II. Career Paths in Finance

A. Corporate Finance

Most corporate finance positions involve solving problems using a combination of intuition and analytical skills. It is also important to be comfortable with ambiguity and an environment where tasks change from day to day. Technological literacy with computers, particularly spreadsheets, word processors, and presentation packages, is essential. This is especially true for entry-level positions where computational skills are essential for executing the details of corporate financial planning, accounting and raising capital.

The most important personal attribute sought by corporate finance employers is initiative. In addition, as U.S. companies continue to expand globally, positions will often lead to international assignments and opportunities. As a result, knowledge of a foreign language combined with knowledge of international corporate finance is highly desirable. Finally, the use of sophisticated corporate risk management strategies has increased in recent years, leading to a demand for individuals who are familiar with models, techniques, and derivatives that can be used to manage risk.

1. Personality Traits and Skill Requirements. In the area of corporate finance, different jobs and companies require different skills. A typical job in corporate finance at a typical company would likely require the following skills:
   1. People Skills: High
   2. Sales Skills: Low to Medium
   3. Communication Skills: Extremely High
   4. Computer Skills: High
   5. Analytical Skills: High
   6. Ability to Synthesize: Medium to High
   7. Creative Ability: High
   8. Initiative: Medium
   9. Work Hours: 40-55/week

2. Key Career Areas
   1. Treasurer. The treasurer is responsible for the supervision of the Treasury department, which is involved in financial planning, raising funds, cash management and acquiring and disposing of assets. This is an upper management job, which requires both analytical skill and the ability to manage and motivate people.

   2. Financial Analyst. Financial analysts are responsible for determining a firm's financing needs, analyzing capital budgeting projects, conducting long-range financial planning, analyzing possible acquisitions and asset sales, visiting credit agencies to explain a firm's position, working on budgets, analyzing competitors, implementing financial plans, monitoring the market price of your firm's securities, analyzing lease agreements, and determining needs and methods of dealing with derivatives. Often, the financial analyst will be assigned to a specific area such as revenue, planning, capital budgeting or project finance. This challenging job requires good analytical skills, computer skills and a broad understanding of finance.

   3. Credit Manager. The credit manager's duties include establishing policies for granting credit to suppliers, setting guidelines for collecting on credit, and considering whether to securitize receivables. This job requires knowledge of the customer and the ability to analyze accounting statements.

   4. Cash Manager. The cash manager is responsible for establishing relationships with banks, managing short-term credit needs, ensuring that sufficient cash is on hand to meet daily needs, putting excess cash into concentration accounts bearing interest and handling international transfers of funds. This job is detail-oriented and requires good ability to negotiate.

   5. Benefits Officer. The benefits officer is responsible for managing pension fund assets, setting up employee 401(k) plans, determining health care benefit policies, and working with human resources to set up cost-effective employee benefits. This job requires a combination of finance knowledge, knowledge of human resources management and understanding of organizational behavior.

   6. Real Estate Officer. This job involves finding real estate locations for a company, negotiating lease agreements, acquiring real estate, and valuating properties. This job requires a thorough understanding of finance and real estate.

   7. Investor Relations Officer. Duties involve dealing with the investing public by disseminating financial information, responding to queries from institutional investors, issuing press releases to explain corporate events, and organizing teleconferences with investors. This challenging job involves contacts with top-level executives and requires understanding of finance and public relations. Many who hold this job have backgrounds in PR or advertising.

   8. Controller. The controller is responsible for financial planning, accounting, financial reporting and cost analysis. The controller will also get involved in property, revenue, benefits, derivatives, lease and joint interest accounting, and may need to develop forecasting models to project revenues and costs. The controller may be required to implement or work with a complex costing system, efforts at financial reengineering, transfer pricing issues or interface with auditors. This job requires extensive accounting experience. Often holders of this position enter a company from a Big Six accounting firm.

3. Salaries. Starting salaries in corporate finance with a Bachelor's Degree in Finance range from $25,000 to $35,000. Starting salaries with an MBA degree range from $30,000 to $70,000. At an entry-level job with a bachelor's degree you would usually be called a junior financial analyst. In an entry-level job with an MBA you would usually be called a financial analyst.

   Robert Half International surveys CFOs annually and reports the following typical salary ranges:

   Rookie Financial Analyst at Smaller Firms: $23-27K
   Rookie Financial Analyst at Larger Firms: $26-31K
   Seasoned Financial Analyst at Smaller Firms: $33-39K
   Seasoned Financial Analyst at Larger Firm: $38-47K
   Credit Managers: $30-63K
   Tax Managers: $57-105K
   Assistant/Divisional Treasurers: $40-78K
   Chief Financial Officers at Larger Firms: $232-295K
   Chief Financial Officers at Smaller Firms: $60-93K.

   Below are salary ranges in corporate finance at some leading large corporations (salaries at smaller firms may be lower).

   Job Title	General Motors	Pepsico	Experience/Education
   Junior Financial Analyst	$20,000-$43,200	$45,000-$50,000	B.B.A.
   Senior Financial Analyst	$46,910-$82,644	$60,000-$70,000	3 yrs/MBA
   Divisional Controller	$110,000-$172,000	$70,000-$80,000	10 yrs/ MBA
   Chief Financial Officer	$200,000-$350,000	$150,000-$200,000	15yrs / MBA

4. Suggested Coursework. Careers in corporate finance are focused on the day-to-day management of a corporation's finance functions. Courses relevant to a major in corporate finance would include the following:
   1. Strongly recommended:
      Corporate Finance
      Advanced Corporate Finance
      International Corporate Finance
      Investment Analysis and Portfolio Management
      Derivatives
      Corporate Restructuring
      Taxation and Management Decisions
      Money and Capital Markets
      Corporate Strategy
      

   2. Recommended:
      Financial Statement Analysis
      Corporate Financial Reporting
      Investment Banking & Financial Intermediation
      Market Microstructure and Trading
      

   3. Other Suggested Courses:
      Decision Analysis
      Marketing Strategy
      International Marketing
      

5. Useful Professional Certifications

   Certified Employee Benefit Specialist (CEBS)
   Certified Managerial Accountant (CMA)
   Certified Financial Manager (CFM)
   Certified Cash Manager (CCM)
   Certified Public Accountant (CPA)
   Certified Internal Auditor (CIA)

6. Internet Resources

   Web100
   Careers in Finance: Corporate Finance: Links and Resources
   The Association for Finance Professionals (AFP)
   Career Journal, From the Wall Street Journal
   Financial Executives International
   Financial Job Network
   Hoovers Online
   Robert Half Career Center
   Corporate Finance Jobs
   

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