Afinancial ratio is defined as a coefficient or percentage calculated from the ratio of two masses. It is based on historical data (past or, in the best case, current) and provides no insight into a company’s future development.
It shows a company’s profitability, cost structure, productivity, solvency, liquidity, and financial balance, among other things.
For what are financial ratios used?
Financial ratios are beneficial for both managers and accountants. They are divided into financial ratios and ratios used to examine the company’s financial balance.
Here are the financial measures that can assess a company’s solvency, financial autonomy, working capital, capital need (WCR), net cash, average trade receivables or payables to suppliers, stock rotation, etc. As a result, these analyses focus primarily on items related to the balance sheet and the ratios used to assess profitability.
The financial ratios used to assess profitability are calculated using elements from the income statement. It contains, for example, commercial margin rate, added value, EBITDA (gross operational surplus), net income, etc.
How do you calculate financial ratios?
This section will review how to estimate and evaluate the most common financial ratios.
Calculated financial ratios from a balance sheet
The key financial ratios calculated from a balance sheet are the financial independence ratio, available liquidity ratio, stable job coverage ratio, and obsolescence ratio.
The ratio of financial independence
The financial independence ratio shows how the company’s financial debt stacks up against its equity. Here is how to figure it out:
Equity / Permanent capital (Permanent capital refers to shareholders’ equity, long-term provisions, and financial debt) = Financial independence ratio
A low ratio might make securing external funding more difficult because it suggests that the company is reliant on the entities that fund it and has little space for maneuvering created by its finances.
The liquidity ratio in general
The general liquidity ratio assesses a firm’s ability to repay short-term loans.
Current assets / Current liabilities are the general liquidity ratio
(Inventories and trade receivables are current assets.) Supplier debts, tax obligations, and societal debts are current liabilities.
When it is more than one, the current assets allow at least the current liabilities to be funded. In the medium term, the corporation can be termed “solvent.”
The consistent job coverage ratio
The steady employment coverage ratio evaluates the coverage rate of long-term assets by liabilities with the same horizon, represented as a percentage.
Permanent capital / Fixed assets (Fixed assets equal to gross fixed assets less depreciation) = Coverage ratio of steady jobs
The stability job coverage ratio must be at least one (100 percent). It is much better if it is higher than this because it signifies the company’s steady resources enable it to create excess cash that may be used to fund the working capital requirement.
The ratio of obsolescence
The obsolescence ratio is a statistic that measures how much a company’s production equipment has worn out.
Net tangible fixed assets / Gross tangible fixed assets = Obsolescence ratio
The closer it gets to one, the more likely the production tool is new. Otherwise, it is a sign of age.
Financial balance analysis
The balance sheet is the foundation for a type of analysis known as “functional analysis” (which requires it to be revised and displayed in the form of an available balance sheet) that allows you to emphasize an essential financial balance represented by the interaction of three variables:
The obsolescence ratio
The obsolescence ratio is how worn out a company’s production equipment is.
Obsolescence ratio = Net tangible fixed assets / Gross tangible fixed assets
The closer it gets to one, the more likely the manufacturing tool is new. Otherwise, it is an indication of growing old.
Analyze the financial situation
The balance sheet is the foundation for a type of analysis called “functional analysis” (which requires it to be amended and displayed in the form of an available balance sheet), which allows you to highlight an essential financial balance represented by the interplay of three variables:
Financial ratios make it feasible to do a financial study of a business, but they should not be the only factors considered. Furthermore, they must be in perfect harmony with the type of activity performed or any unique characteristics a company may have. Finally, the results must be compared through time (business evolution) and space (comparison of rival ratios).
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
We will go through three financial statistics that can help you analyze firms by looking at their stock price, profitability, and risk in the future, using basic examples.
Decision ratio:
Consider living in a city that is a miniature replica of a financial market. You have set your sights on two companies in which to invest. Anne’s bakery is one, while Pierre’s ice cream parlor is the other. To raise money, they each sell stock in their company. Anne wants to build a café and a pastry shop for her store, while Pierre intends to invest in new perfumes and kiosks in numerous swimming pools.
Anne has divided her “Chez Anne” bakery into 1,000 shares, each costing $43. She kept 250 and sold the other 750. There are constant lines to buy her croissants because they are so good. As a result, word got out among investors that the company would make money. As a result, she could sell the 750 shares not just a few months ago, but they are now worth $65.
Pierre, for one, has opted to sell 1,500 shares of his ice cream store “Gelato & Co” for $38 apiece. Because the weather forecast predicts elevated temperatures this summer, investors expect that consumers will eat a lot of ice cream and that the business will thrive. As a result, the glacier’s acts increased to $48.
So, what stocks should you invest in?
Price-to-earnings ratio
When comparing the two companies, the P/E ratio can be helpful. You need to know the company’s earnings per share or net earnings for the last 12 months (earnings after expenses and taxes).
Last year, Anna made a profit of $21,500. She paid taxes of $1,070, manufacturing costs of $4,300, and dividends of $6,400. As a result, the net result is $9,600, resulting in a profit per share of $10. On the other hand, Pierre made $8,040, or $5 per share. The P/E ratio is calculated using the following formula:
The P/E ratio for Anne’s bakery is 6.6 (60/9), while it is 9 (45/5) for the ice cream parlor. The bakery’s lower P/E ratio could indicate one of two things: either the company is inexpensive or a better investment or investors anticipate it will lose value. A more excellent P/E ratio, on the other hand, could indicate that the company is overvalued or that investors anticipate more considerable earnings in the future. As a result, they are willing to pay higher costs presently.
More data should be examined to determine which company will perform better in the future. For the time being, we can compare their results. According to our records, Anne paid out $6,400 in dividends or $6 per share. Pierre gave out somewhat fewer shares, only $4 per share.
The “Chez Anne” bakery would take ten years of dividends to return your investment, whereas Gelato & Co. would take nine years. As a result, you will be able to recoup your funds more rapidly with Pierre. However, we presume that payouts remain constant yearly, which is only possible with bonds.
Debt-to-equity ratio
Divide debt or liability by equity, the total worth of all assets minus all liabilities. The debt ratio is used to calculate a company’s financial leverage. The balance sheet of the company contains this information. We described liabilities and balance sheets in this article if you do not recall them.
Businesses take out loans to expand. It can be a risky bet if its ratio is too high. However, if the ratio is too low, the company’s management may be overly cautious, and you may not earn a high return by not taking chances.
The “Chez Anne” bakery owes $12,000 to the bank. Her equity is $42,000, which is equivalent to the worth of her equipment, building, and everything she owns, less her obligations.
As a result, the debt ratio is 11,500/39,900, or 0.29. This indicates that debt accounts for only a minor portion of the company’s founding. It could take out more loans as a capital-intensive business, such as opening a second location or purchasing more ovens. Anne did an excellent job.
Gelato & Co has a 2.3 debt-to-equity ratio. The danger is substantially greater in Pierre’s case. Debt accounts for over two-thirds of its funding.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
Let us explore different types of home equity loans.
Fixed-rate home equity loans
Fixed-rate loans are comparatively simple. The financial institute or lender provides a lump-sum amount to the potential borrower. This sum must be paid with a settled interest rate over an agreed period. Moreover, monthly payments and interest rates are invariable over the loan duration in this type of loan.
Fixed-rate loans function from 5 to 15 years. Furthermore, the closing cost of this loan is often equivalent to home mortgages.
Should I apply for this loan?
This loan is best for borrowers who require one-time cash. For instance, if you need $40,000 for home maintenance and a $5,000 medical bill. In this case, a total of $45,000 will be lent to you that you would need to pay back with an interest rate.
Home equity line of credit
This type of loan is explained as a form of revolving credit. During this loan, the monthly payments are influenced by variable interest rates and can be borrowed from time to time. The eligibility criteria are based on a particular credit score. You can take out only a specific credit limit on a revolving basis for up to 10 years, also described as a draw period.
Furthermore, if the draw period of 10 years expires, you will enter a repayment period where amortized monthly payments and interest rates are mandated.
Also, the monthly payments will substantially increase when calculated with interest and principal if you had opted for interest-only payments in the draw period.
Cash-out refinance
Cash-out refinance is clearing off an existing mortgage loan with a new loan. This loan is taken out conventionally due to refinancing a mortgage with lower interest or customizable loan terms. This way, the borrower may be able to conserve some money in the future. However, if you increase the loan duration, you may not do so.
In addition, with home equity loans, cash-out refinance usually comes with some costs associated. Plus, it will have higher closing costs than home equity loans.
This loan is suitable for residents who plump for an integrated loan and favor securing a lower interest rate or distinct loan duration. Likewise, homeowners who purchased their home ten years back with a 6% mortgage interest can now benefit from a home equity loan and may have relatively better credit this time. In addition, the homeowner can refinance their mortgage with a 4% interest rate while cashing out.
The Takeaway
A traditional home equity loan is a fixed-term loan lengthened for a stated duration combined with an interest rate, and principal added monthly installments.
They are quoted as first mortgages before home equity loans. A lender advances money to the debtor using their property as collateral in each case. Moreover, both loan types mandate the assessment of borrowers’ financial position and credit score to figure out loan rate, additional fees, and loan length.
Financial risks with home equity loans
Two potential financial setbacks are here if you fail to clear off home equity loans.
Be mindful of paying your monthly installments timely if you do not, you may lose ownership of yourself. This is an alarming consequence since you acquired this loan against your home. You must set aside the settled amount or automate it to avoid unpleasant outcomes.
Do not overlook the significance of planning a budget to attain financial security. It is imperative to arrange for monthly payments of home equity loans beforehand to avert payment surprises and the perils of defaulting on your loan during the repayment term. In addition, consumers who do not leave room for an increase in their repayments with the inclusion of principal and interest rates experience substantial financial drawbacks.
Financial advisers suggest making interest and principal during this period to reduce the potential risk of unaffordable repayments.
What is equity and interest rate?
Equity is the variance between the home’s market value and the remaining balance due on your mortgage. In contrast, the interest rate is the proportion rate used to influence the cost of borrowing money, usually referred to as the portion of the principal loan amount and annual rate.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
Offshoring is the practice of a firm moving a portion of its goods, capital, and activities to another location, usually from its home country to a foreign country. For example, there could be a shift between urban and rural areas within the same country.
In terms of international transfers, the phenomena emerged during the second part of the twentieth century due to economic globalization. In economic terms, we also refer to the globalization of trade.
Reasons for relocation
This move takes place for a variety of strategic reasons. This is a process that should be carefully considered before beginning.
We usually talk about economic reasons: people relocate to nations where labor is cheaper and sometimes more plentiful. However, it could also be a matter of a plan for bringing raw resources together to reduce transportation expenses.
There could be legal implications. This is the case when an activity is transferred to a country where labor legislation is less regulated than in the country of origin.
Finally, technological issues can be highlighted, such as the reunification of a favorable foreign competitiveness cluster to the activity (example of the proximity of Silicon Valley in California, which attracts companies linked to modern technologies).
These factors are brought together under a single expression: the company’s intensified search for competitiveness to develop and maintain itself in an increasingly competitive market.
Let us look at the benefits and drawbacks of outsourcing in more detail.
Benefits of offshoring
Economic and fiscal advantages
They are primarily financial. On a broad scale, it is usually a question of lowering the costs of the operation and maximizing the revenues earned. Employee pay is affected mainly by these savings.
The economy is represented in the payment of a lower salary and the decrease or exemption of employment-related social levies.
Structures built on-site can also be less expensive. This could be when renting a factory, warehouse, or machinery.
The incentive can also be monetary: the host country can provide tax incentives (such as deductions) to the company that establishes and produces jobs. Local taxes may also be less expensive than in the nation of origin (land tax absence)
Legal advantages
Legal interest manifests itself in a variety of ways. In the event of a transfer abroad, the company’s contracts with local employees are governed by the destination country’s laws. Some countries’ legislation is more stringent than others. Employers view French labor rules as highly restrictive. As a result, offshoring might be a component of “labor flexibility.”
Relocation might relieve an employer’s obligations to its employees and day-to-day management (no URSSAF declaration, for example).
Another example of a company’s interest in legal matters is the possibility of relocating its operations to a country with lower environmental rules for factories.
Disadvantages of offshoring
Lowering costs can mean sacrificing quality. Less skilled and strict personnel might also lower the product’s traditional standards, which consumers know and enjoy.
Because of the multitude of mediators working from the production to the consumer market, there are increased dangers associated with counterfeiting products when the operation is transferred to a foreign country.
Furthermore, all modes of transportation carry hazards such as loss of products, material damage, delays, etc. This is especially crucial because the relocation occurs in a country far from the consumer market.
Finally, a relocation policy can lead a company’s brand image to be questioned. Using low-cost imported labor rather than job development in the nation of origin can spark intense arguments among civil society members.
Risks related to the location of the relocated company
The offshore system pays scant attention to structural considerations. Most countries that host outsourced activities are plagued by different instabilities that threaten the company’s growth and the success of its initiatives. The current restrictions make it impossible to assure that the relocated company is protected against counterfeiting dangers. Some countries lack the necessary infrastructure to enable the realization of specific projects. The problem with infrastructure is not just about weak transportation networks but also logistics.
Offshoring does not always guarantee project success. There are numerous risk factors. Therefore, it is necessary to establish a severe and detailed plan.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
Before we begin trading, it is worthwhile to grasp a few currency market secrets that can assist you in making reasonable judgments.
What is the definition of leverage? How does leverage operate, and how can it be used to reduce risk?
In today’s essay, we will answer these and other questions.
Leverage – what is it?
Understanding the processes that regulate the world of money is essential for successful investment in financial markets. Leverage, which is frequently utilized in long-term contracts, is one of the elements that every stock market investor must understand.
Leverage, sometimes known as a lever, is a tool that allows an investor to invest far more money than he possesses. Why is it that way?
How to use leverage?
In practice, investing with a lever entails taking out a loan. When considering employing leverage, keep in mind that it is a method of investing with multiple equities.
In other words, a leveraged investment of 1: 100 indicates that after investing, say, PLN 1,000 on the investment, you will invest PLN 100,000. (1,000 x 100).
Leverage is used to magnify earnings, but it is essential to remember that it is also a double-edged sword since losses will be magnified. You may play on the stock exchange with a small amount of money, thanks to financial leverage. In the lack of such a tool, the investor would be required to put his own money into the investment, withdraw from it, or reduce it. You will need a security deposit if you wish to utilize leverage.
Several criteria determine the security deposit amount—the nature of a financial product, market demand, and a broker’s restrictions.
The most significant advantage of leveraging is opening more trades than you could with your own money. At the same time, the investment amounts do not have to be as little as they would be if the investor did not have access to leverage.
How to reduce risk by using leverage?
A lever is an instrument with enormous strength. It can influence both growing earnings and the investment’s failure.
The key to success is gaining experience and acquiring the necessary information.
A thorough financial analysis and the formation of findings and solutions will aid in averting a catastrophic event.
Beginning investors are frequently successful in the market, while experienced investors occasionally make poor selections. Why is it that way?
A beginner investor evaluates the market, prospective losses, and earnings before making a choice. A seasoned investor may be too quick to treat investments, which might be a mistake.
The financial market is exciting, but only for those new to it. People with much expertise realize that emotions are not a good advisor; thus, they frequently utilize an automatic stop loss.
A stop loss is a computerized order that closes out trades if they lose a certain amount of money. The order is activated when the price hits the level indicated in this order.
This is an order that will assist you in safeguarding your assets. It may also be used to conserve profits produced at the same time. It is enough to set them up to switch on when the break-even threshold (for buy orders) or the entry price (for sell orders) is exceeded.
The take-profit order is another tool that may be used to preserve assets. It is a type of sub-order that will finish a trade after a profit ceiling has been reached. By placing a take-profit order, the trader gains the ability to monitor his holdings during the trading session closely. The trade is instantly closed thanks to the take-profit order.
The trader can limit losses by using stop loss and taking profit orders, but only if the values used in the orders are not random and are the result of expertise and comprehensive market analysis.
You must analyze every transaction independently to assess each order’s level precisely. This helps you to minimize losses and earn the best potential profit.
The benefit of leverage is the capacity to turn capital bigger than the initial capital and the opportunity to acquire access to financial markets that would otherwise be closed to you if you invested your own money. However, it is essential to remember that the prospect of higher gains also entails the chance of higher losses. This is not to say that utilizing the lever is not worthwhile; it requires competence and a thorough examination of all relevant facts.
Skillful study of available data, diversification of orders so that all available money is not invested in a single transaction, and constant improvement of qualifications are all ways to strengthen your financial security.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
When resources are required to maintain the business’s operational tasks that create revenue, this issue rises to the top of the agenda. Companies are considering outsourcing under these circumstances.
During fortunate economic periods, few firms think about how to streamline their business operations; that issue is only brought to the forefront when resources are required to support the operational initiatives that generate revenue. It is at these times that businesses consider outsourcing.
It is impossible to properly split the market into those who gain from outsourcing and those who do not due to the uniqueness of each business. This issue must be tackled with a calculator in each scenario, considering that the advantage is not limited to cost savings.
Freedom from Routine and Temporary Tasks
To avoid falling behind, businesses should concentrate on gaining competitive advantages. However, in addition to this primary objective, employees typically have a lengthy list of mundane obligatory chores that have no direct impact on profitability. Is using highly compensated IT staff’s time to perform routine maintenance on printers, laptops, and other IT infrastructure components worthwhile? Outsource fewer essential jobs to free up your IT employees to focus on developing and deploying products to help your company become more competitive.
Outsourcing is also in demand when episodic work is required, such as when a company expands. Designing, constructing, and commissioning IT and engineering infrastructure at a new branch (store, bank branch, etc.) is essential. Companies can avoid the costs of recruiting, maintaining, and training temporary employees through outsourcing.
Getting Rid of Multiple Duplications of Non-core Functions
Because of the country’s geographical characteristics, most significant enterprises in Russia have a complex structure with many branches and subsidiaries. Standard business processes (accounting, document management, technical support) are necessary to assure the survival of these regionally scattered divisions, which are repeated several times depending on the number of regions where the organization is represented. As a result, the expenses of maintaining these processes are doubled.
Outsourcing a single service center (SSC), accounting functions might be centralized. Capital investments are unnecessary for this instance, and modern information technologies offer limitless options for supervising the outsourcer.
Outsourcing also allows for centralizing technical support operations for a globally dispersed telecom, IT, and engineering infrastructure. Companies can avoid the difficulty of maintaining their technical staff in all regions of operation and the cost of operating a large number of contractors by outsourcing these responsibilities to a single service provider across the country.
Implementation of Innovations and Attraction of Highly Qualified Personnel
Not all businesses can afford qualified staff with extensive expertise in their fields. There are few such specialists on the market, particularly in IT, and they are pricey. Few businesses are willing to pay such high expenditures to support non-core business operations, especially when full staffing is not attainable. Unlike internal services, the service provider can conduct work for multiple customers simultaneously, allowing its personnel to make the most of their time. He is also more eager to recruit highly qualified professionals. The primary business for him is doing extra customer chores.
Furthermore, outsourcing is a tool that enables businesses to pursue innovative development. The outsourcing market is no longer confined to essential services and has evolved to include offers that allow clients to obtain innovations. Print outsourcing, transportation monitoring, and control as a service, workstation as a service, and other “Business Solution as a Service” or BSaaS (Business Solution as a Service) packages are examples. The client receives the infrastructure appropriately and with the correct specifications, software, technical support and repair services, and typically long-term staff as part of the BSaaS package. Payments can be made based on ticket, appeal, and monthly membership prices.
Based on this data, the company’s management can forecast costs and decide the fleet’s future development. As a result, the BSaaS customer receives practical tools for achieving business goals without spending money on expensive gear and software. Allowing access to the vehicle surveillance system, the client receives online information regarding the operation of the transport fleet in exchange for a subscription fee.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
Unlocking Success: The Importance of Studying Finance with Economics
Studying finance with economics creates professionals who understand both practical money management and theoretical market dynamics, positioning graduates for careers with median salaries ranging from $80,000 to over $150,000 annually. This powerful educational combination develops analytical thinking, quantitative skills, and strategic decision-making abilities that employers value across banking, consulting, government, and corporate sectors.
I’ve spent over twenty years as CEO of Complete Controller working with businesses across every sector imaginable, and the pattern is unmistakable—the most successful financial professionals aren’t just number-crunchers. They’re strategic thinkers who connect financial data to economic trends, understand how policy changes impact cash flow, and anticipate market shifts before they happen. That’s exactly what studying finance with economics delivers, and in this article, you’ll discover how this combination opens doors to lucrative careers, builds resilience against economic uncertainty (with double majors experiencing 56% protection against earnings shocks), and creates the versatile skill set that modern businesses desperately need.
Why should you consider studying finance with economics?
Studying finance with economics builds versatile professionals who master both micro-level financial management and macro-level economic forces
Finance education provides practical skills like financial modeling, investment analysis, and risk management tools
Economics education adds theoretical frameworks for understanding markets, policies, and business cycles
Combined expertise leads to premium salaries, with corporate economists earning up to $153,490 annually
Career flexibility expands dramatically across financial management, economic research, policy analysis, and corporate strategy
The Strategic Advantage of Combining Finance with Economics Education
Finance and economics create a synergistic educational foundation that addresses critical gaps in traditional business education. Finance students excel at technical analysis but often miss broader economic forces driving market volatility. Economics students develop strong analytical and theoretical skills but may lack practical experience with financial instruments and corporate finance decisions.
When these disciplines merge, students develop both technical competency to execute financial strategies and economic insight to understand why those strategies succeed or fail in different market conditions. The popularity of economics bachelor’s degrees increased by 25% over the past decade, rising from 27,623 graduates in 2010 to 34,636 in 2021, signaling growing recognition of these valuable analytical skills.
Building comprehensive analytical skills
The analytical rigor required for both finance and economics creates professionals with exceptional problem-solving capabilities. Economics courses develop skills in:
Data interpretation and statistical analysis
Theoretical modeling and causal relationships
Market mechanisms and policy impact assessment
Research methodology and econometric techniques
Finance courses complement these with practical applications including:
Portfolio management and optimization
Capital budgeting and project evaluation
Financial statement analysis
Risk assessment and return calculation
This dual foundation enables graduates to conduct comprehensive analyses considering both immediate financial implications and longer-term economic consequences. Research shows that economics has transformed from representing only 3.5% of second majors in 2001 to 4.6% by 2014, demonstrating how students increasingly view economics as valuable complement to other disciplines.
High-Demand Career Opportunities in Finance and Economics
Career opportunities for graduates combining finance and economics reflect exceptional earning potential and diverse pathways. Financial managers with combined expertise earn median salaries of $156,100 annually, with 16% projected growth through 2032. Securities traders leveraging both financial analysis and economic forecasting command median salaries of $188,000.
Corporate economists represent the highest-paid professionals, with salaries reaching $153,490 annually at senior levels. These roles specifically require translating macroeconomic trends into actionable business strategies, analyzing market conditions, and providing guidance that influences major corporate decisions.
Emerging roles in financial technology
Financial services transformation through technology creates new opportunities for professionals with interdisciplinary expertise:
Fintech Engineers: $110,000-$170,000 annually
Develop products within regulatory and market frameworks
Combine user financial needs with economic insights
Design scalable solutions for digital finance platforms
Quantitative Analysts: $70,000-$300,000+ annually
Apply mathematical methods to financial problems
Build predictive models using economic principles
Optimize trading strategies and risk management
Data Scientists in Finance: Median $108,020 (35% growth projected)
Analyze vast datasets for trend identification
Develop risk assessment models
Create predictive analytics for investment decisions
Essential Skills Through Combined Study
Studying finance with economics develops unique competencies that single-discipline programs cannot match. At the University of California Santa Cruz, students who met GPA thresholds to study economics saw wages increase by almost 50% compared to those who didn’t qualify, demonstrating concrete skill value.
Financial planning and analysis skills become sophisticated when combined with economic understanding. Professionals move beyond basic budgeting to create dynamic models accounting for economic scenarios, policy changes, and market cycles. Business partnering skills—critical for 2025 finance professionals—strengthen significantly through economics education.
Quantitative and communication excellence
Combined study develops both technical and soft skills essential for career success:
Technical Skills:
Statistical analysis and econometric modeling
Financial mathematics and valuation techniques
Risk assessment across multiple dimensions
Data visualization and interpretation
Communication Skills:
Translating complex concepts for diverse audiences
Bridging technical analysis with strategic recommendations
Presenting financial data within economic context
Influencing stakeholders across organizations
Educational Pathways for Finance and Economics
Universities recognize the value of interdisciplinary education through various program structures. The University of Colorado Denver offers an M.A. Economics/M.S. Finance dual degree requiring 42 credit hours—more efficient than pursuing separate degrees. Manhattan University’s double major in Economics and Finance earned CFA Institute recognition, incorporating 70% of the CFA Program Candidate Body of Knowledge.
Barcelona School of Economics exemplifies specialized programs integrating both disciplines, focusing on modeling techniques, econometric tools, and coding skills for banking, consulting, and fintech positions. These programs align with industry demands for professionals who understand both financial mechanics and economic principles.
Professional certification integration
Combined education creates advantages for professional certifications:
CFA (Chartered Financial Analyst): Economics coursework covers exam topics including monetary policy and international economics
CMT (Chartered Market Technician): Benefits from economic cycle understanding
CAIA (Chartered Alternative Investment Analyst): Combines alternative investment knowledge with economic analysis
Real-World Success Stories
Amanda Lynam, CPA and Head of Macro Credit Research at BlackRock, exemplifies career success through combined expertise. She earned dual degrees in Accounting and Economics from Villanova University in 2004, spent 16 years at Goldman Sachs, then joined BlackRock leading research across global fixed income and alternative markets.
Management consulting firms value this combination highly. McKinsey, BCG, and Bain recruit professionals with finance and economics backgrounds for strategy roles starting at $165,000-$185,000 annually. These consultants navigate complex challenges requiring detailed financial modeling and economic analysis of industry trends.
Corporate development excellence
Technology companies employ professionals with combined expertise for corporate development roles exceeding $150,000 annually. These positions evaluate acquisitions using financial valuation techniques and economic analysis of market dynamics, competitive positioning, and regulatory environments.
Private equity and venture capital firms seek investment professionals who evaluate portfolio companies through both financial metrics and market assessment. Senior professionals earn total compensation exceeding $300,000 annually, reflecting sophisticated analytical capabilities valued by these firms.
Future-Proofing Your Career
The job market outlook remains exceptionally strong for combined finance and economics expertise. Artificial intelligence augments rather than replaces these professionals, enabling sophisticated analysis and strategic decision-making. Technology enhances capabilities for interpreting market signals and developing strategies accounting for technical indicators and fundamental factors.
Environmental, social, and governance (ESG) investing represents rapid growth areas. Sustainable finance professionals must understand traditional analysis techniques and economic implications of environmental policies. Climate finance specifically requires assessing financial risks and opportunities while understanding policy impacts on markets.
Digital finance evolution
Continued financial services digitization creates opportunities across:
Cryptocurrency and Blockchain: Analyzing technical implications and monetary system effects
Regulatory Technology: Navigating compliance while maintaining operational efficiency
Open Banking: Understanding user needs within regulatory frameworks
Embedded Finance: Integrating financial services into non-financial platforms
These roles require both technical finance knowledge and economic understanding of market structures, regulatory rationale, and consumer behavior patterns.
Final Thoughts
The decision to study finance with economics positions you for exceptional career success in our complex business environment. This combination delivers technical skills for financial analysis and broader frameworks for strategic decision-making, creating opportunities with outstanding growth potential and earning power.
Throughout my journey building Complete Controller, I’ve witnessed how the most impactful financial professionals think strategically about economic forces shaping business opportunities. They don’t just manage numbers—they anticipate changes, identify opportunities, and guide organizations through uncertainty with confidence.
Whether pursuing corporate finance, investment management, consulting, or entrepreneurship, this interdisciplinary foundation provides the analytical rigor and strategic perspective employers value most. For serious students building financial careers, combining these disciplines creates competitive advantages that compound throughout your professional journey.
Ready to leverage expert financial and economic insights for your business? Contact the professionals at Complete Controller to discover how our team applies combined expertise to help businesses navigate complex challenges and achieve sustainable growth.
Frequently Asked Questions About Studying Finance with Economics
What specific job titles should I target with a combined finance and economics background?
Target roles like Financial Analyst ($99,890 median), Corporate Economist ($153,490), Investment Banking Analyst ($100,000+), Management Consultant ($165,000+), Risk Manager ($131,300), or Portfolio Manager ($141,850). Each leverages both skill sets for strategic decision-making.
How long does it take to complete a dual degree in finance and economics?
Dual master’s programs typically require 42-48 credit hours, completing in 18-24 months full-time. Undergraduate double majors add 30-40 credits beyond single majors, extending graduation by 1-2 semesters depending on course overlap.
Which skills from economics complement finance careers most directly?
Do employers prefer candidates with double majors or graduate degrees in both fields?
Both paths offer advantages—double majors demonstrate early commitment to interdisciplinary learning while graduate degrees provide deeper expertise. Employers value either, focusing more on demonstrated analytical abilities and practical application skills.
What entry-level salaries can I expect with combined finance and economics education?
Entry-level salaries range from $65,000-$85,000 for analyst positions, $75,000-$100,000 for corporate finance roles, and $90,000-$165,000 for investment banking or consulting positions, depending on location, firm size, and specific role requirements.
CFA Institute. (2024). “University Recognition Program Guidelines.” cfainstitute.org
Hanks, A.S., Jiang, S., Qian, X., Wang, B., & Weinberg, B.A. (2024). “Do Double Majors Face Less Risk? An Analysis of Human Capital Diversification.” National Bureau of Economic Research Working Paper 32095.
Yale School of Management. (2024). “Finance and Economics Career Paths.” yale.edu
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
Jennifer BrazerFounder/CEO
Jennifer is the author of From Cubicle to Cloud and Founder/CEO of Complete Controller, a pioneering financial services firm that helps entrepreneurs break free of traditional constraints and scale their businesses to new heights.
Brittany McMillen is a seasoned Marketing Manager with a sharp eye for strategy and storytelling. With a background in digital marketing, brand development, and customer engagement, she brings a results-driven mindset to every project. Brittany specializes in crafting compelling content and optimizing user experiences that convert. When she’s not reviewing content, she’s exploring the latest marketing trends or championing small business success.
There are many ways to plan a career. There is also a problem, it is to know at which stage you are at first, are you a school student seeking to decide which field to choose, or you have got admission at the college and want to pursue the most earning career in it or easiest? Or you are in the mood to change your field through some expertise you must make in different job experiences. Knowing which place you are and then moving is essential; this blog will help you decide how to go through the long, arduous process.
Are you finding it challenging to locate a job that matches your personality and interests? Take a quiz to find out which job might be right for you. Begin at the beginning – with yourself.
We all want to find an excellent job by picking the proper profession. “Find a job you adore, and you’ll never have to work ever again in your life,” as the saying goes. It enlightens something that most of us aspire to. It also puts a lot of pressure on those who are trying to figure out what we desire to do with our lives. Is it feasible to find a career that you enjoy enough that it no longer feels like employment?
Is it possible to find a good job by choosing the right career?
Probably most of us will have days when we do not want to work. Regardless of how much effort we spend looking for a decent job and selecting the correct career. There will be days when you feel forced to do that task even if you are not compensated. The trick is to pick a job with many lovely days above those that aren’t so wonderful.
With all these occupations to select from, there are several things to keep in mind to maximize your possibilities of finding a rewarding job. Find a job that fits your interests, aptitude, personality, attributes, and values. It’s also crucial that you enjoy your work tasks, that your wage is fair, that your job prospects are promising, and that the corporate culture is appropriate.
By picking the correct career here, you may find more advice on finding a decent job.
Get to know yourself
First, you should learn as much as possible about yourself by spending some time doing a self-assessment. Only when you have a greater understanding of yourself can you successfully explore careers based on what you come up with.
Learn more about different professions and careers
After completing a self-assessment, some of the occupations you discover may be ideal for you, while others may be entirely inappropriate. Another list of alternative occupations and jobs that may suit you based on numerous variables such as personality is sometimes included in the findings of a self-assessment. However, picking the right career or finding suitable employment is only the beginning.
Many different criteria must agree
Certain occupations may appear to be a good fit based on your type of personality, hobbies, and values, but they may be incompatible in other ways. The tasks may be unappealing to you. Or that the work market’s prospects may be bleak. It’s also possible that the requisite training will take more time and effort than you’re willing to devote.
Investigate several career opportunities
Assure you’re making an informed selection by thoroughly researching each career option. Read position descriptions for various occupations carefully and attempt to get over any preconceived preconceptions you may have. If you do not have professional experience before beginning your review, you will have more to learn until you can obtain a promising career.
Find out if you meet the requirements
Again, if you’re interested in specific vocations after doing additional research on them, the following stage is to determine the training requirements. Suppose you need an academic education to grow in your career but cannot obtain one. Then you should probably avoid that profession. Make sure your resume’s standards are met.
Examine the prospects for jobs in the future
When you don’t investigate what a given career offers in terms of job possibilities, you’re doing yourself a disservice. Whether the competition is considered modest or high, and where it takes place. It’s not fun to devote time to studying for a vocation and career to discover that competition is fierce and that unemployment inside the profession is significant. Decide right away!
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
Many people think of a cheap newlywed’s dinner as a dining hall on the outskirts of town with unpretentious costumes, “a la local market,” a small number of guests, and not the best banquet food. So, let’s try to dispel some of these myths.
Its soul poured into the wedding’s planning, the newlyweds’ organizers’ inventiveness, and the desire of family and friends to assist in the preparations are the main prerequisites for a memorable celebration. Examine the wedding’s estimated costs. Establish a business plan for both a low-cost and a high-cost alternative. Using the services of an event firm to plan a celebration will be significantly more expensive than planning a wedding on your own.
American style – an option for an inexpensive wedding
One way to save money is to choose an appropriate wedding theme: the rustic design is trendy. A low-cost celebration will require you to “work,” but the effort will be worthwhile. Buffet in the woods is a fun event; choose the newlyweds attire that matches the wedding theme; construct your wedding flowers and decorations, and consider the holiday situation.
Departure to nature – an economical option for a banquet
Getting out into the environment instead of a typical dinner can enable active newlyweds “keep up appearances” at the registry office while also providing independence and the chance to fool around again and enjoy time in a way you want. Leasing a minibus for visitors will be less expensive than booking a restaurant or calling a food service. Offer to assist mothers, sisters, and girlfriends with reception dishes. Men will deal with meat in a dignified manner. It would be best to use photographs and video equipment to capture beautiful moments during a romantic vacation.
Choosing a venue for the celebration
And save money on your wedding, choose a restaurant or cafe for the ceremony. Focus on the following details:
Location. Popular establishments are usually found near the city center. Gatherings, weddings, and the cost of the food served at them are not inexpensive. The cafe’s distance from the city’s center plays right into the hands of couples who like to host a low-cost but high-quality wedding reception.
The name of the marriage restaurant promoted well-known cafes aren’t afraid to include a portion of their “fame” in the price of their services. They frequently provide discounts to entice clients. If you want to save money:
Seek a new, recently launched institution.
Book a dinner in advance after deciding on a cheap wedding venue.
Make a contract outlining the prices for the wedding menu’s dishes.
Wedding conditions. Live music and animators are available in most modern cafes and restaurants. A service like this will be less expensive than hiring outside musicians for a ceremony. You can negotiate the cost of musicians’ assistance with the administration and include a contract clause.
Vacation time. The “down season” for the restaurant industry is generally the end of autumn, winter, and the beginning of spring. If you are preparing for a wedding around this time, you will be eligible for bonuses, promotions, and savings.
How to organize a cheap wedding in nature
Its registration office’s banquet hall. After seeing the solemn painting, have you decided to go on a belated honeymoon? Order a mini buffet in the registry office’s banquet area and make your friends and relatives happy by planning a low-cost marriage. Banquet hall of the registry office – we save on wedding expenses.
Invite a small number of guests
A more significant number of guests means more money. Bosses, distant relatives, and “essential” acquaintances are frequently invited “because it is usual.” If you want to keep the wedding costs down, talk to your future husband about inviting only your closest, dearest friends, who you are usually happy to see.
Reduce the cost of newlyweds’ outfits
Want a bridesmaid dress to rent – this will allow you to save money on this aspect of the wedding budget. Another cost-effective but dangerous option is to order a bachelorette outfit from a foreign or domestic online retailer. In this situation, go with a model you’ve already tried on at a grooming boutique.
How to save money on bridal outfits
The abundance of high-quality yet less expensive shoe options allows you to select shoes that will serve you well in the foreseeable. You will consider your potential savings that some order processing time will fly past. When repurchasing a suit for the groom, think about how your cherished spouse will look on vacation or at work.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
Apply for a personal loan before you purchase a vehicle. Many people instinctively believe that they cannot get financing for their dream vehicle, so they choose to wait until after they save a significant down payment. However, many companies provide appealing and simple deals to finance vehicles even if you can’t offer a large down payment. Moreover, if you put in a relatively lower down payment, you will have to pay higher monthly installments. So, shop around comprehensively and find out where you can apply for financing.
You can avoid hidden charges by borrowing money outside your standard banking system.
Furthermore, do not utilize your credit card for the monthly premiums; the debt will reach the sky if you commit this grave sin. Finally, don’t take out a loan through a third-party lender like a credit card company. Instead, you should investigate getting financing directly from your primary bank.
Additionally, do not simply go to your bank and request funds. Instead, investigate several auto loan choices to see if one suit your budget.
A valuable piece of advice; Determine your goals- Asking queries like “can I afford this?” to potential high-end car buyers isn’t always helpful and can backfire. Instead, before making any significant purchases, take some time to find out precisely what you want. Do you need the most recent version? Are you looking for something practical or entertaining? Do you want to travel swiftly or in style? These types of questions will help you make cost-effective decisions.
Pay off your debt first
It would help if you always attempted to clear off your existing debts before applying for a car loan. For example, before looking into car loans, you should pay off your credit card debt, student loans, and other outstanding debts. Otherwise, you may find yourself paying more interest in the long run.
However, if you haven’t taken out a loan yet, we strongly advise you to do not to fall into debt! Debt is typically connected with poor financial decisions, but you will have no trouble staying out of debt if you plan time.
Make sure you have enough equity
Start paying off your auto loan immediately away if you don’t already have enough money set aside. You may not consider it, but you are losing money if you solely pay interest on a loan.
Furthermore, the Auto loan payment calculator is valuable for calculating payments and determining how much you owe at any given time.
However, if taking out a loan is not on your plate, consider Dealerships. Purchasing a car from a dealership has numerous advantages, but it is not always straightforward. Even if the dealer has a strong reputation, getting authorized for financing takes time. However, if you’re looking for something special, dealerships have a better selection of automobiles that aren’t typically available online.
Make timely payments on your monthly installments
Everyone should make a habit of paying their monthly payments on time. Make sure you pay your payments timely or set up an automated account to avoid paying higher interest. You may wish to use online payment systems; however, make sure that you can track your account at least once a month.
Furthermore, keeping track of your payments is highly imperative. Moreover, monitor your debts, when you last paid, and anything else that can help you keep organized. By doing so, you will know where you stand if you keep track of everything.
Paying cash is preferable if you can afford it
Consider how much money you’ll have after you’ve paid all your other debts and responsibilities. Even if you have sufficient funds now, it is preferable if you can pay for the entire cost (including interest) upfront. If you don’t have this option, save more money in advance instead of paying interest. It is usually not a good option. However, this may be an excellent option if you have enough money and a higher income. It involves purchasing your first automobile.
Golden suggestion: Before purchasing a vehicle, make sure you have sufficient funds. For example, if you want to buy a car for less than $5,000, you should first save some money from your paycheck. Then, you may use this money toward a vehicle that costs less than $1,000.
Nevertheless, your credit score counts significantly; Before applying for financing, you should constantly check your credit score. There are numerous methods to improve it; you must figure out what they are. In addition, you may be eligible for lower interest rates or better terms if you improve your credit score.
Additionally, have your credit score examined at the very least once a year. It assures that you do not fall behind on any payments. The amount of interest you pay each month is influenced by your current balance. Therefore, avoid making extra payments to lessen your monthly payment when paying off a debt with a higher interest rate.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
