Corporate Finance
KCG’s Corporate Finance department, headed by the CFO, assesses the Group’s financial situation and influences corporate decisions based on the findings from its assessments. The corporate finance department has one primary goal to maximize the Group’s profit while minimizing its risks. In order to reach this goal, corporate finance is responsible for determining how much money the Group should need to raise, how to use its money, how the Group should invest its money. In the case of mergers and acquisitions, the corporate finance department plays a starring role in whether or not a merger makes sense in acquiring another company.
Cash Cycle
The corporate finance department also reviews the cash cycle of the company. The cash cycle of the company is the time between when the Group delivers its services and the time it takes to get paid after selling the services. The cash cycle is important to the success of the business because it determines if there is a need to obtain financing (or business loans). Typically, financing is sought if the cash cycle remains the same but sales increase or sales remain the same but the cash cycle increases.
Income
The income of a business is determined by deducting its expenses from its revenues. The corporate finance department continuously monitors the income of the business by keeping track of the revenues, expenses and inventory levels of the business.
Financial Ratios
The corporate finance department uses a variety of financial ratios to calculate where the Group stands and how this standing plays into the decisions made by company executives in order to continuously move the Group toward profitability. Not only does the corporate finance department runs these ratios to keep moving the Group toward its goals, but it also compares how the Group measures up against other organizations in the industry.
Corporate Finance Staff Primary Responsibilities
The corporate finance staff, under the direct supervision of the CFO, has some very important responsibilities. The corporate finance department covers all aspects of the corporate accounting functions, from budgeting and financing decisions to general accounting operations. KCG’s finance department breaks up the responsibilities into smaller units, which are focused on certain aspects of the corporate finance functions.
Budget Forecast
Finance employees are responsible for creating annual budgets and reviewing actual results to these budgets. Each company will be given a budget for its expenses; each budget is then reviewed by the company managers for any changes or requests.
Financing Decisions
When companies need outside financing for their operations, the corporate finance staff helps procure favorable loan terms for the business. The corporate finance staff accurately measure the future profits from new operations against the loan terms when obtaining bank financing.