Scope of Corporate Finance
The Scope Of Corporate Finance
Professor Dr. Rainer Stachuletz Corporate Finance
Berlin School of Economics
Finance Career Opportunities
Corporate Finance
• Budgeting, financial forecasting, cash management, credit administration, investment analysis, fund procurement
Commercial Banking Investment Banking Money Management
2
• Consumer banking • Corporate banking
• High income potential • Very competitive industry
• Opportunities in investment advisory firms, mutual fund companies, pension funds, investment arms of financial departments
• Advise on business practices and strategies of corporate clients
Prof. Dr. Rainer Stachuletz Corporate Finance Berlin School of Economics
Consulting
Raising Capital: Key Facts
Most financing comes from internal rather than external sources (“pecking order”). Most external financing issued as debt
Primary vs. secondary market transactions or offerings Traditional financial intermediaries (banks) declining as a source of capital for large firms
3
Securities markets growing in importance
Prof. Dr. Rainer Stachuletz Corporate Finance Berlin School of Economics
Growth in Global Security Issues,
1990-2003
$ Bn
6000
5000
4000
Global debt & equity
3000
2000
U.S. Issuers worldwide
1000
0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Prof. Dr. Rainer Stachuletz Corporate Finance Berlin School of Economics
4
Role of The Financial Manager
(2) (1)
Firm's operations
(3)
Financial manager
(4a)
Financial markets
(4b)
(1) Cash raised from investors (2) Cash invested in firm
(3) Cash generated by operations (4a) Cash reinvested (4b) Cash returned to investors
5
Prof. Dr. Rainer Stachuletz Corporate Finance Berlin School of Economics
Corporate Finance Functions
External Financing
Capital Budgeting
Corporate Finance Functions
Financial Management
Risk Management
Corporate Governance
6
Prof. Dr. Rainer
Professor Dr. Rainer Stachuletz Corporate Finance
Berlin School of Economics
Finance Career Opportunities
Corporate Finance
• Budgeting, financial forecasting, cash management, credit administration, investment analysis, fund procurement
Commercial Banking Investment Banking Money Management
2
• Consumer banking • Corporate banking
• High income potential • Very competitive industry
• Opportunities in investment advisory firms, mutual fund companies, pension funds, investment arms of financial departments
• Advise on business practices and strategies of corporate clients
Prof. Dr. Rainer Stachuletz Corporate Finance Berlin School of Economics
Consulting
Raising Capital: Key Facts
Most financing comes from internal rather than external sources (“pecking order”). Most external financing issued as debt
Primary vs. secondary market transactions or offerings Traditional financial intermediaries (banks) declining as a source of capital for large firms
3
Securities markets growing in importance
Prof. Dr. Rainer Stachuletz Corporate Finance Berlin School of Economics
Growth in Global Security Issues,
1990-2003
$ Bn
6000
5000
4000
Global debt & equity
3000
2000
U.S. Issuers worldwide
1000
0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Prof. Dr. Rainer Stachuletz Corporate Finance Berlin School of Economics
4
Role of The Financial Manager
(2) (1)
Firm's operations
(3)
Financial manager
(4a)
Financial markets
(4b)
(1) Cash raised from investors (2) Cash invested in firm
(3) Cash generated by operations (4a) Cash reinvested (4b) Cash returned to investors
5
Prof. Dr. Rainer Stachuletz Corporate Finance Berlin School of Economics
Corporate Finance Functions
External Financing
Capital Budgeting
Corporate Finance Functions
Financial Management
Risk Management
Corporate Governance
6
Prof. Dr. Rainer