Finance is a term used to describe a discipline that deals with the management of money and assets. Its origin is French, but it has now found a permanent place in the English language. Its main goal is to ensure that businesses operate efficiently and profitably. Finance is also an academic discipline that is structured around the study of economics.
The scope and nature of business activities determine the amount of finance required by a business. While every business unit has different needs, they all need funds for working capital and investment. A business will also need finance to purchase fixed assets and implement new technologies. It is also necessary to recruit employees to help the business achieve its goals.
The field of finance involves raising funds from investors and investing them in order to generate profit. It also deals with various types of financial accounting that will help a business manage its finances. Dougal and Guthman define finance as the systematic management of financial resources. It includes procurement of money, accounting, funds utilization, and repayment. This discipline is the backbone of business. Without money, a business will not be able to operate.
Finance is used to plan and manage growth and expansion programs. It is also used to decide whether to invest in new products or introduce new technologies. Investments in new technologies will result in replacement of machinery and the introduction of new product lines. In addition, the use of new technologies will improve a company’s reach and cost-effectiveness. Financial planning reduces uncertainty and helps a firm grow. It can also help a firm update existing production infrastructure.
