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Unless you picked up this book at the airport for a long trip to Fiji, it‟s a safe bet you are interested in and/or already have an MBA as such. This is the perfect time for you to define, plan, and execute your end game. But just what do we mean by the “end game”? The end game is not a singular, unique, and magical final event; rather, it is a series of interconnected objectives that lead toward an end goal or goals. For example, thinking about your future led you to your initial end game—exploring MBA programs. That effort in turn led you to another series of end games: taking the GMAT test, researching programs, completing applications, preparing for admissions interviews, and ultimately enrolling. Were these actions individual end games or a series of interconnected steps leading to a true end game? Now is when you define and take specific steps to reach your ultimate end game— employment. For those who recognize that the ultimate end game is satisfying and rewarding, employment, this section is a must-read. It is intended to provide insight, overview, direction, and encouragement. We review career choices in finance popular among MBA graduates. In addition, we provide some triedand-true strategies as well as “the road less traveled” advice. This chapter will complement your MBA program, hard work, and skills development, and assist you in attaining a satisfying and rewarding career. Overview: What Is the Marketplace for MBAs? Students choose to earn an MBA for different reasons. Some students simply want to round out their business skills, some are looking to advance in their current career/ industry, some are sponsored by their companies and plan to return following completion of the degree, some hope to start a business, and some are hoping to change their career trajectory. In all of these cases, it is important for the students to begin to think about their careers prior to the start of the program. With this preprogram planning, students can identify the schools that will provide them with the right skills, network, and business connections to reach their goals following completion of the degree. When considering the application process, prospective students should consider several factors as they compare business schools. Students look at size, location, strength of the alumni network, reputation, ranking, and specialty. Students interested in specializing in a specific discipline, such as finance or marketing, are best suited to consider schools with a reputation for placing students in these areas. Other schools are known for producing general managers. U.S. News & World Report is one well-known resource for reviewing rankings and can be found at http://gradschools.usnews.rankingsandreviews.com/grad/mba/search. Profile of Students’ Pre-MBA Careers It is also important to consider the pre-MBA industries and job functions ass well as the career functions and industries chosen upon graduation. In 2008, the Graduate Management Admission Council (GMAC) conducted its ninth annual survey of MBA graduates. There were 2,858 full-time MBA students who participated in the survey, approximately 41% of whom were non-U.S. citizens.
According to the results of the survey, approximately 29% of pre-MBA students enter the program from the products and services industry and 18% enter from the finance/accounting industry. Although these two industries represent the two largest pre-MBA industries, pre-MBA students enter programs with experience across diverse industries and backgrounds. The most popular job functions upon entry into the MBA program include marketing/sales at 21% of the students and finance/accounting a close second with 20% of the entrants. Regardless of where students begin, there are a variety of industries and job functions where they launch their post-MBA careers. Profile of Students’ Post-MBA Careers Post-MBA, students choose to enter various industries and job functions, often changing careers as a result of the MBA program. According to the GMAC survey, the number of students choosing the finance/accounting industry increased from 18% pre-MBA to 28% post-MBA. In fact, the finance/accounting industry represented the largest percentage of post-MBA students at 28%. Products/services represented 25% post-MBA versus 29% pre-MBA, followed by consulting (18% post-MBA versus 10% pre-MBA). MBA graduates choosing finance/accounting as a job function post-MBA also represented the largest group of respondents, 33%, followed by marketing/sales and consulting at 21% and 20%, respectively.Exhibit 21.1 presents two tables from the 2008 GMAC survey that represent the pre- and post-MBA job functions and industries. It is important to note that the largest percentage of students post-MBA chose the finance/accounting industry and job function. The MBA degree is preferred, if not required, for many careers in this space. The next section focuses on career opportunities that are most popular with MBA graduates in finance and the financial services industry. Following this overview, we talk about how to plan your career before, during, and after your MBA to achieve the largest return on investment (ROI). Career Opportunities in Finance When considering a career in finance, there is an important question to ask: Do I want to perform a corporate finance job function, or do I want to work in the financial services industry? Corporate finance is the finance functional role within an existing company in any industry. Financial services, in contrast, is a broad term for the industry that includes highly diverse and evolving segments, markets, functions, and companies. Careers in Corporate Finance Graduates who enter into a career in corporate finance may find themselves in any industry; consumer products and services, health care, technology, and retail are some of the many industries. Finance managers and business analysts are two typical titles that MBA graduates secure in corporate finance.
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Table of Contents Title Page Copyri
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Chapter 6 - Planning Capital Expend
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For Further Reading Part IV - Manag
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Successful Postmerger Implementatio
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This book is printed on acid-free p
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Syllabus How Chapter Topics in This
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Some of these experts are full-time
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About the Contributors Richard T. B
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Advances in Quantitative Analysis o
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enterprise development. Dr. Zachara
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The left side shows Nutrimin‟s in
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Gail, let‟s go over this balance
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Gail, do you have any questions abo
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11. Not all expenses are cash outfl
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Financial Statements: Who Uses Them
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profitability to keep investing for
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Financial Accounting Standards It i
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Downloadable Resources for this cha
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Next, we explain each of these thre
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liquidity. Or, more simply, achievi
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If these ratios are seriously defic
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The debt-to-equity ratio is evaluat
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year 1 to year 3. The net effect wa
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to rate of return on the equity. Th
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Other types of comparisons of finan
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income/sales), asset turnover (sale
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successful businesspeople should ha
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More than a decade ago, a special c
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companies is used for illustration.
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The identification of nonrecurring
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The Dow Chemical single-step income
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is a pretax measure, but income fro
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Sources: Companies‟ annual report
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Exhibit 3.11 Examples of discontinu
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amortization purposes, the Company
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Examples of nonrecurring items disc
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During Fiscal 2006, inventory quant
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The nonrecurring items of Boston Sc
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The disclosure presented earlier in
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gains or losses that appear as part
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ecurring as for Kimberly-Clark, the
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Summarizing Nonrecurring Items and
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This example of using the SEB works
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Exhibit 3.27 Other income (expense)
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Source: Pfizer, Inc., annual report
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Exhibit 3.30 Acquisitions note: Pfi
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Source: Pfizer, Inc., annual report
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Exhibit 3.33 Cost-reduction initiat
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Exhibit 3.36 Share-based payment no
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The Pfizer Worksheet Analysis: Down
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Some Further Points on the Pfizer W
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• It is common to treat items as
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FedEx Corporation (2007) First Sola
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1 The American Institute of Certifi
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28 These alternative translation me
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If you need some instruction in Exc
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To solve using Excel, open your Exc
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As you can see from the previous ex
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C6 = 5 • Now enter the “=” si
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Ordinary Annuity An ordinary annuit
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To confirm that the number of payme
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The FV of this first payment into t
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Exhibit 4.15 Finding the future val
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Exhibit 4.18 Finding the present va
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From Exhibit 4.20, we see that as t
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Exhibit 4.22 Amortization schedule
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Exhibit 4.25 Regular cash flows wit
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Internet Links For Further Reading
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Investors who are risk averse will
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considering the risk of a single as
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Portfolio Risk Stand-alone risk is
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In spite of unique or diversifiable
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If a particular stock is highly sus
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The formula tells us that, to begin
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for the entire market of stocks sin
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The dividend per share for preferre
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If you are able to determine the cu
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Debt finance is the lower-cost meth
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We don‟t observe many firms whose
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Capital Structure in Practice Finan
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are able to observe regularities in
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dividends and capital gains. We wil
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where EBIT is earnings before inter
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Since long-term debt holders have a
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accept more investment projects. Re
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A beer company is considering build
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accounts receivable, and tabulates
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profit by the tax rate determines t
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Accounting profit often mixes varia
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The concept that future cash flows
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Like project A, project C also cost
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The after-tax interest rate is the
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equal mix of debt and equity, its d
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The payback period rule stipulates
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The IRR rule is appealing in that i
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complete with its real options is g
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What does it matter that one invest
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Exhibit 7.3 Time line in dollars an
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There are a number of countries in
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eturn of 10% on its investments in
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Exhibit 7.12 Summary of exchange ra
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and so will the value of the liabil
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Source: CIA, World Factbook, availa
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Exhibit 7.18 Net present value of c
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equired interest payments to be pai
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So if the assistant treasurer was r
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This theory is far from perfect, as
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The Consulting Firm Jennifer, Jean,
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part by a statute, the Uniform Limi
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formation in Delaware (or any state
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purpose of requiring qualification.
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Phil‟s death may terminate the bu
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the transfer. This means that if Br
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These rules extend to tort liabilit
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In the absence of a meeting, stockh
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A more detailed discussion on the b
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Partnerships If possible, the resul
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associated with this arrangement ar
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Partnerships are also not separate
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For most start-up businesses, howev
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form, even at the risk of some unli
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likely that our consultants will be
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Thus, the corporation and LLC, with
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It is not possible to fully describ
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usiness corporation for all purpose
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a cash-basis taxpayer to be taxed a
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The Tax Reform Act of 1986 substant
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limit is the product of the value o
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he would have spent anyway. In fact
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protect Brad from the scenario of h
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paying for the privilege. If the st
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The second tax scenario attaches to
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include that nullity in his taxable
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then the capital gain to be taxed h
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Most relevant to Morris is Section
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To begin with, the ESOP will have t
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general partner of a limited partne
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small businesses) is also subject t
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oth Lisa and Brad would be free to
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Assume that a limited liability com
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corporations, and had been audited
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There is plenty of blame from the c
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• An important study about top ma
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• The federal government made at
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$79.7 million for other services, a
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Budgets offer a variety of benefits
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determine the impact of specific pr
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Exhibit 11.2 Budget variance report
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udget, we just add more to it next
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income statement. The financial bud
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For a manufacturing company, cost o
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C&G‟s Gift Shop has a policy to m
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Meeting cash obligations as they co
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was unusually low, say, due to the
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A fixed budget, sometimes called a
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A large part of the budget selling
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• Centralized resource allocation
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Merewitz, Leonard, and Stephen H. S
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This chapter starts with a discussi
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Interestingly the numbers for quart
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Exhibit 12.4 Scenarion analysis.
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Pitfalls Although this analytic tec
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Exhibit 12.6 Variable cost element
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Variable Cost as a Function of Outp
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If scenario 2 yields a lower profit
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Microsoft certainly does not price
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If it is determined that dumping ha
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Leaving government agencies and not
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transaction processing. Each proces
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Exhibit 13.3 E-commerce transaction
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To summarize the analysis, the busi
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Capacity costs are probably the mos
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which it was, but for the inventory
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They called this strategic cost man
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A closer study, however, revealed s
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the benefits of business planning.
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The last type of plan is called a d
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The Business Plan We will progress
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Hook the Reader That means having t
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Industry The goal of this section i
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upscale suburban client who wants p
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Company and Product Description Com
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Exhibit 14.8 shows the competitive
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Exhibit 14.9a Advertising schedule.
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Scope of Operations What is the pro
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Development Time Line A development
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By law, most organization types req
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As mentioned in the development pla
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that can be depreciated, you should
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1 Special thanks to Matt Feczko, Mi
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For better or worse, the business e
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Leeson bet and lost. Japanese stock
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Between February and April 1994, Da
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LTCM could be picky when it came to
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An investor who wished to invest in
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Similarly, the swaps market has rev
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speculator would suffer losses equa
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American manufacturer will suffer l
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The ease with which futures facilit
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Exhibit 15.1 Call option payoff dia
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Exhibit 15.2 Payoff diagram for a w
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Notice that the put option payoff r
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Bank, owns a large block of NASDAQ
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can be tailored so that the money r
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Finally, the last step is to choose
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3 Fischer Black, who co-invented th
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not include assets that the firm ha
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Thus, a business valuation will usu
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Negative • Acme is highly depende
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Exhibit 16.3 Acme Manufacturing, In
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Profitability ratios reflect the re
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When we talk about the value of a b
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This example illustrates that with
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Income Approach: Discounted Cash Fl
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Exhibit 16.5 Acme Manufacturing, In
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Victoria explains that the second p
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Victoria analyzes Acme‟s audited
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In summary, the discounted cash flo
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Adjustment for Illiquidity As previ
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51% position sells for a higher pri
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examples. The proper application of
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The subject of this chapter is grow
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Finally, an acquisition can be effe
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M&A activity has been the focus of
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companies continue to make the same
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equals was taking on a distinctive
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Anatomy of a Successful Acquirer: T
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employees kept their original jobs
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where ΔCF t is the incremental cas
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where it‟s ultimately buried. Suc
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The following example summarizes th
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make sure that you are at least awa
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acquisition, there is no immediate
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its vascular business, which was so
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While all employees should be part
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makes strategic and financial sense
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Bhagat, Sanjai, Ming Dong, David Hi
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The 2008 financial crisis underscor
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Source: Plunkett’s Outsourcing &
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To summarize: Trends • Large numb
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Companies are becoming increasingly
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What steps should a company follow
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• Results of meetings with vendor
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• Breach of contract and remedies
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Assuming the project or service rev
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The answer is: profits. The company
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19 Information Technology and You D
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People‟s lives have been turned u
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its self-contained rechargeable bat
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Random-Access Memory (RAM) Random-a
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On laptop computers and PDAs, the s
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Operating System An operating syste
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the spreadsheet software together w
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Exhibit 19.5 Pro forma sales and in
Page 541 and 542: Database Software A database is a c
Page 543 and 544: Internet e-mail addresses often con
Page 545 and 546: Personal Finance Software There are
Page 547 and 548: There are several different approac
Page 549 and 550: One of the major attractions of the
Page 551 and 552: While not a new version of the Web
Page 553 and 554: industrial revolution, and has occu
Page 555: Dummies Inc. has a series of books
Page 559 and 560: organization. This chapter is desig
Page 561 and 562: As technology has evolved, the term
Page 563 and 564: While the software mentioned earlie
Page 565 and 566: Most of the focus of the investor c
Page 567 and 568: Data Access and OLAP Before the lat
Page 569 and 570: Exhibit 20.5 illustrates a differen
Page 571 and 572: Productivity Tools Workers expect t
Page 573 and 574: Client-server technology is based o
Page 575 and 576: Today, most programmers write in C+
Page 577 and 578: Exhibit 20.6 is a model of a typica
Page 579 and 580: No treatment of relational database
Page 581 and 582: Online analytical processing (OLAP)
Page 583 and 584: server) and the rest on the users
Page 585 and 586: the other operational departments w
Page 587: The world of business has changed d
Page 591: Chaffey, Dave, E-Commerce and E-Com
Page 597 and 598: understand the financial situation
Page 599 and 600: MBA graduates who are hoping to ent
Page 601 and 602: Summary Financial services opportun
Page 603 and 604: Let‟s begin with the “I left it
Page 605 and 606: MBA student: “Well, I go to [Grea
Page 607 and 608: Aiming for Your Goals For career ch
Page 609 and 610: Networking is generally regarded as
Page 611 and 612: Let‟s begin with some key assumpt
Page 613 and 614: like, or moving ahead in the compan
Page 618 and 619: Accrual accounting: An accounting m
Page 620 and 621: Cash flow: Cash that is spent or re
Page 622 and 623: Distribution channel: A chain of in
Page 624 and 625: Goodwill: As it relates to valuatio
Page 626 and 627: Management’s discussion and analy
Page 628 and 629: Ordinary annuity: An annuity that p
Page 630 and 631: Securities and Exchange Commission
Page 632 and 633: Vertical merger: A merger in which
Page 634 and 635: about activity-based costing progre
Page 636 and 637: Application systems ARPAnet Arthur
Page 638 and 639: Bell Labs Benefit measurement Beta
Page 640 and 641: goal orientation legal and contract
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segment information note share-base
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process of purpose of real world us
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uy/build decision capital budget in
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written resume Careers in corporate
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Cell Center for Research in Securit
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Compensation and ownership Competit
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Corporate culture Corporate debt in
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profit planning from an internal pe
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Data Data access and OLAP Database
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Askin Capital Management Barings Ba
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market approach publicly traded gui
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Electronic data interchange (EDI) E
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Extensible markup language (XML) Ex
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short term liquidity users and uses
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Fourth generation programming (4GL)
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Going private Going private transac
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Hypertext links Hypertext markup la
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Information technology and the firm
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International Accounting Standards
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Last-in-first out (LIFO) vs. curren
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Long call option payoff Longer-term
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Market risks Market size and struct
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Motivation to outsource Multiple IR
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Nonrecurring items defined disclosu
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Operational complexity Operational
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Outsourcing metrics Overhead Over-t
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Personal end game Personal expense
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Price competition Price decreases P
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Projected cash flow statements Proj
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Relevant range Relevant range assum
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Risk sharing Risk transfer Risk vs.
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Short call option payoff Short part
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Spot price Spreadsheet software Spr
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Summarizing nonrecurring items and
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acquisition the business dividends
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Timmon‟s Model of Opportunity Rec
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U.S. immigration quotas U.S. Intern
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discounting with discount rate form
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