An Overview of Corporate Finance and the Financial (3)
by MaestriThis chapter should give you an idea of what corporate ?nance is all about, including an overview of the ?nancial markets in which corporations operate. But before getting into the details of ?nance, it’s important to look at the big picture. You’re probably back in school because you want an interesting, challenging, and rewarding career. To see where ?nance ?ts in, let’s start with a ?ve-minute MBA.
The Five-Minute MBA
Okay, we realize you can’t get an MBA in ?ve minutes. But just as an artist quickly sketches the outline of a picture before ?lling in the details, we can sketch the key elements of an MBA education. In a nutshell, the objective of an MBA is to provide managers with the knowledge and skills they need to run successful companies, so we start our sketch with some common characteristics of successful companies. In particular, all successful companies are able to accomplish two goals.
- All successful companies identify, create, and deliver products or services that are highly valued by customers, so highly valued that customers choose to purchase them from the company rather than from its competitors. This happens only if thecompany provides more value than its competitors, either in the form of lower prices or better products.
- All successful companies sell their products/services at prices that are high enough to cover costs and to compensate owners and creditors for their exposure to risk. In other words, it’s not enough just to win market share and to show a pro?t. The pro?t must be high enough to adequately compensate investors.
It’s easy to talk about satisfying customers and investors, but it’s not so easy to accomplish
these goals. If it were, then all companies would be successful and you wouldn’t need an MBA! Still, companies such as the ones on Fortune’s Most Admired list are able to satisfy customers and investors. These companies all share the following three key attributes.
Taken From : Five-Minute MBA - Corporate Finance
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