Nov 16, 2012
Finance is one of the most important aspects of business management and includes analysis related to the use and acquisition of funds for the enterprise. The Finance major is concerned with the entire process of obtaining the money that organizations need, and spending and investing that money in the most efficient manner.
Finance is the application of economic principles and concepts to business decision making and problem solving. It can also be described as the allocation of assets and liabilities over time under conditions of certainty and uncertainty. A very important aspect in finance is the time value of money, which states that a unit of currency today is worth more than the same unit of currency tomorrow. Finance aims to price assets based on their risk level, and expected rate of return.
Financial institutions and banks are in the business of financing as they provide capital to businesses, consumers and investors to help them achieve their goals.
Financing is the procedure of bringing money into the business. Businesses can be financed in a number of ways, each of which features its own advantages, disadvantages and unique features. Common methods of financing a business include taking on debt and taking advantage of credit arrangements, financing through equity investment or earning income through investment products that bear interest or increase in value.
Finance can be separated in three areas: Personal finance, Corporate finance, and Public finance.
Personal finance is defined as the financial management of which an individual is required to obtain, budget, save, and spend monetary resources over time, taking into account several financial risks and future life events.
Public finance is described as the role of the government in the economy.
Corporate finance refers to the sources of funding and capital structure of corporations as well as the actions taken by managers in order to increase the value of the firm to the shareholders. Moreover, corporate finance involves balancing risk and profitability, while attempting to maximize an entity’s wealth and the value of its stock. Corporate finance scope is business valuation and stock investing.
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