Corporate Finance – InsideIIM Career Guide – Created by Kala Krishnan
For the 1st Part under this series which covers Corporate Banking, please click here
20 days down (Corporate Banking all the way) when Tito looks back all he can remember is Senorita D’cruz the tall, blonde…..!!!!! – The countdown continues and now introducing Mrs. Zoe Nano Chinappa, Tito’s mom…
The night before his corporate finance adventure was all set to begin; Tito could hardly get any sleep. All he could hear was Zoe Chinappa’s loud voice echoing in his ears with an introduction to corporate finance. (Which she gave her poor son instantly after he got his result—it was not “congratulations!!!” it was “corporate finance”, sounds similar???).
It said “Corporate finance is the area of finance dealing with monetary decisions that business enterprises make and the tools and analysis used to make these decisions. The primary goal of corporate finance is to maximize shareholder value.”
Tito sat up on his bed and made note of what the echo told him……….in his famous diary…..
Corporate finance is widely bifercated to long term and short term decisions……
He then managed to get some sleep. The next day at Zooloo Land Company Pvt Ltd- Tito Chinappa starts his second journey with a tour of the corporate finance floor. He meets Mrs Zeenat Zoro a middle aged lady who was to introduce him to corporate finance and all his hopes come crashing down!!! (ohh he wishes for Ms Senorita D’cruz…the tall, blonde…forget it…). What else could he have expected with his mother setting up a meeting for him…
She begins her lecture….as he looks into space…(Mercy!!!)
“A career in corporate finance means you would work for a company to help it find money to run the business, grow the business, make acquisitions, plan for its financial future and manage any cash on hand. You might work for a large multinational company or a smaller player with high growth prospects. Responsibility can come fast and your problem-solving skills will get put to work quickly in corporate finance jobs.
Core competency remaining uniform corporate finance jobs differ as we move from sector to sector. Here we try and explore 2 completely unrelated areas and track corporate finance as a career profile, its basic functions, what is expected of a corporate finance professional and everything good and bad attached to it to everything which finally gives you the money, the reputation, the status and undoubtedly the sought after ‘Corporate Finance’ tag.”
Tito needs a break but she continues to show off her knowledge, “A corporate finance professional initially begins at the micro level which is with project finance. Finance is restricted to individual projects and each project is given separate importance. An individual is allotted a particular project and he has to look into various aspects of the same. As a person climbs the corporate ladder he moves from project finance level to corporate finance where he looks into the complete operations which include not only projects but also the customer and supply chain management, liquidity issues, idle funds management etc….The necessary qualities and the standard role of a corporate finance professional at different stages include :-
Finally she has a slide show ready for him and Tito feels relieved as her cuckoo like voice had almost put him to sleep and the lullaby was over. He finally finds something worthwhile. The slide show begins and Tito gets his diary out…the pen follows suite…
- A corporate finance professional must have a strong base with regards to market dynamics, understanding the trends and studying the market graph.
- The core competencies include analyzing markets, risk and return relationships.
- Identifying the category of investors suitable for a particular investment on the basis of time, risk, conditions.
- Deciding the kind of funding from amongst NBFCs, Private Equity or a plain vanilla funding.
- Also a corporate finance executive must have an overview in areas like taxation, compliance and legal aspects.
- Documentation in respect of interpreting basic clauses and understanding them.
- Another quality required is the art of negotiation to the extent possible keeping in mind factors like risk, return or upside and downside.
- Budgeting is another important profile for corporate finance professionals.
- On an overall level it includes managing cash flows, collections from customers and payment to suppliers with idle cash management.
- Finally at a higher level corporate finance executives look into what is ideally called ‘Fund Management’
Capricorn Builders Pvt Ltd was on the lookout for investors as they launched a new project which was a commercial cum residential venture at one of the most premium locations in the city of Mumbai. The corporate finance executives in charge of the project carried out the following :
If you are preparing to secure your dream job, you may want to visit – The InsideIIM Career Guide
Also see results of the InsideIIM Recruitment Survey 2012
Created by Kala Krishnan
Kala Krishnan is a Chartered Accountant and pursuing her Company Secretary course. She is a graduate from Narsee Monjee College of Commerce and Economics. She has a passion for writing and oration and the idea of being an author and owning a publishing house excites her the most. She has been the Sub editor of ‘Sans Frontiers’ the official magazine of Umang – Narsee Monjee College’s festival. A cricket lover, Rahul Dravid and Sourav Ganguly inspire her and she dreams of writing their biography someday…..