Finimpact

FAQ

Is corporate finance the same as accounting?

Corporate finance deals in the way businesses buy the things they want to buy, such as investments, where as accounting is the science of measuring those transactions

What are the main functions of corporate finance?

Capital Budgeting Capital Structure and Working Capital Management could be seen as three of the primary functions of a corporate finance department

How do companies manage risk in corporate finance?

Companies may enact policy to mitigate risks, set risk tolerance thresholds, or conduct reviews of ongoing activity to detect new risks

How do corporate finance decisions affect shareholder value?

As a business conducts ongoing operations, it may make investments, innovate, or payback shareholders dividends. All these decisions ultimately go into the valuation of the business which may enrich shareholders 

How does a company determine its optimal capital structure?

While there is no correct answer, if a business consistently hits its investment and cost of capital goals it may consider itself doing well in terms of capital structure. This topic has been widely studied by Stewart Myers.

About the Author

Kal Salem

Kal Salem

MA Accounting - Arizona State University

A CPA and finance professional working with small businesses to educate owners and grow alongside their businesses. He holds a Masters in Accounting and a BS in Supply Chain Management. Owner at Salem CPA Services LLC.

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