financial reports.
We may conclude by saying that Corporate Finance is essential for a business to make efficient decisions for getting optimal financial returns. This explains why corporate finance careers attract young millennials.
If you are considering a career in Corporate Finance, IMS Proschool is the best platform to upskill yourself. With IMS Proschool’s courses and guidance, you’ll always stay ahead of the pack. Enroll today and give your knowledge an ultimate boost.
Frequently asked questions
What are the 4 areas of Corporate Finance?
The primary functional areas, within which corporate finance revolves, are Capital Budgeting, Capital Structure, Dividend Distribution and Working Capital Management.
What is the importance of Corporate Finance?
Corporate finance deals with all kinds of financial matters of a corporation. It sets the capital structure of a company and uses funds to generate good returns. Corporate finance aims to increase the value of a company.
How is Corporate Finance as a career?
A career in corporate finance can be both fulfilling and rewarding at the same time. There are different types of corporate finance jobs out there in the market including treasury management, financial planning, and corporate development. All of which offers excellent growth opportunities.
What is Corporate Finance strategy?
The strategy behind any corporate finance decision is to complement business goals and get the most value out of the company. From raising funds to allocating them, every financial decision is based on the corporate finance strategy.