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what is corporate finance?

Rohil Patel

What is Corporate Finance? (And How You Can Start Preparing in High School!)

Corporate finance might sound like a fancy buzzword you hear on Wall Street or in a Netflix series, but it’s a key part of how businesses function. In simple terms, corporate finance is all about managing a company’s money—planning, raising, investing, and spending funds in ways that maximize profits and minimize risks. It’s like being the financial brain behind a company’s decisions, ensuring it grows sustainably.

If that sounds like an exciting career, you’re in luck! This post will break down what corporate finance is, the types of jobs you can explore, and how to start preparing for this career while you're still in high school.

What Does Corporate Finance Involve?

At its core, corporate finance is about answering two major questions:

  1. Where do we get the money to fund our operations and growth?

    • This involves raising capital through debt (loans or bonds) or equity (selling shares).

  2. How do we spend that money wisely?

    • Companies need to decide whether to invest in new projects, buy new equipment, expand into new markets, or return money to shareholders.

Types of Jobs in Corporate Finance

If you’re considering a career in corporate finance, here are some exciting roles you might aim for:

  • Financial Analyst: Helps the company forecast future earnings and evaluate investments.

  • Treasury Analyst: Manages the company’s cash flow and financial risk.

  • Corporate Development Analyst: Focuses on mergers, acquisitions, and partnerships.

  • Chief Financial Officer (CFO): The ultimate goal for many—a CFO oversees all financial activities of the company.

Why Choose Corporate Finance as a Career?

  • High Demand: Companies of all sizes need financial professionals to manage their funds effectively.

  • Great Pay: Starting salaries for financial analysts often range from $65,000 to $90,000 annually, with significant growth potential.

  • Dynamic Work: You’ll analyze markets, strategize for the future, and interact with people across various departments.

  • Transferable Skills: Corporate finance teaches skills like financial modeling, critical thinking, and risk management that are valuable in almost any field.

How Can You Start Preparing in High School?

The journey to a career in corporate finance starts now! Here are actionable steps you can take:

1. Take Relevant Courses

  • AP Math Classes: AP Calculus and AP Statistics build the analytical skills you’ll need.

  • AP Economics: Understanding microeconomics and macroeconomics is essential.

  • Business Electives: If your school offers finance, accounting, or entrepreneurship classes, take advantage of them.

2. Join Extracurriculars

  • FBLA (Future Business Leaders of America): Compete in finance-related events and network with like-minded peers.

  • Investing Clubs: Join Timber Creek Wharton Investment Club! If your school doesn’t have one, consider starting a club! This shows initiative and builds your knowledge.

  • Student Government: Leadership roles help you develop communication and decision-making skills that are crucial in corporate finance.

3. Boost Your Academic Profile

Top colleges for corporate finance careers are competitive, so aim high:

  • GPA: A 3.8+ GPA is ideal for the most selective universities.

  • SAT/ACT Scores: Target a 1450+ on the SAT or a 32+ on the ACT.

  • Course Rigor: Take honors or AP classes in math, business, and economics to stand out.

4. Explore Finance Early

  • Summer Programs: Many universities offer summer business programs for high school students (e.g., UPenn’s Wharton Pre-Baccalaureate Program or NYU Stern’s Pre-College Program).

  • Internships: Look for local businesses or startups where you can shadow someone in a finance-related role.

  • Online Learning: Platforms like Coursera and Khan Academy offer free courses in finance and accounting.

Best Colleges for Corporate Finance Careers

Here are some top colleges to consider if you're aiming for a career in corporate finance:

  1. University of Pennsylvania (Wharton School): Renowned for finance, Wharton graduates often land top jobs on Wall Street.

  2. New York University (Stern School of Business): Perfect for students looking to break into finance in New York City.

  3. University of Texas at Austin (McCombs School of Business): Highly regarded for corporate finance and investment banking.

  4. University of Michigan (Ross School of Business): Strong alumni network and excellent finance programs.

  5. University of Virginia (Darden School of Business): Offers great internship opportunities and mentorship.

Your Corporate Finance Action Plan

  1. Stay curious! Read books like The Intelligent Investor by Benjamin Graham or follow finance news on CNBC.

  2. Build your skills by learning Excel and basic financial modeling through YouTube tutorials.

  3. Network with finance professionals—LinkedIn is a great platform to start connecting with college alumni or mentors.

  4. Focus on academic and extracurricular excellence to gain admission to a top business program.

By taking small steps now, you can set yourself up for success in the dynamic world of corporate finance. Remember, your journey starts here—and the possibilities are endless. Keep hustling, and who knows? You might just be the next CFO of a Fortune 500 company!

Got questions about preparing for a corporate finance career? Drop them below or DM us—teenagetraders is here to help!