Corporate Finance analysts are concerned with managing the organization's cash flows. Managing cash flows involves analyzing the levels of inventory, accounts receivable, and accounts payable, because these influence the cash needs of the organization. Analysts also review the cash flows of proposed projects to determine whether the projects are desirable. As the organization needs additional funding, the corporate finance staff is responsible for arranging financing through such means as loans or issuing stocks or bonds. Whereas most corporations are usually in need of additional funds, other entities, such as pension plans, life insurance companies, and individuals, have funds that they wish to invest, usually in the form of stocks or bonds.
Banking is the link between the two main areas of finance described above.
The banking function serves as an intermediary between those who need funds and those who have funds to invest. Banking includes banks, savings and loans, and investment banks that assist corporations in issuing stocks and bonds. Most large firms include Risk and Insurance within the corporation finance function. This area is responsible for protecting the firm's assets needed to generate revenues and profits. Activities of risk management include loss control, insurance purchases, and employee benefit management.