1. What is finance?
Finance is the study of how individuals, institutions, governments, and businesses acquire, spend, and manage money and other financial assets. Some say that is the art and science of managing money.
2. What are the disciplines related to finance?
Finance is both related to economics and accounting.
Economists use a supply-and-demand framework to explain how the prices and quantities of goods and services are determined in a free-market economic system. Accountants supply the record-keeping mechanism for showing ownership of the investments used in the flow of funds among savers and borrowers. Accountants also record revenues, expenses, and profitability of organizations that produce and exchange goods and services. It is very vital that financial manager is knowledgeable in Accounting and Economics. The objective of the financial manager in a profit-seeking organization is to maximize the owners’ wealth. This is accomplished through effective financial planning and analysis, asset management, and the acquisition of financial capital. Financial managers in not-for-profit organizations aim to provide a desired level of services at acceptable costs and perform the same financial management functions as their for-profit- counterparts.
3. Why we study finance?
a. To make informed economic decisions.
b. To make informed personal and business investment decisions. c. To make informed career decisions based on a basic understanding of business finance.
4. What are the careers in finance?
a. Financial management
Larger business typically divide their finance activities into treasury and control functions, whereas smaller firms combine these functions. The treasurer is responsible for managing the firm’s cash, acquiring and managing the firm’s assets, and selling stocks and bonds to raise financial capital necessary to conduct business. Other functions of a treasurer are as follows:
Determination of employee’s benefits
Credit and collections
Banking and foreign exchange problems
Determination of financial requirement and procurement of funds The controller is responsible for cost accounting, financial accounting and tax record-keeping activities. Other functions of a controller are as follows:
Protection of assets
Government reporting and tax administration
Evaluation of company objectives and policies
Interpretation of results of operations
From the following information, we can conclude now that the treasurer takes care of the external finance functions while the controller takes care of the internal ones.
Entry level career opportunities include in financial management are as follows : Financial analyst: involves evaluating financial performance and preparing financial plans Cost analyst : involves comparing actual against budgeted operations Credit analyst : involves evaluating credit applications and collecting amounts owed by customers Tax analyst: involves preparing financial statements for tax purposes Cash management analyst : involves managing the firm’s day-to-day cash flows
b. Depository financial institutions
Banks offer the opportunity to start a finance career in consumer lending. Banks also manage funds for individuals and organizations.
Entry level career opportunities include in financial management are as follows : Loan analyst : involves evaluating consumer loan applications Bank teller : involves assisting customers with their day-to-day banking transactions Investments research analyst : involves conducting research on investment opportunities for a bank trust department
c. Contractual savings and real property organizations
Insurance companies, pension funds, and real estate firms also provide opportunities for starting a career in finance. These institutions need a variety of employees willing to blend marketing or selling efforts with financial...
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