A finance student studies a bachelor degree in business administration with a major in finance. The purpose of this paper is to discuss and describe the history of finance, how it affects the economy, and areas of specialization in finance. The field of finance as we know it today began in the 1950’s. When finance education started it was often part of the curriculum of economics or a part of business administration. Today the focus of the finance major is integrated as part of a business administration education. The majority of undergraduate finance degrees in the U.S. are part of a business curriculum, but at the graduate level finance is often taught based on the economic approach (Miller). One of the primary focuses of a finance education is to teach students how to make better decisions. Finance professionals are supposed to be able to maximize shareholders wealth (Besley & Brigham). The finance field is often referred to as the cousin of accounting due to the fact that a lot of the concepts and data used in finance come from accounting information. Many small companies integrate the accounting and finance departments. Two extremely important financial concepts in finance, risk and return, were first introduced to the general public by Harry Markowitz in 1952 in his publication Portfolio Selection published in the Journal of Finance. The work finance people perform in an organization is very important. For instance once the accountant completes the accounting cycle and prepares the financial statements the finance people can analyze the information to determine the financial performance of the company. The four major financial statements are the income statement, balance sheet, statement of retained earnings, and statement of cash flow. The income statement measures the profitability of a company, while the balance sheet illustrates the financial condition of a company at a specific point in time. The statement of cash flow is composed of three sections: operating, financing, and investments. The financial statements for the entire fiscal year are included within the contents of the annual report. Public companies also release quarterly financial statements to comply with the regulations of the Security and Exchange Commission (SEC). Three financial analysis the can be used to analyze the financial statements are ratio analysis, vertical analysis, and horizontal analysis. Ratio analysis is a tool that is often used by finance professionals. The five categories of ratio analysis are liquidity, solvency, profitability, activity, and coverage ratios (AccountingExplained). Horizontal analysis can be used to compare the different items or elements of the financial statements against the performance of the previous accounting period. The objective of vertical analysis is to report each amount or item in the financial statement as a percentage of another item. When performing vertical analysis on an income statement all the items of the statement are typically compared against the sales total of the company. The discipline of finance can also be used for other analytical purposes. Financial managers often have to evaluate the firm’s valuation and the valuation of other companies that the firm might invest in. A financial model to evaluate the risk of a
Due to the competitive nature of the workplace in the 21st century it is imperative for people to obtain a college education. The global recession of 2008 was so devastating that Americans are still experiencing some for of the symptoms of the recession such as a high unemployment rate…
Thus, any economy should be given a lot of attention on its improvement and towards making life easier for citizens of a country. Dynamism of the national, regional and global economy often affect people’s livelihood through different changes that affect the ability of an economy to employ people (Erdem & Glyn 73).
The financial crisis of 2007-08, not only led to the collapse of several banks and financial institutions, but turned down the stock markets in most of the countries. There are several specific reasons for the financial crisis which is discussed below in detail.
Globalization refers to the process through which national economies and cultures are integrated into an international economy so as to enhance international trade, direct foreign investment, migration, and technology sharing.
The European countries were hit hard by the subprime crisis of 2007. The origin of the financial crisis was rooted to the situation in which the mortgage loans were defaulted and the debt instruments backed by such loans failed (Mizen, 2008). As an ultimate effect of the crisis financial markets in the US were disrupted along with which the financial markets of Europe and other countries were also adversely affected.
Although the term "currency" is synonymous with "money" that is a medium of economic exchange, what would be discussed in this paper is the currency market, not the money market. The reasons for this distinction will be explained below.A currency market, like any other market, is a place where currencies are bought and sold.
Obama would use $316 billion in savings from those entitlement programs and forecasts other savings by decreasing the rate by which wealthier people can cut their taxes through certain deductions. Charging upper-income beneficiaries a higher premium for Medicare's prescription drug coverage, and increasing the amount of money drug manufacturers rebate to states for prescription drugs covered under Medicaid will comprise the proposal ("Obama 2010 budget highlights by agency," 2009).
The location, infrastructure and no income tax policy practiced by the government make it an ideal business hub and the biggest re-export center in the world. "There is no tax on personal income, while corporate taxation applies only to foreign oil firms and banks, and municipal tax is imposed on house rentals."7
Due to complex nature of various business a virtual setup is needed to be established which can make information regarding securities/ shares available to business entities and individual. Thus it can be
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