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An Overview of Finance

An Overview of Finance. Chapter 1. Career Opportunities in Finance. Financial markets Investments Managerial finance. Career Opportunities in Financial Markets. Financial institutions Banks Insurance companies Savings and loans Credit unions. Career Opportunities in Investments.

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An Overview of Finance

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  1. An Overview of Finance Chapter 1

  2. Career Opportunities in Finance • Financial markets • Investments • Managerial finance

  3. Career Opportunities in Financial Markets • Financial institutions • Banks • Insurance companies • Savings and loans • Credit unions

  4. Career Opportunities in Investments • Stock brokerage firms

  5. Career Opportunities in Investments • Banks

  6. Career Opportunities in Investments • Investment companies

  7. Career Opportunities in Investments • Insurance companies

  8. Career Opportunities in Managerial Finance • All types of businesses • Skills used in other fields besides finance

  9. History of Financial Markets • Early 1900s - banks were full service financial organizations • Crisis of 1907 • Bank failures during 1920s • Great depression 1929 - 1933 • Legislative reform • Deregulation since 1970s

  10. History of Investments • Early 1900s investments dominated by small group of wealthy investors • Industrialization during WWI • Growth of investment firms by 1920s • Stock market crash 1929 – 1932; market value decreased > 80%

  11. History of Investments • Regulations of securities • Prosperity after WWII • Inflation and high interest in 1970s • Increase in individual and institutional investors

  12. History of Managerial Finance • Emergence as a separate field of study • Early 1900s • Emphasis on mergers and capitalization • Wave of mergers during 1920s • Bankruptcies in 1930s

  13. History of Managerial Finance • Liquidity stressed during 1940s & ‘50s • Analysis and maximizing value in late 1950s and the 1960s • Innovative risk management in 1970s

  14. History of Managerial Finance • Focus on valuation continued in 1980s, analysis expanded to include: • Inflation and effects on business decisions • Deregulation of financial institutions • Increase in computer analysis and electronic information transfer • Increased importance of global markets • Innovative financial products

  15. History ofManagerial Finance • 1990s have seen evolution continue • Continued globalization of business • Further increase in use of technology • Regulatory attitude of government

  16. Importance of Managerial Finance • Financial managers no longer merely fund the business needs • Financial managers coordinate decisions • People in marketing, accounting, production, and personnel need to understand finance to do their job well

  17. The Financial Manager’s Responsibilities • Obtain and use funds in a way that will maximize the value of the firm • Forecasting and planning • Major investment and financing decisions • Coordination and control • Dealing with financial markets

  18. End of Chapter 1 An Overview of Finance

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