1. An Overview of Finance Chapter 1

2. Career Opportunities in Finance uFinancial markets uInvestments uManagerial finance

3. Career Opportunities in Financial Markets uFinancial institutions F Banks F Insurance companies F Savings and loans F Credit unions

4. Career Opportunities in Investments uStock brokerage firms

5. Career Opportunities in Investments uBanks

6. Career Opportunities in Investments uInvestment companies

7. Career Opportunities in Investments uInsurance companies

8. Career Opportunities in Managerial Finance uAll types of businesses uSkills used in other fields besides finance

9. History of Financial Markets uEarly 1900s - banks were full service financial organizations uCrisis of 1907 uBank failures during 1920s uGreat depression 1929 - 1933 uLegislative reform uDeregulation since 1970s

10. History of Investments uEarly 1900s investments dominated by small group of wealthy investors uIndustrialization during WWI uGrowth of investment firms by 1920s uStock market crash 1929 – 1932; market value decreased > 80%

11. History of Investments uRegulations of securities uProsperity after WWII uInflation and high interest in 1970s uIncrease in individual and institutional investors

12. History of Managerial Finance uEmergence as a separate field of study F Early 1900s F Emphasis on mergers and capitalization uWave of mergers during 1920s uBankruptcies in 1930s

13. History of Managerial Finance uLiquidity stressed during 1940s & ‘50s uAnalysis and maximizing value in late 1950s and the 1960s uInnovative risk management in 1970s

14. History of Managerial Finance uFocus on valuation continued in 1980s, analysis expanded to include: F Inflation and effects on business decisions F Deregulation of financial institutions F Increase in computer analysis and electronic information transfer F Increased importance of global markets F Innovative financial products

15. History of Managerial Finance u1990s have seen evolution continue F Continued globalization of business F Further increase in use of technology F Regulatory attitude of government

16. Importance of Managerial Finance uFinancial managers no longer merely fund the business needs uFinancial managers coordinate decisions uPeople in marketing, accounting, production, and personnel need to understand finance to do their job well

17. The Financial Manager’s Responsibilities uObtain and use funds in a way that will maximize the value of the firm F Forecasting and planning F Major investment and financing decisions F Coordination and control F Dealing with financial markets

18. End of Chapter 1 An Overview of Finance