Introduction to Finance

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Finance can be defined as the science & art of managing money. It includes activities like investing, lending, saving, borrowing, budgeting & forecasting. To finance is to provide money for the business.
There are 3 types of finance: 
  1. Personal Finance
  2. Corporate Finance
  3. Public/Government Finance
But financing decisions are taken in 2 contexts: 
1.Personal Context                              2.Business/Corporate Context

In Personal context, it is related to decisions about:
  • What proportion of earnings to be spent
  • What proportion of earnings to be saved
  • How much of savings to be invested
In Business context, it is related to decisions about:
  • How much funds to be raised
  • From which source should the funds be raised
  • Considering the cost of capital (i.e. expected rate of return)
  • In which project should the firm invest
  • Wealth maximization (i.e. higher ROE) which ensures efficiency of management
Sometimes people confuse accounting with finance, but finance is a broader concept in management & starts where accounting ends.
Accounting is the preparation of financial statements ie Income Statement, Balance Sheet & Cashflow Statement. It mainly focuses on the flow of money & profits of the business while, 
Finance is the art of managing money & taking decisions of investment by forecasting the potential returns.
Basic financial management includes managing the day-to-day operations of a business and keeping within budget. It also includes making long-term investments in equipment and obtaining the financing for your operations. 

 To learn finance one must possess analytical skills.

This was just the basic and beginner level finance, to know more you can check more pages of this blog.

Comments

  1. UnknownApril 3, 2020 at 10:46 PM

    I'm not a finance student bur the contents are very good. Really helpful to any people who want to gain knowledge.

    Keep it up 👍

    ReplyDelete
  2. UnknownApril 18, 2020 at 12:26 AM

    This is really helpful. Thank you

    ReplyDelete
  3. UnknownApril 18, 2020 at 12:27 AM

    I read your article about finance ..As I am not a finance background student but after read whole of your articles I can understand the content easily..
    It is beneficial for the not only finance students also those who wants to know something about the finance....
    Keep it up...

    ReplyDelete
    Replies
    1. Finance ChhatraApril 18, 2020 at 12:34 AM

      Thank you for sharing the positive response. Will write more on such topics.

      Delete
  4. UnknownApril 18, 2020 at 12:29 AM

    Good

    ReplyDelete
  5. Finance ChhatraApril 18, 2020 at 12:30 AM

    Thank you everyone for your positive responses. This keeps me motivated to write more thanks a lot.

    ReplyDelete
  6. UnknownApril 18, 2020 at 12:49 AM

    Very well explained.... For finance very maim things to get clear is the basics about the start and that is explained so good..👍

    ReplyDelete
  7. Saloni GuptaApril 18, 2020 at 3:04 AM

    Grt going.. keep up the spirit

    ReplyDelete
    Replies
    1. Finance ChhatraApril 18, 2020 at 3:55 AM

      Thanks for sharing your feedback...glad to hear from you..

      Delete
  8. Finance ChhatraApril 18, 2020 at 3:54 AM

    Thnk you... ��

    ReplyDelete
  9. Harsh GuptaApril 18, 2020 at 12:31 PM

    Very well written about finance in small words.

    ReplyDelete
  10. UnknownApril 18, 2020 at 9:45 PM

    Well done 👍
    The content are good and very helpful

    ReplyDelete
  11. UnknownApril 19, 2020 at 4:56 AM

    Nice initiative

    ReplyDelete
  12. UnknownApril 20, 2020 at 12:42 AM

    👌👌

    ReplyDelete
  13. SmithApril 20, 2020 at 6:12 AM

    Hey!!
    You are writing great and good posts.This helped me in my assignment...keep it up..

    ReplyDelete
  14. UnknownApril 20, 2020 at 10:55 PM

    Knowledge blog keep it up and waiting for more blog like this.

    ReplyDelete
  15. AnonymousApril 21, 2020 at 2:12 AM

    Good...great learning..thnks for clearing my basics and doubts

    ReplyDelete

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