WGU D076 Financial
Skills for Managers –
Unit 2: Overview of
Finance 2026
MODULE 01 – WHAT IS FINANCE?
LESSON 01 – WHAT IS FINANCE
What is Finance?
The study of managing and allocating funds at the personal of business level.
Finance vs Accounting
• Accounting is backward-looking and focuses on the past.
• Finance is forward-looking and focuses primarily on the future
• Accounting is the system of recording, reporting and summarizing past financial
information and transaction.
• Finance is the management and allocation of capital with the objective of investing,
forecasting, budgeting, saving, borrowing, lending, etc. Finance uses accounting
information to achieve these objectives.
Sub-specialties in Finance
• Business finance – Deals with sources of funding, capital structure of corporations,
actions that managers take to increase the value of a firm for its owners, and the
tools and analysis used to allocate financial resources. Also known as managerial
finance, financial management, and organizational finance.
• Capital structure – Mixture of debt and equity used to finance a firm.
• Investments – Involves deciding which assets to invest in to create wealth in the
future.
• Asset Managers – Most common responsibility withing the investment field.
They invest in funds to attempt to create wealth and earn positive returns.
• Asset Pricing – Sub-discipline of investments. Is the process of valuing assets.
You don’t know how much an asset is worth until it is purchased.
Asset pricers attempt to estimate the value of an asset prior to selling or
buying it. Once the purchase price is known, then the current market value
(what someone would pay for an asset) is known.
• Financial Institutions – Firms or organizations that accept a variety of deposits, to
offer investment products, loans, or broker financial transaction for individuals and
businesses.
Examples: central banks, consumer and commercial banks, insurance companies,
investment banks, mortgage companies, and pension fund management
companies.
,LESSON 02 – GOALS AND APPLICATIONS OF FINANCE
1
,Personal Finance vs Business Finance
Useful on a personal level. Questions that you might ask regarding personal finance are:
• Should I rent or buy?
• How much to save each month for a stable retirement?
• Should I take and auto loan or pay with cash?
• What is a good investment in the stock market?
At the business level you might ask:
• Is the launch of a new product adding value to the firm?
• Should the firm outsource part of production?
• How can the firm raise new capital to finance a new project? Bank loan, new bonds,
or new stocks?
• Should the firm purchase new equipment to cut production costs?
The main principle is whether the benefits of an action outweigh the costs.
Personal Financial Goals
Although everyone has different personal financial goals, the objective of such goals is the
same: maximizing individual utility.
Utility - economic term referring to the total satisfaction received from consuming
goods and services.
Business Goals
The goal of the financial manager (and firm) is “to maximize shareholder wealth” for publicly
traded firms or “to maximize owner wealth” for privately held companies.
LESSON 03 – THE ROLE OF FINANCE IN BUSINESS ENVIRONMENTS
3 Main Tasks of Financial Managers
• Investment decisions – Deals with what types of assets will be purchased to help the
company grow or add value.
• Financing decisions – Deals with what type of financing capital will be used to
finance new assets or new projects for the company. E.g.: Issue new stocks (equity)
or new bonds (debt).
• Managing working capital – Deals with the day-to-day operations of the firm, from
how much inventory to keep on hand, when to pay suppliers, or how to collect on
credit from customers.
Careers in Finance
• Corporate Finance
Investing and financing decisions, cash management, tax strategies, and financial
policy implementation.
2
, • Financial Analyst – Manage financial reports, provide analysis to make
strategic decisions.
• CFO – Responsible for all the financial decisions made by the firm.
• Investment Banking
Perform merger and acquisitions, corporate offerings, sales and trading.
• Investment Banking Analyst – Perform financial analyses of companies, do
administrative tasks, and create presentations called pitch books for meeting
with potential clients.
• Investment Banking Associate – Similar responsibilities as an analyst.
Sometimes work directly with clients.
• Senior Bankers – Vice presidents and managing directors source deals and
maintain relationship with clients.
• Private Equity
Deals with investments in firms that are privately held and whose ownership is not
yet bought or sold on public stock exchange.
• Angel Investors and Venture Capitalists – Does not typically work for a firm.
Invest their own money in start-up firms or new firms that hope to grow
quickly and then have a “harvest”.
▪ Harvest – Event where shareholders can receive a return on their
investment by an initial public offering (IPO) on a public stock
exchange. Or through a buyout (acquisition) by another firm or
financial institution.
• Analyst and Associate – Determine which deals to fund, evaluate potential
investment opportunities, source deals.
• Managing Partner – Highest level of leadership at PE companies and venture
firms.
• Commercial Banking
Financial institution that accepts deposits; offers checking and savings accounts and
other basic financing products; and extends various loans (car loan, home
mortgages).
• Teller – Interacts with customers at the bank’s front desk.
• Credit Analyst – Assets riskiness of lending to borrowers and whether loans
should be extended to potential bank clients.
• Personal Bankers – Responsible to find and attract new clients, both
depositors and borrowers.
• Management – Highest career level at commercial banks.
• Financial Planning
3
Skills for Managers –
Unit 2: Overview of
Finance 2026
MODULE 01 – WHAT IS FINANCE?
LESSON 01 – WHAT IS FINANCE
What is Finance?
The study of managing and allocating funds at the personal of business level.
Finance vs Accounting
• Accounting is backward-looking and focuses on the past.
• Finance is forward-looking and focuses primarily on the future
• Accounting is the system of recording, reporting and summarizing past financial
information and transaction.
• Finance is the management and allocation of capital with the objective of investing,
forecasting, budgeting, saving, borrowing, lending, etc. Finance uses accounting
information to achieve these objectives.
Sub-specialties in Finance
• Business finance – Deals with sources of funding, capital structure of corporations,
actions that managers take to increase the value of a firm for its owners, and the
tools and analysis used to allocate financial resources. Also known as managerial
finance, financial management, and organizational finance.
• Capital structure – Mixture of debt and equity used to finance a firm.
• Investments – Involves deciding which assets to invest in to create wealth in the
future.
• Asset Managers – Most common responsibility withing the investment field.
They invest in funds to attempt to create wealth and earn positive returns.
• Asset Pricing – Sub-discipline of investments. Is the process of valuing assets.
You don’t know how much an asset is worth until it is purchased.
Asset pricers attempt to estimate the value of an asset prior to selling or
buying it. Once the purchase price is known, then the current market value
(what someone would pay for an asset) is known.
• Financial Institutions – Firms or organizations that accept a variety of deposits, to
offer investment products, loans, or broker financial transaction for individuals and
businesses.
Examples: central banks, consumer and commercial banks, insurance companies,
investment banks, mortgage companies, and pension fund management
companies.
,LESSON 02 – GOALS AND APPLICATIONS OF FINANCE
1
,Personal Finance vs Business Finance
Useful on a personal level. Questions that you might ask regarding personal finance are:
• Should I rent or buy?
• How much to save each month for a stable retirement?
• Should I take and auto loan or pay with cash?
• What is a good investment in the stock market?
At the business level you might ask:
• Is the launch of a new product adding value to the firm?
• Should the firm outsource part of production?
• How can the firm raise new capital to finance a new project? Bank loan, new bonds,
or new stocks?
• Should the firm purchase new equipment to cut production costs?
The main principle is whether the benefits of an action outweigh the costs.
Personal Financial Goals
Although everyone has different personal financial goals, the objective of such goals is the
same: maximizing individual utility.
Utility - economic term referring to the total satisfaction received from consuming
goods and services.
Business Goals
The goal of the financial manager (and firm) is “to maximize shareholder wealth” for publicly
traded firms or “to maximize owner wealth” for privately held companies.
LESSON 03 – THE ROLE OF FINANCE IN BUSINESS ENVIRONMENTS
3 Main Tasks of Financial Managers
• Investment decisions – Deals with what types of assets will be purchased to help the
company grow or add value.
• Financing decisions – Deals with what type of financing capital will be used to
finance new assets or new projects for the company. E.g.: Issue new stocks (equity)
or new bonds (debt).
• Managing working capital – Deals with the day-to-day operations of the firm, from
how much inventory to keep on hand, when to pay suppliers, or how to collect on
credit from customers.
Careers in Finance
• Corporate Finance
Investing and financing decisions, cash management, tax strategies, and financial
policy implementation.
2
, • Financial Analyst – Manage financial reports, provide analysis to make
strategic decisions.
• CFO – Responsible for all the financial decisions made by the firm.
• Investment Banking
Perform merger and acquisitions, corporate offerings, sales and trading.
• Investment Banking Analyst – Perform financial analyses of companies, do
administrative tasks, and create presentations called pitch books for meeting
with potential clients.
• Investment Banking Associate – Similar responsibilities as an analyst.
Sometimes work directly with clients.
• Senior Bankers – Vice presidents and managing directors source deals and
maintain relationship with clients.
• Private Equity
Deals with investments in firms that are privately held and whose ownership is not
yet bought or sold on public stock exchange.
• Angel Investors and Venture Capitalists – Does not typically work for a firm.
Invest their own money in start-up firms or new firms that hope to grow
quickly and then have a “harvest”.
▪ Harvest – Event where shareholders can receive a return on their
investment by an initial public offering (IPO) on a public stock
exchange. Or through a buyout (acquisition) by another firm or
financial institution.
• Analyst and Associate – Determine which deals to fund, evaluate potential
investment opportunities, source deals.
• Managing Partner – Highest level of leadership at PE companies and venture
firms.
• Commercial Banking
Financial institution that accepts deposits; offers checking and savings accounts and
other basic financing products; and extends various loans (car loan, home
mortgages).
• Teller – Interacts with customers at the bank’s front desk.
• Credit Analyst – Assets riskiness of lending to borrowers and whether loans
should be extended to potential bank clients.
• Personal Bankers – Responsible to find and attract new clients, both
depositors and borrowers.
• Management – Highest career level at commercial banks.
• Financial Planning
3
