Page 495 - Introduction to Business

CHAPTER 13 Financial Management of the Firm and Investment Management 469

Careers in Financial and Investment
Management

Financial and investment managers are responsible for collecting, analyzing,
and reporting financial information within their organizations. They are involved
in capital budgeting, financing, and investment decisions. Business, economics,
and mathematics courses are most useful in terms of educational training. All
large organizations in both private and government sectors of the economy hire
financial or investment managers in various roles. Small- and medium-sized
firms will utilize fewer finance professionals than large firms, but it is still common
for them to hire individuals in selected finance roles. Some people seek self-
employment in financial services. Examples of self-employment options are finan-
cial and investment consultants, stockbrokers, insurance brokers, and property
consultants.
Exhibit 13.1 listed the primary roles of financial managers in business
organizations.

• Treasurers and finance officers oversee financial goals and budgets, including
capital budgeting decisions, financing decisions, cash management, and
mergers and acquisitions.
• Controllers are responsible for preparing financial reports, such as income
statement and balance sheet information, cash flow analyses, and pro forma
or future revenues and expenses. They often participate in accounting, audit,
and budget activities within the organization.
• Cash managers put together details of the cash movements within the organi-
zation. Cash collections and disbursements are monitored and projected to
anticipate cash problems. Recommendations for capital budgeting and
financing decisions may be offered.
• Credit managers are involved in all credit decisions, such as raising funds
using bank loans and debt issues, evaluating the credit risk of bonds and firms,
and monitoring past-due accounts receivables.
According to the U.S. Department of Labor (http://stats.bls.gov/oco/ocos010.
htm), the average earnings of selected financial managers in 2002 were vice presi-
dent of finance, $183,500; treasurer, $150,600; assistant vice president–finance
$141,300; controller or comptroller, $134,300; director, $130,600; assistant treasurer,
$111,900; assistant controller or comptroller, $115,500; manager, $84,500; and cash
manager, $64,700.
Financial institutions also hire financial and investment managers in various
areas, including lending, mortgages, trusts, operations, electronic financial serv-
ices, and investments. Government financial managers must be knowledgeable
about government regulations and budgeting procedures. Also, health care finan-
cial managers must understand specific aspects of health care insurance and rele-
vant government regulations. According to 2003 data collected by the U.S. Depart-
ment of Labor (http://www.bls.gov/bls/blswage.htm), average incomes in
industries employing the largest numbers of financial and investment managers
were financial managers ($130,230); accountants and auditors ($60,600); bank loan
officers ($55,210); personal financial advisors ($66,740); and network and computer
systems administrators ($55,970). Of course, these are average figures, and ranges
of salaries and wages can vary considerably depending on firm size and individual
responsibilities.

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