Finance is a term that describes the management of money, investments and credit. It is a discipline that includes both scientific and non-scientific elements 52av.
The financial system is comprised of various financial institutions that provide specialized financing to businesses. Financial intermediaries include banks, insurance companies, savings and loan associations and investment companies.
There are three main areas of finance: Corporate, Public and Personal. Each has its own specialized standards and procedures.
Corporate finance involves the activities related to the running of a corporation. These activities involve budgeting, managing assets, managing liabilities, and taxing. In addition, it is used to increase the value of shares and the company itself.
Personal finance involves the study and management of money, savings, and debts. This activity is also referred to as personal budgeting. When an individual needs funds for business, he or she may seek a bank loan or sell equity.
Public finance is a subcategory of finance that covers the government’s expenditures and taxes. Some of the other activities covered by public finance include budgeting and tax systems 52av.
Public finance also focuses on long-term investment decisions for the government. Governments use loans to meet deficits and fund expenditures. Other sources of public finance include fees and gifts.
Corporate finance focuses on maximizing the value of shares through strategic financial planning. It is based on economic theory and statistical data.
One of the major theories in finance is the time value of money. Often, the time value of money is reflected in the interest rates that investors pay.
