Corporate finance deals with financial decisions made by a company or business entity. Corporate financiers attempt to maximize the value of a corporation while minimizing its financial risks. This field of endeavor can be divided into short term and long term decisions. Short term decisions involve managing current debts and assets and on managing inventories. Long term decisions involve dealing with long-term investments, financing these investments with equity and when to pay dividends to shareholders.
Corporate financiers guide businesses in their investment decisions and analyze the performance of commodities, stocks and bonds. They also study a companies financial statement and make projections on the value of the company. Corporate financiers do this by studying sales, costs, tax rates and by making estimates of its future earnings. They often must meet with company officials in order to make important decisions and get better insight into the companies management and prospects.
The field of corporate finance covers a number of different disciplines which include accountants and auditors, actuaries, budget analyst, financial managers, corporate financial managers and financial services sales agents. It also include securities and commodities sales agents.
Corporate financiers have a large earning potential that is more than double the national median salary. The bottom ten percent of corporate financiers make about $43,440 per year, the middle fifty percent make between $54,930 $99,700 per year and the top ten percent make over $141,170 per year. This puts the median salary at about $73,150 per year. This base yearly salary can be increased dramatically through performance bonuses and other incentives offered by the company.*
*According to the BLS, http://www.bls.gov/oco/
Performance bonuses for corporate financiers are quite common and make up a significant portion of the yearly income. Corporate financiers also receive a number of other incentives which include profit sharing, retirement plans, health insurance, life insurance, paid vacations and paid holidays.
Job Description and Outlook
The job of a corporate financier can be defined as making the best use of the financial resources of a company. Corporate financiers often track income generated, expenses and the equity of the company in order to develop a financial profile of the company. They are also responsible for making budgets, managing investments, reducing financial risk of the company and estimating equity of the company. Reports made by corporate financiers are often used to develop long-term and short-term strategies for the company.
Employment for corporate financiers are expected to grow at a rate that is much faster than the average for most other occupations. The number of applicants entering this field is also expected to grow at a faster than average rate. This creates much competition among applicants, especially those who are new to the field.
As the need for corporate investment and management rises, employment of corporate financiers is expected to grow at a rate of twenty percent between 2010-2020. The main factors for this growth include the increased complexity of investments and the global diversification of corporate entities.*
*According to the BLS, http://www.bls.gov/oco/
Training and Education Requirements
For applicants to remain competitive in corporate finance it is necessary to have a strong academic background in business and finance. Typical courses for corporate finance students include finance, accounting, economics, accounting, business administration, human resources and marketing. Graduate degrees and certifications greatly improve the applicants prospects, especially master’s degrees in business or finance and CFA Certification.
Corporate financiers also must have strong analytical, math and problem solving skills. Good communication skills are another prerequisite because complex financial ideas, concepts and strategies must be presented to upper management in a clear and concise fashion. The ability to work independently without oversight is another important aspect for corporate financiers. They also must become familiar with the mechanics of the economy, various tax laws and marketing strategies.
Certifications, though not always required, greatly improve the professional standing of the corporate financier and improve their prospects of finding employment. There are several certifications that are available for those in the field of corporate finance, depending upon which area the applicant is interested. Some of the more prominent ones include Chartered Financial Analyst (CFA), Certified Financial Planner (CFP), Certified in Financial Management (CFM), Certified Treasury Professional (CTP), Certified Bank Auditor (CBA), Certified Risk Professional (CRP) and Certified Government Financial Manager (CGFM). Obtaining one or several of these certifications not only increase employment prospects, but also may significantly increase the earning potential of the applicant. Certifications that an applicant should receive is dependant on which area of expertise the corporate financier is employed.
Corporate financiers have a number of professional associations available to them for certification and professional assistance. Below is a list of some of the ones that are available:
- The American Finance Association (http://www.afajof.org/)
- Association for Financial Professionals (http://www.afponline.org/)
- American Academy of Financial Management (http://www.aafm.us)
- The Global Association of Investment Professionals (http://www.cfainstitute.org/)
- Certified financial Planner Board of Standards (http://www.cfp.net/)
- The Association for Accountants and Financial Professionals in Business (http://www.imanet.org/)
- Advancing Government Accountability (http://www.agacgfm.org/)
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