CFA – Recognition and Standard

Certifications and professional designations have a value to the organization and the individual only if they are recognized or explainable in terms of the standards they uphold. In other words, both individual and organization look for designations that can be used to market, lend credibility, and explain standards, education and experience. Many organizations have internal certification or designation programs and these are a great way to get associates involved and retain them. But what does an internal certification actually prove? Everyone inside the organization knows what the certification means, what the person had to do to get it, and what standards he or she was held to. But outside of that organization, what value is the certification to shareholders, customers, or other organizations? The CFA designation is well known throughout the world, and because of its structure, gives your organization and each individual the recognition and standard they deserve. Let’s find out how.

First, The Economist ranked the CFA designation as the “gold standard” in investment analysis designations and certifications. This is a weighty accolade and certainly puts the individual and the organization at a higher level. But what other recognition and standard exists to place the CFA at the “gold standard” level? There are several areas, including worldwide regulatory recognition, community recognition, standards related to the curriculum, and types of companies that look for CFA charterholders.

Regulatory recognition is important in worldwide financial circles, especially if holders of a designation plan to work in   global   markets  or in countries other than their own. CFA charterholders reside in just about every country around the world, according to the CFA Institute. This is just one piece of the recognition puzzle. Several countries’ regulatory bodies have waived some licensing and examination requirements for candidates who have passed Levels I or II or have already obtained their CFA designation. This means that these charterholders are licensed to practice in multiple areas, such as Australia, the U.S., four provinces in Canada, Greece, Hong Kong, Singapore, and Turkey. If your organization is involved in investment operations in these areas, your CFA charterholders can practice without further licensing or examination. The fact that the regulatory authorities of these countries have extended recognition of the CFA designation provides a high standard of authority.

The community within which an organization operates is also an important source of recognition and standards. For example, the National Council for Interior Design Qualification is a recognized standard within that industry, but is most likely meaningless outside of it. But keep in mind that the financial industry in general is loaded with certifications and degrees such as MBA’s, Certified Public Accountants, and Certified Investment Management Analysts, to name only a few. So when it comes to choosing a designation, it all depends on what kind of work the person does, what kinds of organizations will hire him or her, and what kind of network exists. CFA charterholders are involved in investment, financial analysis, and corporate financial planning in large and small companies everywhere. These CFA’s are located in commercial banks, investment banks, consulting firms, insurance companies, financial research foundations, and mutual fund companies, so the range of the network is wide. Since various types of organizations hire CFA’s, this recognition and standard is also important at both the group and individual levels. The CFA network is over 100,000 strong in countries around the world. This is a large network, but when you consider that the focus areas of CFA’s are fairly narrow, the network becomes and even better organizational and individual tool.

We’ve discussed the nuts and bolts of the CFA curriculum and content previously. But how does this have an effect on the recognition and standards that come with the CFA designation? The fact that the curriculum is updated annually and is completely overhauled every five years after heavy industry analysis creates a standard for both inside and outside the organization. This curriculum development process keeps the organization from having to “push” the recognition on an educational level, because marketing a changing, dynamic curriculum is easy. But the changes to the curriculum also indicate that any CFA charterholder will have current knowledge about the  global  financial  markets . On top of this, the tri-level examination structure ensures that each person has knowledge, comprehends that knowledge, can apply it, and can go on to synthesize it as part of his or her every day activities.

Looking closer at the curriculum structure, the CFA Institute provides a learning experience that is broad-based, and, as we’ve discussed, covers a wide variety of topics. The experience uses professional journals and practitioner information as part of the curriculum. This type of learning should also serve to add to the recognition and standards defined by the CFA program.

If your organization’s jobs fit the CFA standards, you may want to consider looking for candidates with the CFA designation – or putting your existing associates through the program. As you can see, the recognition and standards set forth by the CFA program can benefit both the organization and the individual.

Next, we will look at competencies covered, both implied and expressed, in the CFA program.

Forex Trading and Finance

The forex trading or foreign currency exchange market is a non-stop cash market where currencies of different nations are traded, usually through a broker. The currencies are traded in global as well as local markets and the investment value of the traders increase or decrease depending on the way the traded currency is moving in the market. The currency movements are due to various factors including real time developments in the world financial sectors.

Traditionally, central and commercial banks and major financial institutions and hedge funds managers were the principle participatory in the foreign exchange trading market. However, the trading scene has undergone dramatic changes over the last few years as technology has enabled any one with a computer and internet connectivity to trade in forex.

Due to its popularity and potential for tremendous returns, many traders have entered the foreign exchange market. The volume of trading as well as the number of traders has grown exponentially over the past few years. There are many reasons why traders prefer investing in a forex market as compared to equities or commodity market.

The forex market is open for business round the clock. Traders have access to global forex dealers at any time of the day or night on all days of the week. It is enormously liquid and is the biggest market in the world in terms of volumes of business transacted. The daily turnover is estimated at 2.5 trillion dollars. The forex market offers opportunities for huge profits as the currency value fluctuates owing to the inter-dependence of the world currencies on events taking place across the globe.

Another reason for the preference of traders for forex markets is that there is less exposure to risks as there are inherent standard tools to take care of them. Profits can be made in a rising as well as a falling market. The traders have many options available with them to indulge in zero commission trading.

The premise on which the forex market works is that the investor trades in currencies that they believe will rise in a particular period of time, in comparison to the currency that they are selling. If that happens, they must sell the other currency to lock in their profits. However, it is believed that almost 80 percent of the currency trading market is speculative. The other portion of trading comes from hedging, which involves managing business exposures to various currencies.

Business Globalization

Globalization is the ever-increasing process of integration of local and regional markets into one unitary market of products, services and capital. The main results of this process have been an increase in the interdependence of traditionally national markets on the macroeconomic level and the internationalization of corporate processes, especially production, distribution, and marketing, as well as the adoption of international business strategies on the microeconomic level.

Economists recognize the early signs of globalization in historical phenomena, such as the increased economic activity in the Age of Discovery in the 16th and 17th centuries, which led to the founding of the British and Dutch east India companies; and the new economic opportunities enabled by the scientific discoveriesof the 18th and 19th centuries, followed by the 20th century’s breaking ground on the Information Age. The World Bank identifies three waves of globalization, which happened between 1870 and the 21st century. The origins of the process are attributed to the falling costs of transport and the lowering of the politically-driven trade barriers. Trade in commodities developed into trade in manufactured goods. Initially land intensive production became labor intensive. Mass migrations for work became an everyday phenomenon, traveling becoming easier with the development of the more advanced transport technologies. The telegraph allowed more distant countries to benefit from the capital available on the stock exchanges, as stock exchange institutions were brought to new locations, contributing to the growth of financial markets. Two world wars blocked international trade as individual countries turned protectionist. The situation persisted up till the 1980s, by which time the international exchange between the developed countries was largely freed from the barriers, leaving the developing world outside of the free trade market. It was during the second phase of globalization, when the countries started to specialize in production and the businesses started to function around agglomerations and clusters, that economies of scale started to matter. A discussion on the wealth inequality and the rising poverty in the developing countries started, resulting in the postulates to allow all the nations to participate in the benefit of a free trade. Interestingly enough, the inequalities of the early globalization era in the 19th century were largely related to the ownership of the land, crucial both for the commodity trade and for the manufactures. However, the inequalities during the second phase of globalization showed a more systemic nature, being driven by the protectionist policies of the developed world. The third wave of globalization brings the “death of distance” in a traditional geographical sense. It does not matter any more whether the whole business process is situated at the same location, as the service and non-core functions, thanks to communication technologies, can be successfully performed even on different continents. The third wave of globalization created off-shoring locations in central and eastern Europe and the new, previously developing, economic empires of India and China. Although some of the former developing countries broke their way to the free market and compete successfully for the investments, others remained marginalized and are becoming even more excluded from the benefits of the world economic growth, than ever before. One of the most striking examples of poverty levels and inequality are in the region of sub-Saharan Africa.

The relationship between economic, social, political and cultural aspects of globalization is visible in the main determinants of globalization, which can be attributed to various spheres of human activity. They include but are not limited to digitization, which enables easy distribution of data, information and knowledge paired with a parallel advancement and accessibility of communication channels, especially the Internet; development and internationalization of mass media, which creates certain convergence of consumer patterns (e.g., mass accessibility of TV such as MTV makes the icons of contemporary pop culture such as McDonald’s or Barbie the symbols of capitalist world, which developing societies demand, aspiring to the Western style of life; moreover increasing capital consolidation in the sector of media enables the formation of media empires, like Rupert Murdoch’s, which allow a relatively small group of opinion-makers to influence whole societies); increasing cross-border and overseas migration trends, caused by people’s urge to improve their lives and economic standing; longing for freedom in those countries, which suffer internal oppression either from the ruling class or from any other form of political or economic regime; this enables the democratization political systems and in consequence the introduction of economic liberalization and popularization of the free market philosophy (e.g., the spectacular transformation of central and eastern Europe countries from centrally planned economies to the free   market ); advancing skills of  global  management allowing entrepreneurs to operate in the wider geographical scale (a new category of companies, called transnational corporations, is both a consequence of globalization processes and a response to increasingly tighter competition, stimulating global dispersion of corporate influence, management methods, production patterns and technologies); convergence of various economic orders toward a free market and liberal economy and, in consequence, a creation of the unified economic model-the only acceptable economic philosophy; technological advancement and dynamics of innovations with their net effects such as a quicker use up of limited Earth resources; this in consequence creates new organizational behavior patterns (i.e., business sustainability, where business models are created on the basis of energy savings and social responsibility); new rules of international labor division and, in consequence, creation of geographical competence centers (e.g., information technology [IT] services in India); centralization of purchasing by  global  clients and the economy of scale, which is a direct motivation for  global  expansion (unit production costs are significantly decreasing with a growing share of B&R,  marketing  and promotion costs in a total cost of production); standardization of production and services being a consequence of adopting certain strategies on the  global   market  (a classical example of such standardization is presented by the quality measurement norms-series ISO-certified by independent bodies such as TUV; getting a certificate, which is determined by adopting standard procedures in the organization, often determines whether the company can obtain good contracts as the big companies with large international networks of suppliers and distributors often select partners for co-operation on the basis of quality certificates possessed); less restrictive trade tariffs; strategies adopted by transnational corporations, which aim at gaining more competitiveness on a wider market and which change the rules of labor division as well as internationalization of production process as a result of the complex network of relations between corporate branches in many countries.

Among the strategic decisions of enterprises, two have significant gravity in terms of their ability to force further globalization. First, mergers and acquisitions that contribute to enlargement of organizations per se. Second, off-shoring, or locating some business functions and processes in countries that offer cost reductions without compromising on the quality of the service. Enterprises forced to compete in a tighter and more challenging market seek strategic assets, which are often purchased through takeovers of other companies or through various forms of mergers. Increased mergers and acquisitions activity can be characterized not only by an increased volume of transactions, but also by its significant dynamics (measured by scale of change as compared to the previous year). It is one of the main stimulators of globalization and a response to more demanding and challenging conditions for competition (companies are looking for foreign  markets , which are often less saturated than those of the enterprises’ origin, however, as foreign  markets  accept more players and in due course become a  global   market , entrepreneurs must compete through taking over the strategic assets). In 2006 the value of assets acquired by purchase or through takeovers reached $88.5 billion globally in almost 7,000 transactions. Off-shoring (or near-shoring in the case of locating operations in the countries in a close proximity to the home country) is a strategic trend stimulating foreign direct investments. Enterprises are largely driven by a paradigm of cost reductions these days. They can achieve it by locating their service functions and non-core activities in the countries that offer significantly lower labor costs and a decent level of skills at the same time. Key criteria used in making such decisions are: local economic and political stability, infrastructure, labor market and the level of education, language attainment, and the real estate market. A typical off-shored operation includes call centers and shared services centers, hosting mostly the IT, administration and accounting functions. As such investments bring many new jobs, they contribute to the growth of local economies.

The most competitive locations, in terms of labor costs and overall investment climate, attract great numbers of investments and as the local market saturates, wages start to increase in a natural way- stimulated by the demand-supply situation. At the same time, local governments tend to encourage the investments i the more complex and sophisticated processes to benefit from a transfer of knowledge and perhaps technologies as well. More sophisticated jobs require higher wages and as the local markets develop toward maturity, as the hosts for off-shoring operations, enterprises move on to the new, less-saturated locations, where they can benefit from the lower costs again. This specific form of colonization is also a part of the globalization loop, where transnational corporations are the reason and the result of the process at the same time. Last but not least, a change in the very nature of competition remains to be mentioned as a key driver of globalization. Geographic regions compete for resources, for example for the capital and external  financing  opportunities on the  global   market . Together with liberalization of capital transfers, new opportunities for obtaining external financing for the projects became available. Companies do not need to apply to banks anymore; they can raise the capital directly on the market, for example through the emission of stock. This phenomena changed the core role of the banks as the sole capital providers. Banking institutions now need to diversify their activity in order to stay competitive. Regions also compete for the investments, specifically foreign direct investments (FDIs), which bring new technologies and jobs. Globalization should be analyzed in the macroeconomic context-as an aggregated phenomena taking place in the global scale, and in its microeconomic context-at the level of individual enterprises, adopting certain development strategies and making strategic decisions (e.g., locating elements of a value chain in the countries with local advantages or centralizing them in one location). Economic globalization stimulates a significant institutional evolution. Global institutions are set up to manage certain aspects of activity in the global marketplace. They are equipped with both political and economic tools to control and influence the  global   market  players. The most important include the World Bank, International Monetary Fund, and World Trade Organization.

Global Financial Statements

The growth of international business has continued to change the landscape of the accounting field. There is a growing need for a consistent accounting standard to be set for our global economy. The Securities and Exchange Commission continues to permit publicly traded companies to submit their financial statements in accordance with the Generally Accepted Accounting Principles (GAAP). The International Financial Reporting Standards (IFRS) are the accounting standards used by many companies whom the United States currently does business with. Financial statements are prepared in accordance with IFRS in over 100 countries.

Financial statements are designed to provide useful information for the stakeholders of a company. A company can make their financial position more preferable by manipulating their financial statements. The United States Securities and Exchange Commission is the government agency responsible for regulating the stock market. Their work is to protect the integrity of personal investments made by American public. They designated the Financial Accounting Standards Board to maintain the GAAP.

Individuals have the opportunity to invest their finances into a company with a reasonable expectation of return on their investment. A company has an equal opportunity to make an investment in another company through stocks and bonds. A company can continue to acquire more ownership of another entity up until a point before they have become the majority owner. Majority ownership does not necessarily mean a company owns over half of an entity’s outstanding stock. A company can be considered a majority owner once they have enough voting power to influence the decisions made by the smaller entity. The accounting for this scenario is handled differently by the aforementioned standards.

In accordance with IFRS, all subsidiaries are to be consolidated without exception. “An investor ‘controls’ an investee if it is exposed to (has rights to) variable returns from its involvement with the investee, and has the ability to affect those returns through its power over the investee” (Muntor & Santoro). The IASB has left little room for interpretation when it comes to consolidations. FASB takes into consideration the amount of financial interest that is controlled. Generally, a company needs over fifty percent of outstanding voting shares and the majority voting interest. At this point, a company needs to consolidate their financial statements. This can provide the users of the financial statements to have the most useful information available to them.

Consolidated financial statements of companies with foreign operations create an additional challenge for the users of financial statements. It would be very difficult to understand the foreign affairs of a company without an understanding of the foreign currency. The IASB and the FASB have both established the necessary guidelines for foreign currency translation. The two organizations have similar standards on how to handle the currency issue.

The United States acknowledges the need for a global accounting standard that is common for all businesses to follow. The SEC has issues with some of the guidelines set by IFRS. It would be nice to have a consistent standard to follow that would provide more continuity for all financial statement users.

Marketing Made Easy, Your Financial Future

As the economy worsens, people are becoming increasingly concerned about their financial future and about money in general. Everything that people have been taught or have learned about investing in particular and sound financial management in general no longer seems relevant in light of the global financial meltdown. Even real estate, which many people have long believed to be an ironclad investment strategy, has suffered tremendously as a result of the mortgage market fiasco and declining property values.

People are also worried about their jobs. Unemployment is at a 14 year high and hundreds of thousands of people will lose their jobs each month for the foreseeable future. It is a time of stress and financial strain for people all over the world seeking security and financial stability.

But not everybody is suffering equally. Online entrepreneurs involved in Internet marketing are enjoying booming sales and will continue to do so. Internet marketing is a recession proof business that can yield very lucrative levels of income and long-term financial security. The trick is in finding a network marketing opportunity that is legitimate, proven, tested, and that will meet your personal needs.

Finding such opportunity is not as hard as it may sound. There are many Internet marketing companies today that offer turnkey solutions that enable an inexperienced but motivated entrepreneur to get started in the business quickly and easily. With a minimal commitment of time and money, virtually anybody can start a lucrative work from home Internet marketing business.

Of course your success depends on what product or service you are selling. Step one is to find a market that is hungry for what it is you have to offer. Today, people the world over are seeking financial information that can help them cope with the global recession. Being able to offer financial education products to this vast market is a virtual guarantee of success.

Even if you have no experience in marketing or sales, it is still possible to launch a successful marketing business. Look for a turnkey solution-a business in a box-that can help you ramp up and begin selling immediately. The object is to outsource the mundane tasks of lead generation allowing you to focus on building relationships and closing sales.

The truth of the matter is that the future is entirely yours. If you sit back and react to events around you have no control over what the future will bring. Alternatively, if you decide what your future should be and start taking action today to make it happen, you are entirely in control.

How Effective can Financial Performance Analysis be?

With heightened competition, market concentration and regulation, British Telecom (BT) has employed a number of tactics to maintain profitability, market share and overall financial performance. As leaders of info-communications and worldwide ventures, BT have been contracting part of their operations, services and transferring responsibility to specialist branches, thereby achieving economic efficiency.

Manoj Kumar, a supply chain consultant claimed, “Most of the outsourcing that’s happening has been triggered by cost, and if you want to minimize cost, it’s mainly going offshore” ( For example, in India the IT workforce is estimated to rise to 2.2 million worker by 2008 from a mere 280,000 today (McKinsey Report, Ethicalcorp Magazine, BT have been fortunate to benefit from economies of scale in terms of purchasing, financial, marketing, technical and managerial improvements.

Reducing costs simultaneously reduce risks helping to free financial resources. Instead of tying up resources in non-core areas they can be contracted at operational expenses. Contracting part of BTs services has been a viable choice rather than building functions from scratch. In doing so, BT have increased their customer base and re-attracted customers who left in the first place due to inherent inefficiencies. BT have benefited from 25% increase in its most recent financial quarter (

Likewise, many banking services from Barclays to HSBC as well as I.T. companies including Microsoft have followed the same suit indicating a rising market trend. In 2005, BT derived 91% of its revenue in the UK by providing communication solutions for homes and business helped by rising demand for broadband internet services. Financial statistics reveal: profits up by 32% in 2005 – a clear indication of improved market performance. In the   Global   market  BT have experienced immense growth and promises to continue ‘develop[ing) our acquisition strategy, invest in our people, our skills and our  global  capabilities and unlock the value of our acquisitions and partnerships’. BT remains one of the market leaders in telecommunications. It started its journey as a state-owned enterprise. Following its privatisation in the 1990s shows a gradual shift in restructuring operations and management in achieving economic efficiency thereby improving financial profitability and performance with an entrepreneurial flair. It seems that BT have found their ground transforming its unstable performance to an innovative and booming market performer.


BT’s quarterly newsletter for industry analysts, Issue 4, June 2006

McKinsey Report Ethicalcorp Magazine,

Papers For You (2006) ” P/F/461. Operating and Financial Review”, Available from [22/06/2006]

Papers For You (2006) “P/F/455. Report on business and financial performance of BT”, Available from [21/06/2006]



Market Relief After Tough Week

The Energy heavy FTSE trudged behind its European peers and US markets, as oil stocks took a back seat, and domestic inflation fears dampened the buyers enthusiasm. Rumours hit the newswires that UK inflation will be double the expected rate. This news will make it easy for the BOE to make the decision to raise interest rates at the next central bank meeting. This is yet another piece of negative news for the FTSE, which has spent most of the year in the red. The CPI number released next week could add further negative pressure on the UK benchmark index.

Underwriters of the HBOS rights issue breathed a huge sigh of relief as the bank rose above the discount level, which would have caused them to step in and take up the issue at a bad price. The UK banking stocks finished down on the week, but managed to close significantly above the lows as bargain hunters entered the market. At one stage Barclays dipped below £3.00 a share for the first time in a decade before closing the week at 3.23Euros.

Oil dropped slightly at the end of the week as comments from Saudi Arabia reassured investors that supply would be increased. However, this pullback has to be put into the perspective of the rapid price advance over the last few weeks. Just a few weeks ago $133 a barrel would have set headlines blazing; now it is a welcome pullback, with oil still well within the $130 to $139 trading range of the last few days.

On the currency markets, the Euro finished the week well down against the Pound and the Dollar. Sellers were out in force after Irish voters rejected the EU reform treaty by a narrow margin. The Lisbon treaty has to be ratified by every country before coming into effect. Every other country elected to allow their national governments to ratify the treaty, but Irelands democratic vote has thrown the treaty and potentially further EU integration into disarray. With increasing divisions within the Eurozone over rates policy, the single currencies detractors were out in force.

Next week starts off with some heavy data on both sides of the Atlantic, but ends on a quiet note with little data released on Friday. Monday sees the release of Core EU CPI, which could impact on the Euros recent declines. Around midday the US release of TIC net long term transactions will also impact on global currency markets. Tuesday sees the release of a raft of upper and middle tier US data. Top of the list is the Housing Starts and PPI data. On Wednesday we have the release of the minutes from the last MPC meeting. Considering recent developments, these minutes may be slightly obsolete, but will still be scoured for hints of future policy directions. Thursday brings UK retail sales and US unemployment claims.

Although markets ended the week on a positive note, European indices still ended well down. US inflation is still sky high. Everything from hospital services to education is costing more. To make matters worse, recent US home foreclosure data has indicated that one in every 483 US households experienced a foreclosure filing during the Month of May. In some parts of California, this figure stands at an incredible 1 in 66 houses. ECB president Trichet recently commented that much depends on the trajectory of the US housing market. If he is correct then the feared global depression may be more real than people are prepared to believe.

The FTSEs high from last year was 6754; roughly 200 points shy of its peak in 1999. It could be argued that it will be a long time before these levels are seen again. According to traders, a No Touch bet on the FTSE to not to touch 6800 at any time during the next 6 months (180 days) could yield a return of 18%. is the world’s leading Fixed Odds Financial Trading website. Fully licensed and regulated globally, handles around 18,000 trades a day, from over 130,000 registered clients. Over 15 million trades have been processed since inception in 2000. The multi-award winning allows traders to speculate on the movement of the worlds’ major financial markets, up down or sideways without actually owning the market, stock or currency you are buying.

Startup Financing For Small Businesses

Startup financing for small business is necessary and hard to acquire.  Financing the startup of a business is a particular challenge during tough economic times, as small business startups need money when money for starting up is hard to find.  During these challenging economic times, it is difficult to obtain startup financing from traditional business financing sources; particularly for small businesses, which are considered a high risk for business failure.

However, fueled by a growing unemployment issue (caused by shrinking businesses and lay-offs), individuals are following their dreams and opening a small business.  If their business idea is perceived to be very strong and if they have a unique product or service with a good strategic plan, they might be able to get traditional business start up loans. If there is a perception of risk, those entrepreneurs need to find an alternative method of raising startup funds.

Traditional business financing includes commercial lending organizations, banks and government financial programs. These organizations provide loan products, operating lines of credit, equipment leasing and asset financing, and more. But, due to current global financial market conditions, it can be challenging to qualify for this startup financing (lending criteria has tightened as most traditional lending institutions want a high level of security and low risk) and it can also be challenging to get cash-strapped lending institutions to disperse business start up loans, asset financing, or operating funds promised.

One alternative to traditional financing is to see if you can interest an Angel investor in providing an investment in your business.  Angel investors typically charge higher interest rates and are in for a short term period; they want an exit strategy within a specified period of time (therefore they will want their money back, with interest, quickly). Angel investors are often interested in the high tech or biotech industries; or other high reward (and also high risk) industries.  To attract Angel investors, your business needs to have strong and fast growth potential, a talented management team, a compelling business plan, and well priced equity. Angel investors usually look for up to 50 percent equity in the business; this is really dependent on the business proposal and the investment amount.  You typically give up some control when you develop a relationship with an angel investor.

Another alternative is to find a strategic partner or to build a strategic alliance that allows your business to reduce its cash and/or startup financing needs. This also means a loss of control over the business; and partnerships can end up like marriages, in divorce.  Yet another alternative startup financing is bootstrapping.  Bootstrapping is financing a business startup or business growth through non-traditional methods. Bootstrapping is about raising funds (for example, to start a new business), without startup capital.  If you plan to startup a business that has a significant investment in capital equipment, consider asset financing.  Asset financing will provide a loan for equipment that you buy to operate your business.

For new business owners, that might mean working several jobs to raise cash.  Or revising your plan to start your business with less money, or fewer products or services.  Consider leasing furniture, computers, sharing office space and administration staff.  Make sure you carefully consider your cash flow needs and do a cash flow projection for at least a two-year period.  Cash flow management is a way of reducing startup financing needs; effectively manage your cash flow by managing receivables, payables, inventory, and short term debt (in other words, increase incoming cash and reduce outgoing cash). 

Some other non-traditional business financing methods might include:

  • use of credit cards;
  • second mortgages on the entrepreneur’s home;
  • equity loans, secured by personal assets; loans from key suppliers;
  • partial pre-payments or progress payments from large customers;
  • and/or loans from family, friends and associates.

For small business owners, obtaining the financing to startup your business or to keep it operating is usually a challenging experience. Before you borrow the money you need for startup, ensure that your business can support that level of debt and can repay on the lender’s debt schedule.  You need to have a strong business plan and be able to present a strong business case to your lenders.  

Financial lenders will assess your knowledge, your capability, and your business proposal. You will likely have to put up personal guarantees for the money you need; this means you have to have assets to back up your guarantees. Unfortunately, not all prospective business owners have the credit rating to qualify with their lending institutions. Business financing and business start up loans are serious endeavors.  You will owe a lot of money and if your business doesn’t succeed, your money and your lenders’ or investors’ money will be gone.

MBA in Finance Degree Online – For People Who Are Obsessed With Numbers

Tired of making regular campus trips for your MBA classes? Or are you planning to drop out of it due to your financial difficulties? Whatever the reason maybe it is quite understandable that managing both your social and educational life can be tough but now you can change this all by pursuing an MBA in Finance degree online.

Is Financial Management the Right Option for You?

Many people opt for an MBA in Finance just because the degree is popular and offers some good career prospects in the future. This is a wrong assumption which often misguide people due to which they land either going nowhere or else totally dissatisfied with their jobs.

Before stepping into any field it is important that you first research and analyze. Hence to help you with this provided to you here is information on the MBA in Finance degree online which may help you make a good decision.

Prerequisites for Admission

A bachelor’s degree in business from an accredited institute is needed to qualify for the Finance program. There are also certain courses which you will need to cover if they have been not covered in the bachelors program. Students also need to successful clear their GMAT to qualify.

Important Courses

There are certain courses which increase the overall value of your MBA in Finance degree online hence giving it a more professional edge. Therefore the important courses which you should include in your degree are:

  • Investing Theories
  • Marketing Mix Strategies
  • Decision Making
  • Global Financial Laws
  • Business Leadership
  • Environmental Economics in Management
  • Accounting Information Interpretation
  • Banking and Financial Markets


Career & Salary Outlook

A MBA in Finance degree online prepares you for careers as financial officers and managers; few also go on to become investment bankers and analyst who see to the financial stability of a firm.

According to a research in 2008 the average income for finance professionals was about $90,000. The main factors which play a role in determining your salary package includes the reputation of the school you attended, your location, earlier experience and the industry your hired in.

Accredited Online MBA Schools

There are certain accredited online MBA schools which offer MBA in Finance degrees online:

  • Kaplan University
  • Jones International University
  • American Intercontinental University
  • Walden University
  • Baker College Online
  • DeVry University


The MBA in Finance degree online is just like an on-campus program consisting of the same fundamentals and offers you the same level of ability. As it does not need any lab work to be carried out this program can be easily carried out by you online without much difficult and is a good option.

Starters Guide to the Stock Markets

With the implosion of the global financial and credit markets, leading to the worst conditions in at least 70 years, it might be important to have a better understanding of the stock market and it works.

First, why is it called a market? Well, a market is a place where goods are bought and sold. The stock market is where people buy and sell stocks, or shares of ownership in a company. Potential investors can choose from many companies that are listed on the stock exchange (or market). When people buy and sell stock, it’s called trading.

Who Am I If I Own Stock?

When a person buys stock in a company, that person becomes a shareholder in that company. (Stockholder is another name for a shareholder.) A shareholder is also called an investor in the company. When that company makes money, the value of the company’s stock often increases. Then more people become interested in investing in the company. Sometimes, shareholders receive a dividend, which is part of the company’s earned income in the form of a cash payment.

Some people try to make money by buying and selling stocks. Stock prices move up and down. Sometimes very dramatic changes in prices occur and as we have seen with the crash of the markets in October of 2008 prices can fall very sharply. When that happens, shareholders lose money by selling stocks that they own. A company’s stock price may be affected by market or economic conditions or in the case of a market crash, just irrational fears.

When people invest in a company’s stock it has an effect on the stock’s price. As more people want to buy shares, the stock’s price usually goes up because more people want to own it. On the other hand, if more people want to sell their shares and there is less demand for them, then the price of the stock goes down.

Just like an individual, a mutual fund can also buy or sell shares of a company’s stock. A mutual fund is a group of stocks and/or bonds that is owned by a group of people. The advantage of a mutual fund is professional managers select stocks to buy and when to sell. The people who invest in mutual funds are also known as shareholders because a unit of ownership in a mutual fund is called a share. A mutual fund uses the cash invested by its shareholders to purchase stocks, or in some case, bonds. Since a mutual fund may contain the stocks of many companies in its portfolio, shareholders are often able to own a greater and more diverse number of stocks than if they invested directly in the stock market.

Two Common Measures of Market Performance

Stock market averages are quoted in the media because they provide clues about overall movements in stock prices and whether most investors are trying to sell or buy shares. The most often-quoted market average is the Dow Jones Industrial Average. The prices of a specially selected group of 30 industrial stocks (some of the largest companies in the United States) are averaged each day to determine the Dow Jones Industrial Average.

The Standard & Poor’s 500 Index (S&P 500) t 500 different stocks. It’s an index composed of the stocks of 500 US companies. Created by the Standard and Poor’s Corporation in 1923, today the S&P 500 follows a number of sectors, including financials, information technology, health care and many others.

A big difference between the Dow and the S&P 500 is how their values are calculated. While the Dow only looks at stock prices, the S&P 500 looks at the total market value of each stock in the index. A stock’s total market value is found by multiplying its share price by the number of outstanding shares. To find the S&P 500’s current value, a computer figures out the total market value of all 500 stocks in the index, adds them together and divides that sum by a number called the “index divisor.”

A lot of investors prefer to use the S&P 500 as a market indicator because it looks at total market value and includes more stocks from different industries than the Dow. Many mutual fund portfolio managers compare their fund’s performance with this index.

That’s why many people think this index gives a clearer picture of the stock market than other stock market averages or indices. Since the S&P 500 includes so many companies and industries, it’s known as a broad-based index. Although a mutual fund may compare its performance to the S&P 500 or another broad-based index, this does not mean the fund’s portfolio has the same stocks that are tracked in the index.


Nasdaq is short for National Association of Securities Dealers Automated Quotation system. This computerized trading system was launched in 1971 and has become very popular as the market for smaller companies. Stocks traded over-the-counter, rather than on a traditional stock exchange, are reported here. The Nasdaq Stock Market now accounts for over half of the volume of all stocks traded every day, and the Nasdaq Composite currently tracks the prices of more than 3,000 stocks.

As with the S&P 500, the market values of the companies within the index are used to calculate the value of the Nasdaq Composite. But because it contains so many smaller companies, this index offers a look at a different section of the market than the Dow or the S&P 500. Investors use the composite to get an idea of what’s going on with young, and possibly fast-growing, companies.

Which Index is Best?

No one market indicator is best for everything. There are more than 100 indices and averages for watching different parts of the market. But if you use the Dow, S&P 500 and Nasdaq Composite together, you should get a good idea of what’s happening in the entire stock market.

All kinds of people invest in the stock market for all sorts of reasons. Some people are active traders, taking positions in stocks for a day or two looking for quick changes in the price of stocks, and then selling on any upward movement in price. This is known as day trading. Other people invest in stocks for the long-term potential for growth and the gains from the payments of dividends. Others have their accounts professionally managed by a stockbroker, who will often be authorized to buy and sell in the name of the account holder.

As we enter into 2009, most forecasters are calling for a sharper recession and predicting that both the credit markets and stock markets will take several months to recover. The smart money is looking around at the prices of stocks and carefully picking from the sharp declines to buy companies at way under real value. The risk for most investors, is as the economic continues to decline, even good companies that are under valued may fail.

Stock prices as low as this have not been seen for a very long time. If you plan to invest now, be there for the long haul and expect more sharp variances in prices before we see stability return to stock investing.