Finance Assignment Solution

INTRODUCTION

Business concern needs finance to meet their requirements in the economic world. Any kind of business activity depends on the finance. Hence, it is called as lifeblood of business organization. Whether the business concerns are big or small, they need finance to fulfil their business activities. In the modern world, all the activities are concerned with the economic activities and very particular to earning profit through any venture or activities. The entire business activities are directly related with making profit. (According to the economics concept of factors of production, rent given to landlord, wage given to labour, interest given to capital and profit given to shareholders or proprietors), a business concern needs finance to meet all the requirements. Hence finance may be called as capital, investment, fund etc., but each term is having different meanings and unique characters. Increasing the profit is the main aim of any kind of economic activity.

MEANING OF FINANCE

Finance may be defined as the art and science of managing money. It includes financial service and financial instruments. Finance also is referred as the provision of money at the time when it is needed.

DEFINITION OF FINANCE

According to Khan and Jain, “Finance is the art and science of managing money”.

TYPES OF FINANCE

Finance is one of the important and integral part of business concerns, hence, it plays a major role in every part of the business activities. It is used in all the area of the activities under the different names.

Finance can be classified into two major parts:

  • Private Finance, which includes the Individual, Firms, Business or Corporate Financial activities to meet the requirements.
  • Public Finance which concerns with revenue and disbursement of Government such as Central Government, State Government and Semi-Government Financial matters.

 

DEFINITION OF FINANCIAL MANAGEMENT

Financial management is an integral part of overall management. It is concerned with the duties of the financial managers in the business firm.

It is concerned with:

  1. Acquisition
  2. Financing
  3. Management
  •  It is a business assets in order to maximize the wealth of the firm for its owners.
  • It is that part of management activity which is concerned with planning and controlling of financial resources.
  • This is the business management function that is concerned with managing a business’ finances.
  • It refers to the application of financial management tools and techniques to coordinate all the financial functions in the business.
  • Thus, Financial Management is mainly concerned with the effective funds management in the business. In simple words, Financial Management as practiced by business firms can be called as Corporation Finance or Business Finance.

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