What is an MBA in Finance
The MBA in Finance is targeted to those individuals currently working in or recent graduates aspiring to work in finance management or leadership. In addition to the traditional MBA building blocks, the MBA in Finance generally offers additional courses focusing on international finance, investment and corporate finance.
The MBA in Finance program can prepare you for careers in fields such as investment banking, securities, or even small business development. An MBA in Finance program includes foundational, non-specialized MBA concepts in key areas related to marketing, information technology, strategic planning, organizational development and accounting. These are key areas that can be applied to a variety of careers.
An MBA in Finance specialization provides understanding of the role of financial markets in a global economy and the ability to espouse the perspective of manager who is responsible for the financing and investment decisions for an organization. There is also the career path of an investment manager available to graduates with an MBA in Finance. The investment management career path requires a grasp of the perception that an investment or portfolio manager would have. This type of manager is one who makes investment decisions and asset allocation strategies in today’s global financial markets. So even though you may seek to follow a more specific path of a financial manager or an investment manager, the skills of the two paths complement each other. They both involve answering the same types of questions. One path looks at the question internal to the market they are in and the other path looks at the question from a global perspective.
The courses within an MBA in Finance specialization gives students the tools to perform fundamental financial analysis such as forecasting, budgeting, and analyzing the cost/benefit of capital investment projects; upper level financial questions, such as how to structure capital, policies on dividends, mergers and acquisitions, and enterprise risk management; and investments tasks such as reviewing and analyzing individual securities and managing diverse portfolios.
What’s the Career Outlook with an MBA in Finance
Careers in financial management are expected to rise by 19 percent from 2016 to 2026, which is faster than the average for all other occupations. Allocation of this growth percentage will vary by industry.
As the economy continues to grow, so does the demand for financial managers skilled in analyzing investments and making planning decisions. Cash management and risk management skills are also expected to be in high demand. During the past several years, organizations have been accumulating more liquid cash on their balance sheets, especially those with foreign operations. Organizations will need cash management as globalization continues to spread. Therefore, the demand for financial managers with cash management expertise will increase.
Financial and investment managers with a master’s degree on average, can earn 20 percent more than bachelor degree holders without a master’s. They can earn almost 80 percent more than those without a degree, according to the U.S. Bureau of Labor Statistics. Those with an MBA in Finance are unlikely to find themselves unemployed.
What Is the Average Salary for Finance MBA Graduates
Median wage is determined by calculating the wage at which half of the employees within an occupation earned higher than that amount, and the other half earned less. According to the Bureau of Labor and Statistics, in May 2016, the median annual wage for financial managers was $121,750. Within this category of workers, the bottom 10 percent earned less than $65,000, and the highest 10 percent earned more than $208,000.
In May 2016, the median annual wages for financial managers in the following top industries in which they worked were:
|Professional, scientific, and technical services||$142,300|
|Management of companies and enterprises||$140,650|
|Finance and insurance||$117,870|
Where Can I Expect to Use a Finance MBA
In 2016, approximately 580,400 jobs were held by financial managers. The categories of organizations employing the largest number of financial managers were:
|Finance and insurance||29%|
|Professional, scientific, and technical services||12%|
|Management of companies and enterprises||11%|
What Popular Career Paths for an MBA in Finance
Some tasks of financial managers are specific to their industry. Financial managers in government are experts concerning budgeting and government appropriations. Healthcare financial managers are experts on topics in healthcare finance. All financial managers must be aware of tax laws and regulations affecting their industry and related industries.
The following are various types of financial managers:
- Controllers lead the preparation of necessary financial reports that tell the health of the organization, such as income statements, balance sheets, cash flow statements, and statements of retained earnings. Controllers are also responsible for the preparation of special reporting required by governmental agencies and regulations. Controllers often have the duty of overseeing the accounting, audit, and budget departments of their organization.
- Chief Financial Officers and Treasurers oversee and plan their organization’s budgets to meet its financial goals. They are responsible for oversight of funds investment and raising capital (such as issuing stocks or bonds) to support the firm’s growth. They also strategize plans for mergers (two companies joining together) and acquisitions (one company buying another) as part of the company’s growth.
- Credit managers oversee the accounts receivable credit parameters of customers. They set credit-rating criteria, determine credit ceilings, and monitor the collections of past-due accounts.
- Cash managers are tasked with monitoring and regulating the cash flow in and out of the company to support business and investment needs. Cash flow must be projected to determine whether the company will have a cash shortfall or a surplus available for investing in strategic goals.
- Risk managers control financial risk by deploying various strategies to offset or limit the probability of a significant financial loss or the organization’s exposure to financial uncertainty. Currency or commodity price changes are the biggest financial risks a company can face.
- Insurance managers compute and decide how to limit a company’s losses by obtaining appropriate insurances against risks. For example, the insurance manager would need to compute if it is better to make disability payments for an employee who gets hurt on the job or pay the possible costs imposed by a lawsuit against the company.
What Licenses Required of an Finance MBA
While a professional certification is not required as a prerequisite for most jobs, some financial managers will still pursue licensure to demonstrate a level of competence. The Chartered Financial Analyst (CFA) certification is available for investment professionals who have a minimum of a bachelor’s degree, plus 4 years of relevant work experience, and successfully pass three exams. The Association for Financial Professionals provides the Certified Treasury Professional credential to those who pass their exam and have a minimum of 2 years of relevant experience. Certified public accountants (CPA’s) are licensed by their state’s board of accountancy. You must have a certain number of accounting credits and then take and pass the 4-part exam administered by the American Institute of Certified Public Accountants (AICPA).
What Qualities Make a Successful MBA Financier
|Analytical skills.||Executive level officers need assistance from key personnel on their teams to analyze their financial position and make many decisions every day that impact the organization.|
|Communication skills.||Financial managers often need to explain very complex financial transactions and statements to various constituents with varying degrees of financial acumen. Excellent communications are needed to assess the level of financial understanding of the recipient of the information and how best they understand numbers and data. For example, some want to see graphs, some need actual word problem examples, and some want comparative statements.|
|Detail oriented.||Error-free reporting is an absolute must for financial managers. High attention to detail is required for executives to trust the data they are given.|
|Math skills.||Depending on your role and the type of organization you work for, a higher level of math ability is necessary to understand financial documents and perform complex calculations such as time value of money, forecasting debt pay off, calculating return on investment and many other useful figures.|
|Organizational skills.||In addition to attention to detail, organizational skills are a highly coveted trait of the productive financial manager. They must prioritize tasks and projects while dealing with emergencies.|
Difference Between an MBA and a Masters in Finance
The MBA is a broader degree and generally addresses the for-profit, corporate or entrepreneurial arena comprising of multiple aspects of business. A Master of Finance program focuses more specifically on the finances of the company. Your personal career goals should determine which type of program would most benefit you.
Obtaining an MBA degree is an important step to land above an entry level job in most companies. MBA coursework teaches a wide spectrum of topics with emphasis on how to manage within each segment of a company such as development, accounting, human resources, and operations. MBA programs prepare students for management positions in many industries.
The Masters of Finance is targeted to students seeking to focus on finance related fields or obtaining higher level financial stewardship within a larger organization. Programs review finance concepts in a more comprehensive manner, with courses in higher level mathematics, quantitative finance, investing, financial markets, financial analysis, statement generation and reporting, and stock valuation. Master of Finance programs tend to be shorter in duration, usually last one full-time year of study.
What Core Classes Make the Curriculum
- Investments: This course teaches you concepts such as business valuation, equity analysis, stocks, bonds, derivatives and investment banking. This course also provides the foundation needed to successfully pass the Chartered Financial Analyst exam.
- Financial Accounting: In the financial accounting course, you will review several multifaceted topics and their effects on financial reporting. Topics in this course are more broad and high level. They include an overview of international accounting, the development of financial accounting standards, short and long-term investments in debt and equity securities, business acquisitions and mergers, valuation of land and other depreciable assets, foreign currency transactions, and accounting for not-for-profit organizations.
- Real Estate: Real estate specific courses prepare students to become asset managers. Real estate can be a significant portion of the asset portfolio of an organization. You will learn portfolio investments, valuation, financial modeling and equity analysis.
- Behavioral Finance or Urban Fiscal Policy: Behavioral finance is a very specialized course that will only benefit those working at a level where they must deal with government. This course discusses the financing of governments in the urban economy. Topics can include the causes and effect of the urban fiscal crisis, designing of optimal tax and spending rules for local governments, funding of public infrastructures and the mechanisms used in the municipal bond market, privatization of government services, and public financial systems for emerging economies.
- Corporate Finance: This path serves as a primer to business finance including corporate financial management and investments. Both finance non-majors and majors preparing for upper-level course work can benefit from this course. The primary focus is to provide the background, concepts, and apparatuses for investigating financial choices founded on fundamental principles of modern financial theory. The course can be highly rigorous and analytical as it is known as a “weed out” level course. The ability to do well in this course determines your success in subsequent, higher level finance courses. Areas covered include discounted cash flow methods; corporate capital budgeting and valuation; investment decisions under doubt; capital asset pricing; options; and market efficiency. You may also learn to analyze corporate financial plans, including capital structure, cost of capital, dividend policy, and related issues.
- Financial Derivatives: Financial derivatives are known as one of the more interesting topics of study of the financial manager. They can be the most challenging of securities traded, while at the same time, they can also be the basic securities commonly traded. The basic concepts of financial derivatives serve as the foundational blocks to understanding a much broader area of financial problems, such as multifaceted asset portfolios, calculated corporate decisions, and venture capital investing.
On-Campus vs. Online Finance MBA Programs
There is no longer a predominance of “traditional” graduate degree seekers. The current job market gives candidates with a graduate degree a step above most other candidates. Therefore, people in all levels of their careers from entry level (fresh out of school) to mid-career workers looking to change careers or move up in their companies can benefit from a graduate degree.
As the dependence on technology increases, information infrastructures are now able to support the demands and flexibility needs of the online student. Many graduate programs have realized that degree seekers have a higher chance of success if they have flexible opportunities to attend classes. Many degree programs now give you the option to take the program online, in person or a combination of the two. These situations have their pros and cons. If you are going to take online cases, you need to be diligent to stay on track and not procrastinate. Also, you will still have group work which may be more difficult to complete virtually without meeting in person.
Some personalities can be very different online than in-person which can be good or bad. Just another aspect to look out for. If you take classes in person, it is important not to miss or be late. You will have to add your length of commute and time to find parking for your overall time commitment. There is also significant out of classroom work. When deciding if you want to take online versus in person programs, another important consideration is the technology used for the online programs. There are generally discussion boards, quizzes, and assignment submission.
You will want to evaluate that it is a robust and stable system with little downtime. Currently there are approximately 3 million students enrolled in a full-time online degree program and approximately 6 million students taking at least one online course as part of the degree program.
Tuition for MBA Finance Programs
Tuition for an MBA in Finance can vary greatly. This can be due to the length of the program which can go from one year up to four years. Usually the higher the number of credits, the greater the length of the program, the higher the cost of the program.
It is also dependent upon if the program requires GMAT scores or not. The programs that require GMATs to be taken tend to have a higher tuition rate. As you might guess, the institutions with the higher costs also tend to be the institutions where their degrees carry a higher prestige. The difference between in state and out of state/country tuition tends to be about $10K higher for out of state or out of country.
Depending on the area you want to work in, the geographical location that has the jobs available, and the notoriety of where you received your degree from, it may be worth the added cost to go out of state or out of country. However, if you want to work in a local company or organization or would like to pursue entrepreneurship, it would probably be best to stay in state and save the money on the tuition. Added costs to be considered not covered by your tuition are: books, project materials, parking, transportation, required student fees, and room and board.
GMAT Scores for MBA Finance Programs
GMAT scores can be an important indicator of the likelihood a student will be successful in the program. Score requirements for online programs tend to be a bit higher than in person programs. This is because the online student must be organized and diligent in order to allocate study time on their own without procrastinating.
Not all schools require a GMAT score. The longer, full-time programs tend to require GMATs while shorter, accelerated programs may not. It can save you time to seek out what programs you are interested in and research what is required to attend that school. If you are unsure where you would like to take your program, then you should take the GMAT sooner than later so you don’t lose time meeting the score requirement of a program.
Campus GMAT Scores
Online GMAT Scores
Student / Faculty Ratio for MBA Finance Programs
Faculty to student ratio is an important factor in the quality of education you will receive. The lower the ratio, the more individualized attention you will receive. The more individualized attention you receive, the greater the odds you will understand the material better.
The ratios provided are based off all MBA programs regardless of concentration. To discover what the ratio is for the program you are interested in, you should research the faculty pages of the school and average size of the programs. Faculty could be part or full time. Many also work in the concentration and can provide the students with real-world examples.
Campus Student/Faculty Ratio
Online Student/Faculty Ratio
Student Population for MBA Finance Programs
When reviewing how the student population is spread across program formats, you will find the highest concentration of students are online, then part time, then full time. The concentration is spread based on flexibility. The higher the flexibility (aka the least amount of scheduled class time), the higher the number of students.
There are pros and cons to small cohorts versus large cohorts. Small cohorts can become very cohesive and encourage each other to make it through the program. However, if the personality dynamic is off, it is hard to find new group members in a smaller pool of students.
The large cohorts cultivate a variety of approaches to solve the same problem, help others to think outside of the box and foster creativity. However, you could feel like just a number and desire more individual attention. When researching schools, try to reach out to current students and ask about the culture to help you decide which type of culture best suits you.
Student Population from the United States
Most MBA students are from the United States. The number of online students that are from the US is near 100%. Since many programs are two years, it is not worth the travel, boarding and visa work for an international student to pursue an MBA in the US. Most likely they have a comparable program in their home country which is recognized by the organizations you would want to work in. There is a very large pro to having more international students in your program. They bring other ways of thinking to group work, exposure to how business is conducted in other countries that could be used in your organization, and networking opportunities.
Campus Global Enrollment
Online Global Enrollment
Faculty Information for MBA Finance Programs
Take note of the number of faculty the program you are interested has. The more faculty, the more likely you will be exposed to various instructors with different backgrounds. Both full time and part time faculty can bring different viewpoints to the curriculum they teach.
Having diversely experienced faculty provide you with opportunities to experience a variety of real world experience. The higher the number of the faculty that have doctorate the degrees, generally the better quality the program. And the more faculty available, the more individualized attention you will receive.
Campus Faculty Numbers
Online Faculty Numbers
Research the Best MBA Programs in Finance – GMAT Scores, Salaries, Rankings
- The number of on-campus MBA Finance programs offered: 179
- The number of online MBA Finance programs offered: 73
There are many MBA programs to choose from, however, a specialty in finance somewhat limits your options. If you are interested in online, you currently have 73 options. If you are willing to attend class in person, you will have 178 options. There are some general MBA programs than can touch on finance if you do not have an MBA in Finance geographically close to you and you are not interested in an online program. You would need to research the program to decide if enough finance topics are covered to meet the needs of your career path.
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