Finance is the fund that is raised and spent on numerous expenditures. Contemplating broad term activities that are associated with money, banking, leverage, debit, credit, capital markets, investments can be categorized as finance.
The process of acquiring funds and their proper allocation in investments is known as money management. The basic concepts of finance originate from macroeconomic and microeconomic.
Finance involves the management of funds of an organization that is to be used in the operation of various activities of the organization. A finance manager of a corporation administers the number of funds that are to be allocated to different departments of the corporation.
The financial manager of a company performs functions such as planning, investing, and raising funds also known as financing.
Financial Services are the activities by which consumers and different organizations acquire financial goods. This sector forms a basis for economic growth.
The need for finance is apparent for every organization is it a small, medium or big firm including the government entity thus the funding can be procured through the following modes :
Personal finance can be termed as the available resources of an individual. The current financial position of an individual is determined for formulating different strategies for the needs of the individual as a whole is it a person or an entity.
Personal finance includes activities such as purchasing financial products such as credit cards, debit cards, insurance, mortgages to various types of investments such as buying of securities, raw materials, and other necessities of an entity.
Banking plays a core component of personal finance since individuals can check their savings and the amount of expenditure they incur. Nowadays several mobile payments are considered such as PayPal, google pay, Paytm, etc.
The capital structure of an organization that undergoes various activities for successfully running an organization is known as corporate finance.
Companies receive capital from investors or venture capitalists in exchange for a certain percentage of the ownership of the company.
For the public limited company, the company usually issues shares through an Initial Public Offering (IPO) to raise funds from the investors. In some companies, the board of directors issue shares through certain specifications, which may cater to only a limited number of people.
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The services that a government provides to its citizens affect public finance which includes taxation, spending of funds, budgeting, debt issuance policies, etc.
The central, as well as the state government, closely introspects the allocation of funds in the economy, proper utilization of the resources, distribution of income, and economic stability of the nation. The resources can be acquired from taxation, borrowing of funds from the bank, purchasing securities, borrowing from other nations.
It is the responsibility of the government to ensure financial stability by conducting various social programs. The fiscal responsibility should be done adequately by the government thereby ensuring the financial growth of the nation.
The allocation of funds in an entity should be performed in a satisfactory manner that is the funds that are to be utilized should be determined beforehand by the trained individuals that what amount, where it is to be utilized and when should it be utilized.