Business Finance_1

• Business


  A business is an entity in which the skills, energy, and enterprise of owners and partners are linked with money, its sources, and investment, and its success is measured by the wealth, or profit the business gets.
• Finance


  Finance is needed to establish a business to run it to modernize it to expand or diversify. It is required for buying of assets. It is helpful to managers and potential managers to make sensible investment and financing decisions.
• Areas of Business Finance

  • Corporate Finance
  • Financial institutions and markets
  • Investments
• Corporate Finance


  Deals with the management of the companies
• Investments

  Deciding for the best portfolio of the assets
• Major Financial Decisions for the Business

  • Financing Decisions
  • Investment Decisions
• Financing Decision


  Involve generating funds internally or from external sources. Funds

  may be generated externally

  from borrowing and by

  issuing debt or equity

  securities.
• Investment Decision


  These assets generate the cash flows that are needed to meet operating expenses, pay interest to creditors, taxes to the government and dividends to stockholders.
• Major Functions of a Financial Manager

  1. Raising of Funds
  2. Allocation of funds
  3. Profit Planning
  4. Understanding Capital Market
• Various Financial Institutions and their Services

  • Central Bank
  • Commercial Banks
  • Credit Cooperatives
  • Savings and Loan Association
  • Investments Banks and Companies
  • Insurance Companies
  • Mortgage Companies