Finance Degree Worth More Than Accounting Degree?

I know this question has been asked MANY times. But, once again.. Which major is better overall, in terms of jobs?

I come from a non-target school, and it seems like every student here has a hard time getting a general finance internship/job, (never mind investment banking). At this point, I assume that there's a high demand for finance jobs, but low supply. It's pretty easy getting accounting internships and jobs, (all my friends have already done their Big 4 internships), but finance students are struggling to even get an internship.

It makes me question on whether a master's in Finance would be worth it? IB jobs seem to be more favorable for Finance majors, but at the same time many of my mentors in my college journey have always told me that, "Accounting is the foundation. If you don't know accounting, then finance would not be so useful in itself"

It seems like accounting plays a HUGE role in getting better job positions (even finance jobs) , even though in many prior discussions on WSO, many people have always underestimated Accounting, by claiming that it's a worthless degree. What do you think, Finance or Accounting?

Is Finance a Good Major for Undergraduate Studies?

Choosing a degree in undergrad can often seem like a very important choice when it comes to recruiting, especially if you do not come from a target school / ivy league school. Students not coming from a target school, often end up choosing between a finance and accounting degree to establish the skills and track record needed for jobs on Wall Street.

The first thing to note is that you should do research on what majors students have been recruited from for Wall Street careers (if any). If there is a pattern of banks plucking Economics majors from your school - but no finance majors - you should consider pursuing an Economics degree if you know that Wall Street is what you want to do. Alternatively, if banks only ever hire Finance majors from your school you should expect that track record to continue.

If there is no record for previous recruitment you should consider:

  • A major that you are passionate about that you can spin into the financial services
  • A major that will help you develop a strong relevant skill set

Our users discuss the benefits of accounting vs. finance below.

In summary, typically accounting is considered to be the more difficult major (however, that will vary by school). This means that your GPA may be lower and you will spend time learning about some of the intracacies of accounting that will not be relevant to you until later in your investment banking / PE careers.

Mark Hanna - Private Equity Analyst:

Accounting is usually a much harder undergraduate degree. You have to master accounting itself, and then learn audit, tax, and the laws that go with them. A lot harder in my opinion than learning basic-intermediate level accounting, how to discount streams of cash flows, and how different capital structures affect company value. Accounting having harder classes also leads to lower GPA.

Conversely, user @chestnutxyz shared their belief that accounting is better route:

chestnutxyz:

I work in IB and graduated quite recently - majored in finance after switching from accounting, been reflecting on this - major in accounting. No one will look negatively upon it relative to majoring in finance, and you get the security + easier classes, higher GPA = better grad school.

EnlightenMeLikeVoltaire - Consulting Associate:

Finance is a very broad major and a lot of the skills learned within a finance curriculum can be picked up pretty quickly - this is not the case with accounting.

I studied both accounting and finance, but, if I could go back, I would have studied something that generally interested me (not that there is anything wrong with accounting) such as a science or language.

Another user shared an alternative route.

CanadianEnergyBanker - Investment Banking Analyst:

Pro tip: Major in Accounting and Finance. No compromise, just logic.

Master's in Accounting vs. Master's in Finance

When choosing between a Master's degree in Finance and Accounting - our users recommend doing a Master's in Finance as that will set you up best for bulge bracket recruiting. A Master's in Accounting will set you up to do Big 4 Accounting recruiting as detailed by a user below.

chestnutxyz:

Get a masters in only one, but a Masters in Accounting will not set you up well for recruiting, but it would set you up well to land a position with the big 4. Don't rule it out, if you're a top performer you can get into a transaction advisory group and then move over.

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Comments (82)

Oct 6, 2016

If accounting majors easily get Big 4 jobs, yet you want to work in IB, why would an accounting major help you, according to your logic?

Oct 6, 2016

Well, I've heard that some people land IB positions with an MBA. Does that make any sense? I'm just saying that majoring in Accounting gives you job security, if you ever wanted to fall back from IB, or if you don't get that IB position you were chasing after. A finance degree wouldn't do the same in my opinion.

Oct 6, 2016
Singh_chera:

Well, I've heard that some people land IB positions with an MBA. Does that make any sense? I'm just saying that majoring in Accounting gives you job security, if you ever wanted to fall back from IB, or if you don't get that IB position you were chasing after. A finance degree wouldn't do the same in my opinion.

I work in IB and graduated quite recently - majored in finance after switching from accounting, been reflecting on this - major in accounting. No one will look negatively upon it relative to majoring in finance, and you get the security + easier classes, higher GPA = better grad school. It's the right answer.

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Best Response
Oct 6, 2016

Pro tip: Major in Accounting and Finance. No compromise, just logic.

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Oct 6, 2016
CanadianEnergyBanker:

Pro tip: Major in Accounting and Finance. No compromise, just logic.

This is ideal and will stand out when reviewing resumes. I already looked through some for my team and double majors was something I used to keep some people in the running.

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Oct 6, 2016

@chestnutxyz @CanadianEnergyBanker Matter of fact, I am currently double majoring in accounting and finance. Would you recommend doing a master's in both majors?

Oct 8, 2016

Having reviewed resumes, I can assure you that when we are looking at prospective analysts it doesn't stand out. Yes, it's a nice combination, but there's a fair bit of course overlap generally speaking and neither are regarded as impressive in and of themselves. Also, almost no resume ever stands out in a good way.

Oct 7, 2016

Pro tip on your pro tip: Declare accounting major, take the relevant courses (at my university it was the first 15 hours) and keep the dual major on your resume until you walk. This allows you to reap all the benefit, but only requires the most necessary cost. For me it also opened up a ton of recruiting (ie finance functions at big 4, c banking) that was otherwise inaccessible, and allowed be to land rolls (c banking, finance function at F500, FO IBD, Valuation shops) that I may not have landed either in terms of interview or placement, without.

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Mar 25, 2018

Finance

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Mar 25, 2018

Thanks James

Mar 25, 2018

Just to clarify as you're posting in the Equity Research forum, are you asking about an analyst / associate role as an equity researcher or a financial analyst role working on a company's internal finances (i.e. FP&A)?

Speaking to the former, I've seen it go both ways. Some teams really value accounting expertise, especially when the accounting is opaque (e.g. complicated revenue recognition provisions, off-balance sheet disclosures, etc). To some degree, I think there's a selection bias issue as well because accounting majors tend to go into accounting whereas finance majors are more focused on finding jobs that involve forecasts / modelling and such. Bottom line, I don't think there's much of a difference if you dedicate your time and efforts to getting the right internships and networking aggressively.

While my network and connections are more limited in the context of FP&A professionals, I've generally seen more finance majors there. Again, I'd note that there may be a bit of a selection bias thing going on.

Oct 6, 2016

I majored in both accounting and finance and would say that the best way to go, if knowledge applicable to a career in finance is what you want, is to major in finance and take up through intermediate financial accounting.

The reason why majoring in finance is preferred to majoring in accounting by many on this forum and the industry in general is because 1). upper level, and arguably some of the hardest, accounting classes (managerial accounting, audit, tax) are completely irrelevant for IB, which means that you're at the very least risking your GPA for classes whose material you cannot use in your desired career path, and 2). in the absence of a sophomore IB internship, majoring in finance acts as a proxy for a demonstrated interest in the financial industry.

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Mar 25, 2018

bump

Mar 25, 2018

Agreed - I think it mainly depends on your school and the recruitment process. I went to an SEC school and studying finance would land you a job at the local Regions Bank inside the local Walmart, if you were lucky. A few boutique banks (stephens) recruited, but they solely targeted accounting students. There are upsides / downsides to studying either, I would just research which major has the best placement from your school and think about it that way.

All else being equal - I think studying accounting is the better way to go - but at the end of the day you forget most of the stuff anyway and frankly the only two accounting classes that really teach you a lot are intermediate I & II - so you could study finance and just take those two courses and put that on your resume.

Oct 7, 2016

I double major-ed in Accting & Finance but if I had to do it all over again, knowing I wanted to be a trader, I would have just majored in Math.

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Oct 7, 2016

How far would math have gotten you if you wanted to break into I-B? Let's be real.

Oct 7, 2016

Hence me saying trader. I don't understand the obsession with IB, S&T is such a better lifestyle.

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Oct 13, 2016

I was a math major. Didn't recruit for finance out of undergrad, but seemed to be respected when interviewing later.

Mar 25, 2018

I saw about 1/3 finance 1/3 accouting 1/3 economics......

Mar 25, 2018

You know what's sick? I know a kid who triple majors in those...

But yes, he's correct.(And engineering majors for specific areas too.)

Mar 25, 2018

finance/econ/accounting? Geez, talk about redundant.

"We are lawyers! We sue people! Occasionally, we get aggressive and garnish wages, but WE DO NOT ABDUCT!" -Boston Legal-

Oct 7, 2016

What accounting classes do you think would be useful outside of financial accounting 1 and MAYBE financial accounting two ..

I feel like I regularly use info from four college courses financial accounting,. intro to finance, Strategic management and Corp Finance

Adv corp finance, private company valuation and analysis of financials stmts would have been helpful, but I had my head in my ass when I was selecting electives

Oct 7, 2016
Brosef Stalin17:

What accounting classes do you think would be useful outside of financial accounting 1 and MAYBE financial accounting two ..

I feel like I regularly use info from four college courses financial accounting,. intro to finance, Strategic management and Corp Finance

Adv corp finance, private company valuation and analysis of financials stmts would have been helpful, but I had my head in my ass when I was selecting electives

Agreed. Aside from those financial accounting courses, all the other classes are relevant to accounting careers. But at the same time, finance seems very general to me. I can see how all these financial theories we're taught can be applied realistically, but once you join one of these big companies, they teach you their ways. I've actually heard that whatever your taught in college, is basically irrelevant to what you're actually going to be doing in your job.

Oct 7, 2016

To an extent, and definitely in the first few years of university, but if you somehow know you are interested in an M&A oriented career when you are a sophomore, the courses I mentioned above would actually be pretty applicable.

like a dumbass, I took upper level major courses like fixed income securities, financial engineering of financial derivatives, management of financial institutions, and some marketing classes as electives.

Oct 7, 2016

Tax or valuation accounting - but most likely it's a course only open to majors.

Oct 7, 2016

I double majored in both and am at a lower mm PE shop, and I can say I use my knowledge of accounting much more than finance. Without a solid base knowledge of accounting it is difficult to be able to grasp the revenue drivers and how that affects cash flow, understanding different accounting methods/accruals and working capital flows etc. Some of the advanced corporate/partnership tax classes are also very applicable when you get into deal structuring. At the same time there are finance classes I had that are not at all applicable to my job now.

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Oct 7, 2016

Interesting! I've had Finance teachers in school, who said they've missed out on certain opportunities just because they didn't know accounting. Makes me feel like accounting is the way to go for my masters.

Oct 7, 2016

On the real - go Math. Finance & Accounting are just applied mathematics, and you get the bonus of everyone being impressed with you being a math major.

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Oct 7, 2016

Not gonna lie, math would sure take a toll on GPA.

Oct 7, 2016
WhispersAEC:

On the real - go Math. Finance & Accounting are just applied mathematics, and you get the bonus of everyone being impressed with you being a math major.

Its amazing that there are people stupid enough to up vote this. In what possible way is accounting 'applied mathematics'? Easily one of the dumbest comments I have ever seen. Are we now going to refer to everything that involves arithmetic 'applied mathematics'?

Accounting and finance majors serve a specific purpose. If you're looking for a career in one of these fields (excluding quant. roles), it is wise to take them as your major.

Math is NOT a major for just anyone and everyone. It takes a very specific individual to become a math major and you would already know if you were one of them.

The finance and accounting majors combination is extremely powerful and has significant utility (assuming you put the effort in and enjoy it). If you're interested in corporate finance, investment banking, accounting, consulting, then this combination is optimal in my opinion.

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Oct 11, 2016

I majored in Math at a top 20 non-target. Graduated phi beta kappa, etc. Everyone's experience is different, but so far I have found that internships/directly applicable job experience and networking are WAY more important than your educational resume. As far as college goes my resume could not really have been much better (top math major, varsity athlete, and tour guide - so relatively personable) but my job/internship experience was nearly non-existent and it really hurt me. For junior internships I got a superday for S&T at Citi, but since then I don't think I've ever had a response to any applications I've put out cold to IBD/S&T roles (probably applied to upwards of 100 if we're counting linkedin resume drops).

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Oct 7, 2016

My undergrad non target had finance, accounting and econ. I went with Econ as it was easier and I worked full time in internships. Had no problem breaking into MM IB.

Oct 7, 2016

I was actually considering majoring in economics at one point. But since I majored in accounting and finance in undergrad, don't know if mastering in Econ would be a good idea.

Oct 7, 2016

The truth is that finance is easy and what you learn in class is not that relevant in the real world. I know some schools actually have financial modelling classes and applied investing courses which are solid, but this is not often the case. If I was to do it again, I would do engineering and learn finance on the side, like I had to do anyways.

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Oct 7, 2016

Financial Engineering?

Oct 7, 2016

Nah probably like Materials or Mechanical Engineering.. I work in PE now and the fund I work for focuses on industrial companies and I feel like that knowledge would pay off a lot more than knowing the CAPM formula.

Oct 7, 2016

Rutgers? University of Washington?

Oct 7, 2016

I have an undergrad business degree with an accounting concentration in addition to having taken the finance classes part of our curriculum (minimal required - covers corporate finance, etc.). I work in corporate banking and spend the vast majority of my time analyzing financial statements of companies, creating & reviewing modeling, checking numbers of analysts, etc.

Accounting in my opinion is by far more useful than finance in corporate and investment banking given you are spending the bulk of your time analyzing company financials and creating modeling. In order to do this you need to know how the financial statements interact with each other, what all the different line items are, how certain accounting treatments & elections how an impact on the consolidated financial performance of the company. Finance isn't really going to teach you how to do this.

The best mix of course work (again in my opinion) in preparation for a banking career is a mix of the most relevant finance & accounting classes. In accounting you want financial accounting , intermediate accounting (typically 2 semesters worth), and financial statement analysis. From finance you'd want corporate finance (i.e. DCF, NPV, etc.), fixed income, investments, IBD class (if your school offers it).

Accounting gets a bad rap on this forum because people tend to think account major --> audit career. Yes, there are audit classes in accounting (usually 1 class) and there are tax classes but you do not need to take these. When going through my analyst program I noticed the biggest gap the non-business major (i.e. Econ) and finance students had to fill was accounting and it was something they struggled with. The people who had a good accounting background were able to hit the ground running much faster.

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Oct 8, 2016

I'll get a lot of crap thrown at me for this, but business degrees are a waste of time. You can learn all of it on your own, through books or the internet.

It makes more sense to get a degree that will teach you some actual skills, like math or computer engineering. Finance and accounting are all just common sense. The only time it makes sense to major in business is when you go to a prestigious school that allows you to build a network / land a job (but at that point you're going for the people, not the content).

Then out spake brave Horatius, The Captain of the Gate: "To every man upon this earth, death cometh soon or late. And how can man die better than facing fearful odds, For the ashes of his fathers, and the temples of his Gods."

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Oct 8, 2016
VolSurface:

I'll get a lot of crap thrown at me for this, but business degrees are a waste of time. You can learn all of it on your own, through books or the internet.

It makes more sense to get a degree that will teach you some actual skills, like math or computer engineering. Finance and accounting are all just common sense. The only time it makes sense to major in business is when you go to a prestigious school that allows you to build a network / land a job (but at that point you're going for the people, not the content).

Agreed 100%

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Oct 8, 2016
VolSurface:

I'll get a lot of crap thrown at me for this, but business degrees are a waste of time. You can learn all of it on your own, through books or the internet.

It makes more sense to get a degree that will teach you some actual skills, like math or computer engineering. Finance and accounting are all just common sense. The only time it makes sense to major in business is when you go to a prestigious school that allows you to build a network / land a job (but at that point you're going for the people, not the content).

LOL. I agree that business degrees are a waste of time, but accounting and finance are common sense? I think just like math and computer engineering, accounting and finance has its place in majors that teach actual skills. Think about it....you probably know some business majors that couldn't even handle those general accounting classes. Accounting sure isn't for everyone.

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Oct 8, 2016

As someone with a quantitative background, accounting and finance are difficult to classify as 'skills'. A mathematician, physicist, engineer, or even a biologist could quickly learn accounting and finance.

Accounting, though it can get convoluted and messy (I'm not saying it's a trivial subject) really just comes down to knowing a few sets of rules and applying them. A mathematician, who studies the principles of logic on the most fundamental level known to mankind, or a physicist, who explains parts of our universe using mathematical equations because the human imagination cannot fathom their existence, could easily pick up either accounting or finance.

Another example: show a physicist the Black-Scholes equation, and he will say "This is just a differential equation modeling a flux" and immediately understand how to solve (or derive) it, and why it behaves in certain ways. Show it to a finance major and he won't get much further than knowing what inputs impact it in certain ways and how to plug numbers into its solution.

Then out spake brave Horatius, The Captain of the Gate: "To every man upon this earth, death cometh soon or late. And how can man die better than facing fearful odds, For the ashes of his fathers, and the temples of his Gods."

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Oct 8, 2016

Fuck that. I am giving you a banana+1

Oct 8, 2016

I doubled in Finance & Mathematics. I feel mathematics stands out more than accounting

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Oct 8, 2016

True. But math is not specific to any certain career, aside from becoming a math teacher lol.

Oct 8, 2016

This could not be more incorrect. Math teachers are rarely mathematicians.

Then out spake brave Horatius, The Captain of the Gate: "To every man upon this earth, death cometh soon or late. And how can man die better than facing fearful odds, For the ashes of his fathers, and the temples of his Gods."

Oct 9, 2016

A lot of analytic roles whether it be tech or banking love math majors

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Oct 8, 2016

I came from a very non-target major (Biology). If I could go back and do it all over again, I'd major in either Finance, Accounting, or Math. I got to where I wanted to be through timing, luck, and rolling up my sleeves, but my journey could have been 100 times easier had I known that I wanted to pursue Finance from the get go and pursued one of the three majors above.

Oct 11, 2016

If you actually want to be the safest you can. You'd just get a Computer Science degree with a minor in Accounting and have a high GPA while self-studying Finance.

That way you have the back up of CompSci, or going back for a MPA to get into accounting. That's about as safe as it gets. But if its not something you're passionate about then you're not going to be able to keep that GPA up.

Major in the closest thing to what you enjoy and are good at, and then work your ass off. You'll be okay.

"It is better to have a friendship based on business, than a business based on friendship." - Rockefeller.

"Live fast, die hard. Leave a good looking body." - Navy SEAL

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Oct 11, 2016

Agreed.

Oct 16, 2016

+1

Oct 11, 2016

I see a lot of people taking this thread as an opportunity to do a little bragging and offer shitty advice, like triple-majoring. Here's some actual advice:

1. DO NOT pursue a MSA if you have any doubts about being a career accountant. I've seen so many people realize that while they perform well in accounting classes, they find the actual work slit-your-wrist boring.

  1. Pre-MBA: If you are trying to work in IB or the finance industry, a degree in Finance will help you immensely more than anything else. It shows you're interested in business and understand fundamental business & valuation concepts. There are exceptions, but this is largely true unless you come from a top target with a good story about why you suddenly want to work in business/finance.
  2. It is definitely easier to go accounting -> finance than the other way around, but it takes time and is challenging. It helps if you work in transaction services. If you are in tax or audit, it's much more difficult. People who went finance off the bat very rarely pursue accounting because they realized early on that accounting isn't for them.
  3. "Math" is not a fucking career path, it's academia. In the real world you don't need combinatorics or number theory to evaluate a business. Quant funds are a rare exception, they can throw their shit.
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Oct 13, 2016

True.

Oct 13, 2016

Frankly this depends on school.

I know plenty of history, political science, classics and philosophy majors who work at Goldman Sachs, Morgan Stanley, etc.

This advice is really only helpful if you "need it" from your school.

I don't care who your dad is

Oct 14, 2016

Finance is where money is going. Accounting is where money is been. Wouldn't it be a good idea to know a generous amount of both?

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Oct 14, 2016

Permit Mr. Old School who has actually been around for a minute to comment:

1) A Finance major has value in demonstrating interest in Finance.

2) A Finance major typically has limited value outside of the context of investment portfolio management*

3) Accounting is the language of business. Being fluent in a language helps.

4) Financial accounting matters for "outside" valuation purposes and investment decisions. Managerial accounting is where you determine how businesses actually make money. Those results are then subjected to financial accounting externalities (fixed asset accounting, tax structuring, nol's, depreciation, etc.). Most financial accountants know beans about how businesses actually run. Most managerial accountants are on that side because they couldn't/wouldn't get their CPA's.

5) The demand for finance positions in the corporate world is driven primarily by FP&A (financial planning & analysis). This involves being the go-between for accounting and operations for budgets, forecasts, and analysis of actual results. The amount of actual finance necessary for FP&A is minimal.

6) The road I'm surprised more people don't take to IB is accounting undergrad, Big 4 analyst rotation, then flip to grad school with finance emphasis if you don't land in transaction services or advisory services. If you're wired to be a tax or audit type, you likely won't enjoy IB (not enough structure).

7) I currently run two teams of analysts doing economics on capital decisions for an F500 energy firm. We are essentially the internal "deal team" for all the pitches you monkeys send out. My analysts include CFA's, MBA's from both target & non-target schools, and undergrads in Econ, Finance, Accounting and Engineering.

8) Our training focuses on structural modeling combined with operational understanding first, then exploring opportunities for value ( call it "alpha" if you like) second, then deal structuring. I've also worked extensively with IB teams on transactions, internal process development, and financial structuring. Given the work we do and the work I've seen from IB teams, I'm convinced that the best skill set for overall success analyzing and financing deals (and that's really what we're talking about on this thread, not trading or Cap Mkts) is someone with enough applied mathematical and statistical knowledge to model what Ops does, enough accounting knowledge to know what the financial statements are saying (and why they do or don't make sense), and enough finance to understand rates of return for individual capital budget decisions as well as the overall asset base (as well as how to think "financially" about deal options besides financial instruments). Right now, that typically means math, physics, CS, or engineering undergrads with MBA's with enough drive and sense to pick up the accounting as they go. IB may hire differently, but that doesn't mean they're good.

These comments are filtered through a first career in operations, a non-target MBA, BB S&T internship on WS (along with target school classwork), 2 years niche IB/AM, 1 year retail finance(!; argh!!!), 3 years VC; 2 years consulting; and 4 years as a corporate type (including standing up a Corp Fin department from scratch).

Hope this is helpful for someone, and counteracts some of the misinformation on this thread, particularly the BS about math being academia and the general misunderstanding around finance and accounting.

*Business has much more "investment portfolio management" than meets the eye once you realize that all capital spending is essentially an investment in a portfolio. Charles Koch's The Science of Success is a quick and easy read on his Market-Based Management methodology, which is essentially portfolio management for corporate assets.

Oct 15, 2016
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Oct 15, 2016
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I'm not a real banker though...

Oct 17, 2016
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