Text 13. Careers in finance

Careers in finance vary as widely as the scope of finance itself. Some of these career paths require extensive, highly specialized knowl­edge and advanced degrees. Others begin with entry level positions open to enthusiastic, hard-working individuals regardless of their un­dergraduate majors.

The scope of finance has increased so much over the past decade that the field is generally subdivided into three parts. Financial markets and institutions, financial management, and investments are commonly considered to be separate disciplines. The study of financial markets and institutions focuses on those public and private institutions engaged in granting loans, accepting deposits, facilitating securities transfers, rais­ing corporate funds, and regulating both the economy (domestic and global) and its financial institutions.

Financial management is concerned with how firms acquire and allocate funds. It examines how firms obtain short-term and long-term funds and how these funds are spent to acquire selected assets. Deci­sions regarding dividend policies, merger and acquisition activities, and leasing, all fall within the realm of the capital budget. Financial man­agement also emphasizes the cash budget and management of its com­ponents.

Investment analysis focuses on how individuals or portfolio manag­ers select appropriate financial and real assets. It examines the markets within which fund raising and security trading take place. It explores the methodologies used by investors, providing insights into criteria for an­alyzing companies and industries, as well as generating norms of behav­ior. The study of the markets for stocks and bonds, stock and index op­tions, warrants, and commodities and financial futures are all part of the investments area.

Careers in Institutions and Markets

Entry level positions in financial institutions and markets can in­clude everything from bank teller to credit trainee. A person with a strong finance background would probably begin as an administrative assistant to a loan officer, or as a junior financial analyst in either the credit depart­ment or the research department of a depository institution. Positions such as customer service representative or mortgage servicing specialist in an insurance company or a mortgage banking company, respectively, are generally staffed by people with limited finance back­grounds. More experienced individuals would be eligible for loan of­ficer, branch manager, or senior analyst positions.

Careers in Financial Management

Entry level positions for those with associate degrees and lim­ited experience in finance include data processing clerks, investor relations specialists, and accounts payable staff positions. Finance majors find entry level positions as junior accountants in cost or Financial accounting departments, budget analysts, or financial planners. Promotion opportunities generally lead to managerial positions such as cash manager, credit manager, or financial ac­counting manager. Senior financial management positions include CFO, corporate comptroller, and treasurer.

Careers in Investments

Generally it is the investment area that attracts people to finance. They see an appealing opportunity to control multimillion dollar invest­ment portfolios, or to be part of an investment banking institution en­gaged in mergers and acquisitions. Most brokerage houses, however, provide entry level positions as registered representatives (for those who qualify by passing specific NASD (National Association of Securities Dealers) examinations), or as investment or industry analysts. Clerical and assistant positions are always available with the major brokerage houses for those with limited experience, but excellent self-motivational skills. Senior employment opportunities include portfolio manager, senior investment analyst, and investment counselor.

EXERCISES

Exercise 1. Answer the questions.

1. The scope of finance is generally subdivided into three parts. What are they?

2. What does the study of financial markets and institutions focus on?

3. What is financial management concerned with?

4. What does investment analysis examine?

5. What are the parts of the investment area?

6. What can entry level positions in financial institutions include?

7. Where would a person with a strong finance background begin?

8. What can you say about entry level positions and promotion opportunities in Financial Management?

9. What are the appealing opportunities in the investment area?

Exercise 2. Think of the nouns that are most commonly used with these verbs. Give your own sentences with the combinations of words.

to generate, to adopt, to utilize, to perform, to involve, to seek, to provide, to facilitate.

Exercise 3. Give Russian equivalents to the following.

Grant loans, accept deposits, facilitate securities transfers, raising corporate funds, obtain funds, dividend policies, merger and acquisition activities, leasing, the realm of the capital budget, the cash budget, security trading, portfolio managers, stocks, bonds, stock and index options, warrants, financial futures, bank teller, financial analyst, a loan officer, depository institution, mortgage servicing specialist, insurance company, accounts payable staff, treasurer, brokerage house, investment counselor.

Exercise 4. Match the word with its definition.

rate, portfolio, quotation, option, warrant, exchange rate, brokerage, deposit, merger, mortgage, counselor, interest rate.

1. The value of a currency expressed in terms of another currency.

2. Numerical proportion between two sets of things.

3. Charge made for borrowing a sum of money, expressed as a percentage of the total sum loaned.

4. Indication of the price at which a seller might be willing to offer goods for sale.

5. Person giving professional guidance on personal problems.

6. Range of investments held by a person, company, etc.

7. Broker's fee or commission, which is usually calculated as a percentage of the sum involved in the contract.

8. Combining of two or more commercial organizations into one in order to increase efficiency and to avoid competition.

9. Right in property created as security for loan.

10. Money left with a bank for safe keeping or to earn interest.

11. Finance security that offers the owner the right to subscribe for the ordinary shares of a company at a fixed price.

12. Right to buy or sell a fixed quality of a commodity, currency, or security at a particular date at a particular price.

Exercise 5. Match each word on the left with its opposite on the right hand side.

1.increase a) assets

2.expends b)save

3. profit c) public

4. private d) borrow

5. debit e) decrease

6. spend f) revenues

7. lend g) purchase

8. liabilities h) loss

9. sell i) indirect

10. direct j) credit

Exercise 6. Insert prepositions.

Financial planning process

Financial planning is an important aspect... the firm's operation and livelihood since it provides road maps ... guiding, coordinating and con­trolling the firm's actions in order to achieve its objectives. Two key aspects ... the financial planning process are cash planning and profit planning. Cash planning involves the preparation of the firm's cash budg­et; profit planning is usually done ... means of proforma financial state­ments.

The financial planning process begins ... long-ran, or strategic, fi­nancial plans that in turn guide the formulation of short-run, or operating, plans and budgets. Generally, the short-ran plans and budgets implement the firm's long-ran strategic objectives.

Long-ran (strategic) financial plans are planned long-term financial actions and the anticipated financial impact of those actions. Such plans tend to cover periods ranging ... two ... 10 years. Long-ran financial plans consider proposed fixed-assets outlays, research and development activities, marketing and product developing actions and major sources of financing.

Short-ran (operating) financial plans are planned short-term finan­cial actions and the anticipated financial impact... those actions. These plans most often cover a one- to two-year period. Key inputs include the sales forecast and various forms of operating and financial data. Key outputs include a number ... operating budgets, the cash budget and proforma financial statements.

Read the text once again and answer the following questions: What are two key aspects of financial planning? What do short-run and long-run plans include?

Exercise 7. Join the halves. Translate the sentences into Russian.

1. Financial markets provide the mechanism for

2. Investment analysis focuses on

3. When a company obtains capital from external sources

4. Equity financing and debt financing provide

5. Working capital refers to

6. Financial management is concerned with

7. Transactions is short-term debt instruments that

8. Major securities traded in the capital market

9. When prices rise,

10. Finance involves

11. More experienced individuals would be eligible for

a. the funds used to keep business working or operating.

b. carrying out the allocation of financial resources, с take place in the money market.

d. include bonds and both common and preferred stock.

e. the financing can be either on a short-term or a long-term arrangement.

f. how individuals or portfolio managers select appropriate financial and real assets.

g. important means by which a corporation may obtain its capital, h. how firms acquire and allocate funds.

i. loan officer, branch manager, or senior analyst.

j. the securing of funds for all phases of business operations.

k. the same goods, cost more in terms of dollars, and the dollar's value in term of those goods falls.

Exercise 8. Give the Russian equivalents to the following.

Tax, taxation, taxable income, taxation brackets, tax avoidance, tax base, tax burden, tax evasion, tax exemption, tax-free, tax haven, tax holi­day, taxman, tax relief, tax return, tax shelter, lump-sum tax, excise tax, heavy tax, payroll tax.

Exercise 9. Match the following expressions with the correct definition.

1. Sums allocated by an organization for for future capital expenditure.

2. Ratio of sales of a company to its capital employed.

3. Income tax relief.

4. The amount provided by ways of loans.

5. Factor of production, usually machinery and plant.

6. Total depreciation of the value of the capital goods in an economy during a specified period.

7. The perceived value of people and their skills.

8. Money to carry on production and keep trading.

9. Money a company has raised from investors who bought shares.

10. Money a company borrows to strart up a new business.

11. Money invested in a project with a high chance of failure.

a. working capital

b. human capital

c. venture capital

d. share capital

e. risk capital

f. loan capital

g. capital budget

h. capital turnover

i. capital allowances

j. capital consumption

k. physical capital

Exercise 10. What is the English for?

Взимать налог; не платить налоги; облагать налогом; освобождать от налога; платить налоги; подлежать налогообложению; снижать налоги; удерживать налоги; уклоняться от уплаты налогов; до вычета налогов; после удержания налогов.