Showing posts with label mba. Show all posts
Showing posts with label mba. Show all posts

Wednesday, 23 September 2015

Do You Need MBA for Finance Careers?

20:05:00
Does an MBA degree hold value in 2015?



Times have certainly changed from the 1990s when an MBA degree from prestigious universities held immense value, both in India and abroad.
Almost every graduate pursues an MBA but is it essential for a lucrative career?
Before I delve into what role MBA plays in finance, especially corporate finance, KPO, capital market and the banking sector, it is essential to understand the expectations associated with MBA, as in whether the degree aligns with your long term career graph. MBA and its program benefits vary from one school to another.

Do you NEED an MBA?

A primary way in which MBA contributes to your career is by providing practical management and leadership skills, which is a necessary trait to work and survive in any kind of organisation, whether it is banking or otherwise.
The nature of management education has changed over the last few decades.
Previously, the courses used to majorly focus on quantitative data analysis necessary in finance and its related operations.
The quantitative aspect still resides but merges with more qualitative aspects so that MBA degree holders don’t have a myopic view of an organization and expands to aspects like organisational behaviour, leadership and strategy.
Garth Saloner, the Dean of Stanford says:
“The [quantitative] skills of finance and supply chain management and accounting and so on, I think those have become more standardized in management education, have become kind of what you think of as a hygiene factor: Everyone ought to know this.”
Over the years, quantitative skills imparted during MBA training stopped short of equipping learners with adequate skills.
It was felt that as the career progressed, the learners needed to employ leadership and management skills. For instance, senior people within an organisation require different interpersonal skills.
As Saloner goes on to say “the softer skill sets, the real leadership, the ability to work with others and through others, to execute, which is still in very scarce supply.”
Coming back to our discussion, the role of MBA in corporate finance, KPO, capital market and the banking industry is varied.
Certainly, an MBA in Finance is suited to further career in various industries like investment services, commercial banking, corporate banking and real estate.
The MBA course gives learners a chance to gain both financial and business skills, equipping them to work in variety of enterprises.
Even while still in MBA school, they get chances for high paid internship opportunities and much higher salaries on completions. The MBA programs are available on both full-time and part-time basis.
The purpose of the MBA program is to offer foundation to subjects like Strategy, Economics, Leadership, Statistics and Marketing.
Certain schools offer a greater number of business-related courses in management but the majority of courses focus on banking, financial and investment topics.
If you are interested in joining any of the corporate finance, KPO, capital market and the banking market organisations, you should do MBA as it teaches risk management, stock market analysis, financial foundation, global economic growth, knowledge of financial instruments, futures and options, market trading, bankruptcy, market volatility, investment banking and corporate finance.

The Employability Factor of MBA

Does having an MBA degree give access to favorable career options? Ultimately, the purpose of the degree is to acquire employable skills.
The employability of MBA degree holders, again, is varied.
An MBA in Finance or Business doesn’t guarantee entry into the world of corporate finance, KPO, capital market and the banking industries. All the four segments hire MBA degree holders’ right at the executive level.
The employability of an MBA degree holder is very less in a KPO when compared with banking, capital market and corporate finance world.
A report by Aspiring Minds titled National Employability Report by MBAsshowed that the employability of MBAs in the KPO sector is 2.92% and 7.98% for business consulting and Analyst function.
Between these two data, an Analyst finds better employability in KPO than those interested in the business side of KPO.  This is because while Analysts may not have good spoken and written English skills, their data crunching skills are much in demand in not only in KPO but also in capital and investment markets.
Those who are involved in the business consulting role communicate with clients on a day-to-day basis, have excellent English speaking and writing skills and possess excellent quick thinking skills.
The Aspiring Minds employability report states that MBA employability varies between males and females in both business consulting and Analyst function.
One of the major employability factors for MBA candidates is English scores – employers give higher value to the person’s spoken and written English skills.
Further, there is a difference of employability between Tier I and Tier II cities; the employability curve falls drastically and the knowledge gap between Tier II and Tier III cities is too big.
As such, MBA candidates from Tier II and Tier III cities have to sweat more to find employment with MBA.
As you must be aware, the capital market and investment sectors are somewhat of an elitist, their hiring processes are gruesome, they are tremendously ‘picky’ and look for various skills and knowledge-levels and only an MBA degree won’t suffice.
The employability is higher with colleges located in metro cities because employers believe the candidates there receive higher exposure and access to better education.
It is seen that it is not the personality traits which reduce employability but domain knowledge and cognitive skills. MBA in Finance and Marketing candidates have higher employability in the KPO and Investment sector.
Talking about campus placements, top MBA colleges help candidates get hired 58% higher than the bottom MBA colleges which have an employability of only 2%.
The average campus placement is 8% and only about 30% of the colleges show campus employability higher than 8%. Further many employable candidates aren’t campus hired because recruiters don’t visit beyond top 1000 campuses and lastly, 59% of the employable candidates are given Analyst position.
Conclusion
The role and responsibilities that come with any of the finance industries vary and the purpose of MBA is to give you a foundational knowledge.
Knowledge and learning shouldn’t stop with completion of MBA; it continues and people like you should opt for advance courses more suitable to your respective finance fields.
Source- Financewalk.com

Wednesday, 8 July 2015

Analysis on Financial Model

00:19:00
When you build a financial model, there are two ways you can manage your numbers: real, and nominal. In real models, you pick a base year, and do all your calculations using constant real dollars, rupiah or whatever currency you’re working in. In nominal models, you need to adjust all of your numbers by the relevant inflation figure.
Whether you use real or nominal is largely a matter of personal taste. They are (or, at least, should be) mathematically equivalent. It’s more a matter of presentation. I have always been a bit of a nominal model man. The first professional model I ever took over from someone was a nominal model, and I guess that shaped how I think about these things, but, at least theoretically, I don’t mind much which flavour you want to use.
I said “at least theoretically”, because in practice, I have had lots of problems with real models. In fact, a significant number of the real models I have come across in my professional career have had the same glaring mistake. Take a look at the simple models below and see if you can see what it was.
Let’s imagine you work for the government and your boss wants you to analyse an infrastructure project to find out how much a private party will charge users to provide the service.
The project will operate at full capacity for a 10-year period providing a service for which it charges a tariff and incurs operating expenses that both increase with inflation. The business is pretty capex heavy and the capex is all incurred in the first year of operations, then depreciated on a straight-line basis over the 10 year operating period. You’ve got some cost estimates, and a pretty good idea of what the weighted-average cost of capital is for businesses in this industry, so you put all the costs in and run a goalseek to get your full-cost-recovery tariff.
First you make a real model (but unknowingly, make a mistake in its design). See below:
Then you make a nominal model to check your work (which doesn’t have the equivalent mistake). All you need to do is adjust the WACC, your revenues and your opex by inflation; everything else flows on from those.
You are alarmed to see that your full-cost recovery tariff is different between the two models that should be mathematically equivalent. What have you done wrong?
Have you found the mistake? Last chance…
The mistake is in the depreciation. In the real model (and in a significant proportion of real models I have seen in the real world) depreciation has been assumed to be constant. In fact, straight-line depreciation is constant in nominal terms, and decreases in real terms. The 50 units of your year 1 capex that you depreciate in year 10 is worth a lot less in real terms than the 50 units of the capex that you depreciate in year 10. This doesn’t affect your pre-tax cashflows, but, if you keep the depreciation constant, the tax shield impact of your depreciation is overstated.
You can also learn Financial Modeling Online.
Here’s the real model with deflated depreciation that results in the correct full-cost-recovery tariff.
This effect of this mistake is not always very large, it’s only so large here because I used an example that was particularly capex heavy, but it can have a significant impact on decision-making in businesses like infrastructure where profit margins are very slim.
People think that in a real model, they don’t need to assume inflation. This is true if it’s a pre-tax model, but in a post-tax, or vanilla model, you still need to assume an inflation rate to calculate your depreciation correctly (and amortisation, etc.). So, I said earlier that it was largely a matter of taste what sort of model you make. That’s true, but if you’re building a real model, which is anything other than pre-tax, I might question your taste… Having to assume an inflation rate for a real model, to me, should make you question why you are using a real model in the first place.
So, now you know. Next time you see a real model, have a look at the depreciation, and let me know if you find the same mistake. The ones I have found have been made by very successful, multi-billion dollar companies, so the people making these mistakes aren’t in bad company, at least…
Note: Feel free to have a look or even download the source spreadsheets if you want to see my working by clicking the links above.
John Cheong-Holdaway
is an independent financial and economic advisor, who mainly works in infrastructure and other fields where public and private sectors interface. He is currently policy adviser to the Indonesian government under the Australia Indonesia Partnership for Economic Governance. To find out more about John, visit his LinkedIn page. For more articles by John on infrastructure, finance, economics, and advisory generally, visit his blog:Nusantara Economics.

Saturday, 16 May 2015

5 Hot Jobs for MBA Grads

21:55:00
As the world becomes more connected via the Internet and other telecommunication devices, there is a literal plethora of business ideas that you can come up with.

Perhaps you could even create the next billion-dollar application or social network.

Industry insiders and business analysts say that one of the smartest degrees you can get in the second decade of the 21st century is an MBA.

An MBA is a master’s in business administration and will allow you to apply for higher paying, top level positions, like regional manager or even CEO.

Best of all, it doesn’t even take that long to get your MBA. You can even get your online executive MBA in less than 2 years. Here are 5 hot jobs for MBA grads.

1. Investment banker. With your MBA you will essentially have a college degree in making money. That is what investment banking is all about – you take your own money, or your clients money, and you double it, triple it, and so on. You can work at a hedge fund, invest your own capital or you can become a venture capitalist. A VC, or venture capitalist, will meet with business owners to see if investing in their business will make a serious return or not – in some cases it could make you rich. You can read here on GetSarkariNaukri, why Investment banking as career is one of the top career options.

2. Financial analyst. As a financial analyst you will be working with people to come up with fiscal game plans as to where to put their nest egg. Many of the clients you will be working for will be wealthy with incredibly large nest eggs or you might work for your local bank branch to advise middle class families on how to save their money, send their kids to college or buy a house. A financial analyst must always have their finger on the economic pulse.

3. Consultant. Many of the cream-of-the-crop consulting jobs could have salaries in the millions of dollars. As a consultant you might work with one company or a number of corporations on a contractual basis to help cut the fat and increase profit margins. As a consultant it will be your word that a CEO of a company will go on and your word could either make or break a particular business. If you are talented and start to make a lot of companies money, you could be very in demand and could make even more money than you ever dreamed of.

4. Start your own business. If you have an MBA you have a huge head start to become an incredibly successful entrepreneur. Industries like education technology and social media applications for smart phones and tablets are a great place to invest both your time and money. All you have to do is find a niche and apply your unique talents.

5. Chief executive officer. This is by far one of the hottest jobs for MBA grads because it is both the highest paying and has the most power. As the CEO of the company you will have the power to make executive decisions on everything. As a CEO you will be at the help of the ship to steer a company to riches or disaster – hopefully it’s the former.

Author Bio:

Pritam Nagrale is SEO trainer; He is having excellent knowledge of SEO, Digital marketing and blogging. He writes on variety of topics based on interview, career, jobs and employment etc. You can get career tips from his blog Surejob.in

Tuesday, 7 April 2015

What difference, can an MBA make in your life?

11:24:00
This is a pertinent question, one that comes to mind, while weighing in the pros and cons of acquiring an MBA degree. And if you have wondered about this as well, then let’s explore and find you some answers. First off, there’s the usual and guaranteed monetary benefit, but there’s more to it than a pay hike and a fancy job title.   The MBA programmes are rigorous and exhaustive, aimed at giving an insight into the world of business - equipping students with the knowledge and skill required to function in a workplace. Sharing their MBA experience, most MBA grads state that one thing that they gain from their MBA programmes is a sharpening of their ability to think strategically. In the two-year course duration, students work on several projects, presentations and assignments that provide them ample opportunity to collaborate with peers – encouraging team work. Both these qualities – strategic thinking and teamwork - are highly sought after by employers. However, what you learn at a B-school isn’t just related to the business world, these are skills can work outside of the office set-up.

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Out-of-the-box thinking isn’t just a mantra applied at the workplace, in fact, students are encouraged to explore their ‘entrepreneurial’ side. And it is an ideal course for those who have business ideas, but no business background as the course provides business know-how that is required to manage and or run any business successfully. In that sense, it gives flight to people’s dreams of becoming entrepreneurs.   And even if one doesn’t intend to set their own business up, the course helps them become better managers. While managing people is one role among the many that makes someone a good manager. The MBA programme helps give you a business perspective, whether it is about participating in business planning or developing as well as managing product research or analysing current marketing trends. Now a days, Distance MBA Courses are also in vogue. And they also offer the option of studying at the comfort of your home   The many projects, presentations and assignments allow students to practice, develop and polish their communication skills, a vital aspect for another looking to manage teams.    And studies point out that while some companies (read startups) prefer MBA grads with couple of years work experience, larger organisations opt for fresh MBA grads. This means that both – working professionals as well as fresher’s have a level playing field.   With Universities like Pondicherry University are taking their professional MBA online courses, one can pursue an MBA course without having to take time off from full-time work.      An MBA degree enriches your life in more ways than one while there are obvious benefits (as discussed above) one that cannot be ignored is the fact that these courses attract the brightest minds across industries, regions. And when you choose to enrol in an MBA, you become part of the community that is forever pushing the envelope to make business more appealing, successful and profitable. As a management student you get to form a bond with peers, mentors and faculty that transcend the campus or course. It’s a start to a lifelong association that holds a lot of promise.

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