Finance

What is Finance?

Is it worth it? This is the single, simple, and critical question that finance seeks to answer. Is it worth it for a company to make a strategic acquisition? Is it worth it for a mutual fund manager to buy a particular stock? Is it worth it for a company to issue a bond? Is it worth it for a recent graduate to pursue an MBA? Is it worth it to put solar panels on a house? Finance applies quantitative and qualitative analysis to answer these questions and many others, all with the aim of determining whether something is worth it.

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More broadly, finance is the study of the optimal allocation (procurement, deployment, and distribution) of scarce financial resources. What is the best way for a startup to acquire financing? What are the best new projects for a firm to invest in? What is the best way for a mature firm to return excess capital to its shareholders? These are all questions finance seeks to answer.

Finance professionals:

• Forecast expected cash flows from investment opportunities and potential projects
• Assess the risk and uncertainty associated with investment opportunities and potential projects
• Perform industry and macro-economic analysis
• Estimate the value of financial assets and options
• Minimize, manage, and hedge risk
• Study the efficiencies of the markets in which financial assets trade
• Analyze the interplay between time and interest
• Utilize diverse technical, analytical, critical-thinking and problem solving skill sets