Saturday, March 31, 2012

Broad Finance topics to know

  • Public Finance
  • Investment Finance
  • Business Performance
  • Corporate Finance

Public Finance

  • Public finance is the study of how money interacts with and circulates within government. Some common public finance concepts include determining tax rates, studying central bank operations and investments, and investigating monetary reform. A example of a project is a country comparison, in which the student investigates the effectiveness of another country's monetary policies toward the U.S. Such a project is common in international MBA programs.

Investment Finance

  • Investment finance is the study of how public markets gain and trade money. Concepts such as stock markets and global currency markets fall under this category. Projects typically involve a study of broad financial measures. For example, a project can be an analysis of the Dow Jones Industrial Average during the past five years, which might include a chart of the quarterly Dow results and a study of how different factors, such as booms and recessions, significantly affected the trend of the index.

Business Performance

  • Sometimes considered as the indicator of investment finance, business performance is the study of how a business increases its profitability and value. Fundamental concepts include balance sheet analysis and determining financial profitability ratios. These factors are commonly used by potential investors to determine fluctuations in a company's stock value. MBA students can do the same in their projects. For example, they can research the trend of a company's past stock prices and current company performance to predict the company's growth rate and future stock price.

Corporate Finance

  • Corporate finance involves how businesses make investment decisions. There are multiple topics included in corporate finance, such as working capital management and determining financial risk. MBA students can focus finance projects on the completion of return on investment analyses. Completing ROI forms is a required skill in corporate decision-making settings. An example assignment is to evaluate the effectiveness of a project proposal. Given a real time or simulated project proposal, the student would conduct a thorough analysis of different factors, such as cost and opportunity, and decide whether the proposal is worth the investment.

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