Finance refers to the management of money, assets and liabilities. It is also referred to as the science of financial affairs. A person or an organization needs a large amount of finance for a smooth business operation.
Business finance covers all financial activities that are involved in the running of a business. These include risk management, funding, tax management, and capital budgeting.
Finance is a crucial element of any economy. It is used by governments for various purposes and it is regulated according to predetermined policies. Moreover, money is a legal tender in most transactions.
Finance is also essential in the development of new businesses. Money is required to purchase plant and machinery. In addition, a significant amount of funds is needed to maintain a firm’s long-term stability. The scale of finance required by a business is directly proportional to its size and nature 52av.
Finance is an academic discipline and it is important for individuals and organizations to learn about it. Various aspects of it have been practiced since the advent of currency in different civilisations. However, the scope of this discipline has undergone changes.
Today, finance is a multidisciplinary field of study. Several specialization courses are being conducted to train people in this field.
Finance helps define how money can be spent, how to manage assets and liabilities, how to create a budget, and how to maximize earnings. Moreover, it explains the time value of money. Ultimately, it enables a firm to achieve its objectives.