Corporate Finance For Dummies. Michael Taillard

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СКАЧАТЬ by charging interest and by charging member banks a membership fee.

      The controversy and confusion comes into play as the Federal Reserve receives money from the U.S. Treasury and then lends it out to member banks. The setting of interest rates is also one of the responsibilities of the Federal Reserve.

      The reality is that the Federal Reserve is simply acting as a middleman for the distribution of funds, although the government can distribute funds without help from the Federal Reserve by way of spending more money through hiring contractors or distributing stimulus spending (like the new homebuyer’s tax credit). Banks tend to only purchase money from the Federal Reserve when they need to increase the total amount of money available, because interbank loans are a cheap, fast, and easy way to handle short-term shortages of money in reserve.

      

What do corporations need to know about the Fed? Because it sets the rates that other banks pay to borrow money, it also indirectly controls the rates that banks will charge customers. After all, banks always charge rates higher than they, themselves, pay. The Fed also plays a large role in controlling money supply. In short, the Fed is in charge of U.S. monetary policy, so most of what I cover in this finance book is directly related to the actions of the Fed.

      U.S. Treasury

      The U.S. Treasury is a division of the U.S. government and is, quite possibly, the simplest arm of the U.S. government to understand, at least regarding finance. The U.S. Treasury isn’t a decision-making body, so the actions it takes must always be set in motion by the federal government — either Congress, the president, the Supreme Court, or some combination of the three. For instance, the Treasury distributes payments on behalf of the federal government, but it doesn’t make those payments on its own. Congress sets the budget for each branch of the government, and when the branches spend that money, the Treasury’s job is to distribute the allotted funds.

      That being said, the Treasury is in charge of distributing government funds, collecting revenues by way of the IRS, issuing government debt (by selling Treasury bonds, Treasury notes, and Treasury bills, which are how government debt is generated), printing new money, and destroying old/damaged/faulty money.

      

What you need to know about the Treasury is that it’s where your government bonds and risk-free investments come from and it’s where your payments come from if you own government investments or do any contracting work for the federal government, as many corporations do.

Getting a Job in Finance Land

      As with most places in the world, your visit to Finance Land will be a short one unless you can find work. The following sections outline some roles to consider in this land of other peoples’ money.

      Accounts payable and/or receivable

      Accounts payable specialist and accounts receivable specialist sound like they should be similar roles. In terms of the basic paperwork and function, they are quite alike. An accounts payable specialist manages paying bills that are due, while the accounts receivable specialist collects money that is owed. The real significant difference is that paying bills is a lot easier than collecting money from people who owe, so accounts receivable quickly turns into a role of debt collection. It's not a bad entry-level position to get started in the finance, though.

      HR and payroll

      This role is very much the liaison between Finance Land and the employees of a company who generally haven't specialized in finance. Paychecks and benefits and retirement accounts and insurance stuff and time off — they are all handled here. This role has a greater customer service feel to it, so it helps to be a “people person,” as they say.

      Analysts

      Analysts have the best job in the financial world, as far as I’m concerned. These people get to do a whole lot of research and analysis to derive useful information from data or otherwise yet unstudied scenarios. Normally, analysts receive budget information or corporate financial information and are told to do the calculations necessary to make recommendations. Often these projects are fairly broad, and analysts have to model new forms of calculations, assess market trends, and make other similar efforts that require a degree of creativity and innovation.

      Auditors

      As you’re typing on the computer, if you spell a word incorrectly, spell-check will likely correct you. Auditors are kind of like the spell-checkers for corporate finance. They go back and check the work of all the other financial professionals, making sure everything is accurate, correct, and done properly. They’re also usually the ones who discover cases of fraud or embezzlement. A special type of auditing, wherein auditors do their calculations for the purpose of presenting them in court, is called forensic accounting.

      Adjusters

      Adjusters are people who work for insurance companies and analyze your insurance claim to determine how much the insurance company will pay for damages and whether your claim is fraudulent or real. Any claim large enough for a corporation to file is guaranteed to attract an adjustor inspection.

      Bookkeepers and accountants

      “Bean counters” is the phrase used to refer to this role which, although one of the most vital in Finance Land, can be just as boring as it sounds. In this role, you keep track of the movement of all money, make records, file reports, and make sure everyone on the planet knows exactly what has happened with the money you are keeping track of.

Get a degree in accounting and then pursue your CPA to become a rock star in this field.

      Modelers and scientists

      These folks take the data collected by accountants and others and run all kinds of quantitative analysis on it to turn that data into useful information. If you like math, statistics, and computer coding, this is a very lucrative field to pursue.

      Economists and consultants

      Finance is only one subdiscipline of economics. Economists, as a result, do similar work to financial analysts but on a much broader scale that encompass more than money-related items. Consultants, too, are experienced experts, either directly in the field of finance or some field that complements finance. In both cases, they provide clarity, information, and guidance necessary for the proper application of financial management. The focus on these people isn't so much about money itself, but the resources that the money represents.

      Traders

      The term trader refers to anyone who makes a living by buying and selling investments with great frequency. Unlike investors, who purchase investments with the intention of holding onto them for an extended period of time with the expectation that they’ll rise in value, traders hold onto investments just long enough for them to rise СКАЧАТЬ