ROLES FOR FINANCE PROFESSIONALS

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Objective
To make students aware about kind of jobs that they can target To make students aware about necessary skill sets to qualify for their target job To equip students with knowledge so that they may judge whether offered job is:
A finance job Marketing of financial products An administrative job

While the list may not be exhaustive, it gives a fair idea of the profiles available to finance students

3 functions of Finance
Three broad categories of finance functions
Raising of Fund Deploying of Fund Monitoring performance of fund

Finance executive job roles involve doing any one or all of the above

Career Option 1

STOCK MARKET

Careers in Stock Market

SELL SIDE
Industry jargon for Stock brokers

BUY SIDE
PE firms Mutual funds (Asset Management Companies) Wealth management firms (that manage entire wealth of select clients) Endowment funds (college, university or donation led funds) Hedge funds (cross countryasset class, multiple strategy user fund) Pension funds(retirement planning & saving funds)

INVESTMENT BANK or MERCHANT BANKING

Job Profiles
SELL SIDE
BSE has 5,000 listed stock. Sell side analyst researches and suggests few stocks where an investor (individual or buy side fund) can invest money. Sell side only advises others; does not invest itself

BUY SIDE
Clients give their money to Buy side analysts, who invest it to generate good returns. Similar to Sell side, except that YOU call the shots. Sell Side advises Buy Side, who makes the final decision

INVESTMENT BANK
Help a company in IPO (which company & at what price), M&A (which company to acquire & at what price), do buyback (at what price), do open offer (of which company & at what price)

Requirement for stock market jobs

You must figure out every sectors own analysis metrics
Retail: Revenue per square feet IT: Onshore-offshore revenues, Utilization, Billing rate Hotel: ARR, Occupancy, RevPAR

Financial Analysis
No use memorizing all 35 financial ratios if you dont know which one to use for a steel company or FMCG or IT companies Right ratios to see depend on the nature of the business.
What EBITDA margin should a typical steel company have? Shipping Companies profit margins are 80%; FMCG has 8-10%. Yet FMCG companies are more popular with investors. Why?

Valuation: Which technique should one use?

Different companies require different valuation methods DCF or P/E are not one-size-fits fits-all

Key skills
Business Model Analysis: ability to make sense of a business
Different businesses have different dynamics
E.g. HUL has almost nil fixed assets, while Tata Steel has huge fixed assets. Yet what makes them both successful businesses?

Without understanding of business model, everything else remains a mystery

Financial Analysis: analysis of financial performance

How to figure out whether a business is good or not? Whether reported numbers are Genuine or Fake?

Financial Modeling: ability to project / forecast Profit and Loss, Balance Sheet and Cash Flow statements
Reading existing statements is easy. But estimating is tough

Key skills
Valuation: Infosys, HUL and Tata Steel are good companies. But does it mean one can buy them at any price? When does one sell them?
There are dozens of valuation techniques. You have to know the right technique to value the share
You can use DCF, P/E, P/B, EV/EBITDA, EV/Capacity, EV/Sales or any other parameter. Which one would you use and why?

How do you value a loss making company?

Communication skills
Strong written and verbal communication skills are required to convey your ideas generally in report forms Any idea is not worth anything if not communicated properly

Hierarchy of Sell Side

15yrs+ 6-15yrs 3-6yrs 0-3yrs
Head of Research

Senior Research Analyst

Research Analyst

Research Associate

Hierarchy of Buy Side

20yrs+ 10-15yrs 3-6yrs 2-3yrs
Chief Investment Officer (CIO)

Fund Manager

Senior Research Analyst

Research Analyst

Career Option 2

BANKS

Careers in Banks
PROJECT FINANCE
Financing of large infrastructure and manufacturing projects

CREDIT APPRAISAL
Analysis of the riskiness of an individual or corporate borrower to determine their creditcredit worthiness Rating agencies like CRISIL and CARE also have similar profiles

RELATIONSHIP MANAGEMENT
Helps banks clients (which could be individuals, companies, other banks) in investment decisions

Job Profiles
RELATIONSHIP MANAGEMENT
Interact with customers of banks, identify their needs and recommend them financial products

PROJECT FINANCE
Study the project that requires financing to analyse the most suitable method of financing and predicting Prepare financial models and estimates to identify, reduce and spread risk of the project Interact with other banks involved in the deal, conduct periodic plant visits Conduct periodic stress test analysis to test any risks in the loan portfolio

CREDIT APPRAISAL
Develop financial models, analyse financial position of companies and assess risks involved in lending them money

Key skills for project finance

Financial modeling skills
To make accurate financial spreadsheets and projections

Understanding of business and financial statements

For competitor and financial analyses and quarterly project reviews

Ability to identify financial risks

To provide fair risk assessment and reduction strategies To conduct a periodic portfolio analysis and suggest suitable corrective actions. This ability comes with understanding of the business

Networking skills
To work with teams and share information relevant to them For deal origination and development of business plans

Key skills for credit appraisal

Deep knowledge of financial statements and ratios
To see a clear picture of the situation, the right financial ratios must be analysed

Financial modeling
To predict trends and patterns using statistical software

Understanding of risk; strong analytical skills

To perform risk assessment analysis and find out the credit creditworthiness of a borrower

Good written communication skills

To recommend and advise changes, if required, to various credit policies, procedures and methodologies To present technical information clearly when needed

Key skills for relationship management

Knowledge of different asset classes and financial products Good understanding of finance
To identify the effectiveness of a financial product

Ability to develop the risk profile of the client

Different clients have different risk appetites and need appropriate products

Good verbal communication skills

To interact with clients with varying needs and backgrounds

Career Option 3

CORPORATE FINANCE

Careers in Corporate Finance

EA TO CEO/MD
An Executive Assistant helps a CEO or MD get through myriad information and assists him in making fast & accurate decisions

BUSINESS CONSULTING
Assist various businesses in strategy formulation, enhancing business performance etc

INVESTOR RELATIONS
For listed companies To maintain companys relations with buy and sell side analysts and investor community

STRATEGIC PLANNING
Work with the CFO to formulate strategic plans of the company Raise debt or equity

Job Profiles
EA to CEO
Analyse all plans made by corporate planners and recommend the best to the CEO Follow up on projects and report on their progress In short, advise and help CEO in all his roles

CORPORATE INVESTOR PLANNING RELATIONS

Make growth plans through projects or acquisitions Prepare company budget, analyse financials of business units and plan for improvement Help raise funds for company Link between company and investors Release financial announcements to press and investors, interact with analysts, Host conference calls etc.

Key Skills for an EA

Very similar to that of Analyst working in Buy or Sell side firm
Business Model Analysis Financial Analysis Financial Modeling Valuation tools & technique Strong verbal & written communication skills

Key Skills for investor relations

Good analytical skills to understand own company and competitors
Requires similar skills to buy side and sell side analysts, as IR has to understand analyst reports to check market opinion

Good communication skills

For summarizing the prevailing analyst and investor opinions to top management To be able to supervise the creation of all annual reports, stock exchange and other regulatory filings.

Well organised
For planning investor conferences, road shows etc. To develop and maintain a company investor relations plan Establish and maintain relationships with stock exchange representatives

Key skills for Corp. Planning and Consulting

Strong Financial and Business understanding
To be able to analyze industry and help management formulate Business strategies & policy

Good communication skills

To convey the recommendations and studies to top management in a succinct form

Logical thinking
Comes with better understanding of business. Ability to understand a investment/divestment decision and communicate the same with help of financials financials.

Hierarchy in Corporate Finance

LEVEL 1

EA to CEO (highest post)

LEVEL 2

Investor relations (reporting to CFO)

Corporate Planning (reporting to CFO)

Business Consultant (works with CEO and CFO)

Career Option 4

ENTREPRENEURSHIP

Entrepreneurship
Lucrative option that the field of Finance can provide you
As a professional Finance Executive, you would have a strong knowledge base of finance and investment.

Can open up own shop of financial management

Manage individuals or families wealth for a fee Can set-up own stock broking firm easily through a franchisee route.

Job Profile
CEO of your OWN firm

Do everything or help your team in client acquisition to management to service delivery

While you take care of the main thing: Managing Money

Key Skills
Understanding client profile and suggesting right product
Would recommend equity investment for 65yr old retired person and young 25 yrs old working executive? Gold has been going up for past 4yrs, would you suggest your clients to add even thought gold was flat for 10yrs? There are over 5,000 stock listed stock exchange, can you suggest few stocks where investor can make money? There are over 10,000 Mutual Schemes, which one would you suggest to invest in? Is forex really investment destination? If real estate prices always increases, then why do PEOPLE need YOU, they ought to invest everything in real estate?

Key Skills
Ability to understand all the asset class
Risk & return profile of each

Ability to understand risk appetite & return requirement of an individual

Portfolio construction

Capacity to differentiate useful from waste Strong networking talent

Career Option 5

MEDIA

Careers in Media
You can work as a professional Research Analyst with media companies across the stream
TV: CNBC, ET Now, NDTV profit, UTV Bloomberg Print media: Newspapers & Magazines the Economic Times, Business Standard, Mint, Financial Times, Outlook Money, Business today, Business world Digital media: Moneycontrol, morningstar, etc ,

Job Profile
Follow one or more sectors and companies for any new story on them Build relationship with companies, Government departments, sell side & buy side analysts to keep abreast of the latest action in your sector Analyse the key events, latest trends, issues and developments to report any relevant story

Key Skills
Understanding of different businesses
Each sector is different. You have to figure out what drives sales and profit of a particular sector You must be able to analyse the reality behind every statement of companies and the government

Good communication skills

Media regularly interacts with CEOs of companies, who have little time. The need is to communicate well with those CEOs in that time

Strong networking skills Understanding of financials of allotted companies

To understand the implications of a development

Key industries that hire MBA Finance

Stock Broking houses Banks Media TV, Print, Digital Investment banking Private Equity Asset Management Companies Wealth management firms Banks Endowment funds Pension funds Hedge funds Consulting firms Investor Relation Department of companies Strategic/corporate planning departments in companies

About Equitorials
Equitorials offers research and advisory services to investors and skill building courses for financial services firms and students The team has nearly 25 years of experience in tracking Indian stock markets tracking nearly all reputed listed companies Alternate Research House - Equitorials offers independent advisory and research services pertaining to equity investments. Training Institute - Equitorials offers a bouquet of highly skillbased short-term courses on stock market for students, investors and professionals. We believe in educating our participants based on the practical knowledge and experience that we have acquired over the years. The faculty includes IIM-A grads, fund managers and research analysts

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