Definition of Corporate Finance
Corporate finance is one of the crucial parts of finance, which deals with capital budgeting, financing, and return of capital invested in the business, including dividend decisions. In other words, we can say that corporate finance is nothing but a branch of finance whose objective is to increase the value of shareholders wealth through the implementation of financial strategic planning with the balancing of internal and external risk. So a professional in corporate finance is primarily tasked to deal with various sources of funding, budgeting, and analyzing and monitoring of fund investors.
In the present scenario, a career in corporate finance becomes a lucrative option for the decisive growth in career path and remuneration. It is not so much vibrant at the past where a professional gets an opportunity for experimentation, analysis, allocation and measuring optimum utilization of various resources to maximize the owner’s funds. The following essential qualities are considered for a potential candidate in this field –
Education Required for Making Career in Corporate Finance
To be established as a finance professional or to move up the ladder in the career path, one can do CA (Chartered Accountancy), ICWA (Cost and Management Accountancy) or an MBA (Masters of Business Administration) with specialization in finance. Still, there are various certificate and training courses provided by some renowned business schools and universities all over the world covering this particular niche of finance. But the cost of participation in those courses varies from one school to another, and that is why the aspirant should consult the institutions individually to obtain specific information regarding tuition fees and faculties. Some of the acclaimed corporate finance courses are as follows –
- Chartered Financial Analyst (CFA)
- Certified Financial Planner
- Chartered Institute of Management Accountancy
- Chartered Accountancy from Institute of Chartered Accountants in England and Wales
- Financial Risk Management
- Certified Public Accountants (CPA)
- Bachelor of Financial and Investment Analyst
- Company Secretary from Institute of Company Secretaries of India
- Financial and Banking Analysis certification
- Post-graduation diploma in financial management
These courses give an edge to the career path considering the real business situations and challenges.
Career Path in Corporate Finance
The professional who has aspired to establish him or her in the field of corporate finance must have strong analytical skill along with problem-solving and commercial awareness; these are the key ingredients that companies basically search in a candidate. The job of corporate finance professional encompasses four crucial responsibilities, including identifying the requirement, taking strategy, allocating financial resources, and monitoring the investment to achieve the goal of business.
The career path of a professional in corporate finance is highly lucrative as it pops up mammoth learning opportunities. The professionals of this knowledge domain demand high respect in the corporate world as they handle areas such as business valuation for listing in the stock market, dealing with mergers and acquisition, issuing debentures and bonds for raising debts, capital structure decisions, cross border transactions involving international financial management, managing currency and it’s volatility, strategizing various risk management measures such as currency hedging, swaps including interest rate swaps and working capital management.
Job Positions or Application Areas
There are many career options for an enthusiast to become a corporate finance professional. Some prominent position which is highly demanding are as follows –
- Chief Financial Officer ( CFO)
- Investment Manager
- Fund Manager
- Financial Analyst
- Cost Analyst
- Credit Manager
- Benefits Officer
- Investor Relations Officer
In today’s business world the corporate finance encapsulates various roles in a diverse range of industries like banks, corporates, institutions, PSU and public accounting, and various consulting firms. So as a student or a professional, you have to be cautious about your strengths and interest to choose the right direction in your career path. A professional can also become an entrepreneur in consulting role by opening up his own firm armed with a certificate of practice from any of the reputed institutes such as CA, ICWA, CFA, CPA, etc.
The professionals of corporate finance are renowned for being highly paid, though it differs from company to company or industry-wise depending on the intricacies of policies, experience, and qualification of the employee and the organization structure, ecosystem of the industry. In India, people who are in this profession can expect to start earning at a minimum of Rs.50000 – 60000 per month and with experience can go beyond Rs.500000 per month approximately associated with some incentives or bonuses or attractive perks.
Career Outlook in Corporate Finance
The prospect and demand for the career of corporate finance are highly challenging. In tough competitiveness, fresh talented young financial advisors are highly acclaimed to take key decisions for the growth of a business. It is anticipated that the growth of financial jobs is steadily faster than others due to the growing need for various financial decisions required in the market owing to a highly complex market structure. It is estimated to grow @11 percent from 2016 to 2026, faster than the average of other occupations. With the advancement of new technologies like artificial intelligence, cloud computing, robotic process automation may obsolete some kind of mundane accountancy jobs; but new kinds of opportunities will emerge with evolving market demand and the introduction of new technologies. So the future workforce in finance must have the skill to combine technology, knowledge, emotional intelligence, and interpersonal people skills. It is forecasted that the priority of future finance function will take a new dimension, as provided in the below chart.
This has been a guide to a Career in Corporate Finance. Here we have discussed the Education, Career Path, Job Position, Salary, and Career Outlook in Corporate Finance. You may also look at the following article to learn more.