“Understanding Corporate Finance: Roles, Careers, and Opportunities”

Introduction to Corporate Finance

We will define corporate finance and go through some of the things that finance that a company actually does uh we’ll go through what some of the other finance careers are at a high level we’ll talk through benefits of a career in corporate finance and we’ll also review some of the things some examples of things a finance manager or finance analyst within corporate finance might work on.

What is Corporate Finance?

Okay so what is corporate finance so the finance it’s the finest division within a company or it could be even a government or a non-profit or a church you can have a finance division technically those jobs are effectively corporate finance jobs overseer of the finance function is the cfo or chief financial officer officer and these are big jobs big companies you know when you look at big publicly traded companies often the cfo is kind of considered the second in command of the of the company.

Functions and Responsibilities of Corporate Finance

Now so what what does the corporate finance function do so they make sure track transactions are recorded accurate and compliant with whatever uh standards applied to the country or the type of business that you run they take those transactions and they create financial results and they report those to the operating team sometimes to investors owners and they analyze those results to make sure that the health of the company is strong now they their job really isn’t only to report and analyze those results and monitor them but they want to play a role in optimizing the performance of the company so how can they help to increase revenue how can they reduce cost how can they optimize the the profitability overall profitability of the company and they should be doing analysis and working with the operating teams the sales team whoever to to try to increase the performance the finance division owns kind of oversight over what projects are invested in what products are developed assets are purchased talk about this as capital expenditure they also are going to set a forecast and or a budget for how the company will operate and this is often done in a very short term but then also longer term three year forecast five year tenure so these are the targets that have to be set intelligently so that they can drive again the sales team the operating teams to achieve those and to ultimately result in the success of the company they need to make sure they have adequate cash you need to know the inflows the outflows of cash often they also manage the funding of the business how they get capital uh whether it’s commercial paper loans equity you name it they model and they may model and underwrite deals so acquiring a company acquiring a new customer or selling off a portion of the business and they need to manage the risk of the company.

Clarifying the Scope of Corporate Finance Versus Other Finance Careers

Okay so that’s corporate finance but you’ll hear about a ton of other finance jobs and sometimes i think they get co-mingled some people think fp a is corporate finance or they think corporate finance is just fpa and treasury or something along those lines they may also think that investment banking or financial services they may think of those as corporate finance and and sometimes a big investment bank or a commercial a financial services firm they will still have a corporate finance entity that has a cfo and they have accountants and analysts and you name it but you know the way we think about it here and if you click the link you can see a video where we break down each of these and what those these careers do from an entry level perspective and what the career prospects look like but these are really the different areas of finance you’ve got investment banking consulting sales and trading commercial banking private equity portfolio management portfolio analysts research analysts and then you’ve got financial planning and services so there’s a broad spectrum and corporate finance is just one piece of that spectrum but this helps lay out that landscape and again if you click on the link it’s in the description as well you can learn a little bit more about each of these careers.

Advantages of a Career in Corporate Finance

Now corporate finance in particular is a really good area to have a career there’s tremendous tremendous breadth so you can have different roles you could be in you could work at a shop or a site you could do commercial finance corporate development where you’re working on deals just tremendous breadth of the roles there’s different industries you know there’s there you could work at banks you could work at manufacturing companies um internet company software companies and then there’s all different sizes from you know you might be a cfo of a small business and you might be the only finance employee at that business or maybe you’re the cfo of amazon and you have a thousand or more finance person finance team underneath you there’s not typically an up or out culture in corporate finance maybe within a certain area you know some companies have programs which are for accelerating uh into leadership roles and those might be up or out but you can have a long career uh and well compensated career in corporate finance as either a leader of teams people leader or as an individual where you’re just working on your area um and you can do it at all different levels there’s there’s room for many different people in corporate finance uh whereas you know investment banking consulting some of these you’re you kind of either progress or you have to leave and go get a different job there are a lot of placement options out of undergrad and you can again have a full career the number of jobs you need to take companies like amazon and toyota and some of these big exxon mobil they have a large large foreign finance organizations that you can have a really interesting career within one company moving to different functions or different areas of the business location and work life balance flexibility so some of the jobs like investment banking or portfolio management the research jobs are maybe focused in new york city or london or other big cities like that but corporate finance is everywhere you can from small towns to big cities all around the world and and there’s also significantly more work-life balance in many of those areas now if you want to be a cfo you’re definitely going to put in a lot of hours especially if you’re thinking about this being a cfo a public company but you’re you’re able to create a career that has balance you may you can make you know over a hundred thousand dollars a year and work very reasonable hours in corporate finance a lot of variety you work at apple amazon toyota or small company down the road you certainly can make a lot this is an outrageous example but the oracle cfo in 2019 made somewhere around 108 million dollars now largely that was in a form of equity grants and that oracle cfo moved into the ceo position but uh i there’s you’ll still find a number of cfos making over 20 million dollars a year but you also may come into a company work making 35 40 000 a year at a small company if you didn’t go to a big school and um you know just tons of variation the job categories right you could work in accounting treasury financial planning and analysis supply chain you work corporate development risk commercial finance tons of variety the work hours again you kind of you can work and select jobs that you think fit your work life balance.