Thursday, January 31, 2013

Why Study Finance?

For those outside Finance, it is often viewed as a necessary evil that is irrelevant to other areas of the corporation such as technology. A recent survey by CFO Publishing discusses nonfinancial risk for technology companies. These risks include items such as the ability to hire and retain quality employees, performance failure of vendors and suppliers, the breach of the company’s electronic or online data, and the failure to meet targets for business/customer growth. While you might think that such risks have no relation to Finance, there is in fact a relationship to Finance for every one of these risks. As Bob George, the CFO of the aerospace and defense components manufacturer Esterline Corporation, states “Even though we label these nonfinancial risks, ultimately they will impact the company’s balance sheet and income statement in very significant ways. The financial community must be active in those processes, even if they’re not influencing them on a day-to-day, decision-making basis.” No matter what area of a corporation you examine, every risk or opportunity has a financial impact that will ultimately affect the success or failure of a business.