Corporate Finance is a field of finance that deals with the financial decisions business organizations make and the techniques and analysis applied to make these decisions. The principal objective of corporate finance is to make best use of shareholders’ worth, while administering the organization’s financial risks. Corporate finance and managerial finance are closely related disciplines, the latter typically deals with financial decisions specific to managerial roles, while a course in Corporate Finance looks into the financing and investment decisions of large businesses.
This class is usually structured for easier learning into the following sub-topics: investment, dividends, financing policies, and how all of these factors influence a business’ value. Student’s are shown the tools essential for investigating and making these kinds of financial decisions. Particularly interesting topics most Corporate Finance classes discuss are comprise dividend policy, capital-structure decisions, valuation, and capital budgeting. This disciplines might be categorized into long-term and short-term decisions and techniques. Capital investment decisions are long-term investments and typically involve business projects in development receiving funding; on the other hand, short term decisions refer to the short-term balance of existing assets and existing liabilities.
The most important, overall objective students should learn in a Corporate Finance course is how to increase the monetary value in any company through effective decision making. Corporate finance students are no strangers to issues like financial risk management, international finance, capital structure, dividend policy, sources of corporate funding, corporate investment, corporate contingent claims, capital budgeting, etc. Accounting and economic majors may want to consider a career in corporate finance.
One of the most challenging parts of working for enterprise-level businesses is the sheer scale of finances needed to be dealt with and managed on a daily basis. Therefore, anyone potentially interested in taking a corporate finance class should be aware that the field is not to be taken lightly. The person or team responsible for the financial accounting decisions of a corporation is in many ways responsible for how well a company does monetarily every quarter.
(The following Corporate Finance textbooks are widely known and used by accounting students all over the world: Annual Reports 101 by Michael Thomsett; Applied Corporate Finance by Aswath Damodaran; Damodaran on Valuation by Aswath Damodaran; Expert systems by Michel Klein; Financial Management by Eugene F. Brigham; Fundamentals of Corporate Finance Standard Edition by Stephen Ross; Global Edge by Joel Kurtzman; Investment Under Uncertainty by Avinash Dixit; Investment Valuation by Aswath Damodaran; Knowledge-based Decision Support Systems by Michel Klein; Knowledge-based Systems for Financial Executives by Carl Fink; Neural Networks in Finance by Paul D. McNelis, Strategic Risk Taking by Aswath Damodaran and more.
Related Resources
Corporate Finance textbooks can be quite expensive. We have found many free textbooks about Corporate Finance and related business and economic topics. You can find our list of these textbooks by clicking here.
In addition, Corporate Finance courses and lectures can be found online. Visit our Method 3 page for links to college/universities and other helpful websites that offer free online classes, so you can learn Corporate Finance from your home!