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Learn about finance, understand finance, and decipher finance.
Category:
Team building
Author:
Wang Dongmei
Source:
Dalian Storage and Transportation Company, Safety and Environmental Protection Asset Department
Release time:
2022-12-01
Visits:
61
As a financial professional, in addition to performing one’s job duties well, it’s also essential to continuously learn and enhance one’s professional skills—and obtaining certifications has become the top choice for finance professionals.
When I first started learning introductory finance, my sole motivation was to pass the certification exam—almost as if I’d returned to college, where a score of 60 was considered perfectly acceptable. However, as my studies deepened, I realized that exam questions were no longer limited to straightforward multiple-choice or true-or-false items. Moreover, it became increasingly difficult to mechanically memorize hundreds of financial formulas. I knew it was time to change my study approach, so I adopted a “meaningful memorization” method. It was precisely this shift in my learning mindset that enabled me to gain a deeper understanding of finance.
For example, the “time value of money” involves numerous formulas. Yet, when we combine theory with practice, whether it’s the future value of compound interest, the present value, or various types of annuities, they all ultimately boil down to accounting for the effect of time and interest. If you try to understand and memorize these concepts in a practical context, they don’t seem too difficult at all. Take “financing management,” for instance. It’s a process aimed at meeting the operational and developmental needs of a business by carefully considering real-world circumstances and selecting financing methods that are fast, have few restrictions, and carry low interest rates. After all, financing is essential for the normal operation of a company; thus, working capital management is equally critical. The guiding principle here is: How can we enhance the efficiency of fund utilization, reduce funding costs, and maintain short-term solvency—all while satisfying the company’s regular funding requirements?
At the heart of enterprise management lies financial management; at the heart of financial management is the management of cash flow—and ultimately, it all comes down to how much money a company earns. In bookkeeping terms, this translates into revenue, costs, profit, and distribution. By linking these elements together, we can compile several basic financial statements: the balance sheet, the income statement, and the cash flow statement. Through analysis of these statements, we can assess a company’s debt-paying capacity, operational efficiency, profitability, growth potential, and cash flow situation—providing crucial insights that inform business and operational decisions made by corporate leadership, investment decisions by investors, and credit decisions by creditors.
Have you understood the important value of finance?
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