Wednesday 27 January 2016

Finance - A goal without a plan is just a wish.

FINANCE


Finance is a task concerned with cash and providing the necessary money required by the business of entities like companies, firms, individuals and others on the terms that are most favorable to achieve their economic objectives. 

Talking about the finance history. there is evidence to prove that it is as old as human life in the earth.The word finance derived form the french word in the 18 th century.

 
Individual,businesses and government entities all need funding to operate, the field is often separated into 3 categories :
                          
                          1. Personal finance
                          2. Corporate finance
                          3. Public finance

Personal finance: It is a decision of an individual or family unit budget,save and spend monetary resources over time.

Corporate finance : Activities related to running a corporation.Department that oversee the financial activities of a company.

Public finance: is the study of the income and expenditure of the state.It deals only withthe finances of the government and it scope is to collection of the funds. 


The main purpose of finance - Different sources of finance have different implication for a business, so it is important that the most appropriate method of finance is chosen for the purpose that the business has in mind.

Time periods for finance :
  • Short term
  •  Medium term
  •  Long   term
 
1. Short term  needed for the day-to-day running of a business and usually for a period of upto 3years.
    

2. Medium term is normally thought of as being for between 3-10 years.


   

3.Long term -over is usually though of as being for periods in excess of 10 years. finance is for securing the resources for long term growth.



 
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