Finance is an important part of the business that helps in assisting the different processes of the business. It is that field or department in the business settings which deals with the process of investments management. It is that department which deals with the allocation of liabilities and assets over the period of time. We know that every transaction of the business needs cash and finance is simply the flow of cash. It is a simple way of enabling the cash flow in the process of business transactions. When a company or an organization manufactures and produces goods and services in the market, money is generated by the sale of those products and services which the company has produced. Whatever the profit or income that is created from the sale is used to pay the salaries and bonus of the workers, for the manufacturing process in order to produce more goods and services, and for the different administrative expenses of the organizations.
TYPES OF FINANCE
Finance can be divided into three different important subcategories such as corporate finance, personal finance and the public finance.
CORPORATE FINANCE– It is that area of business which deals with the capital structure of the companies and the sources of funding. The foundation of corporate finance is separation of ownership from the management. One of the important purposes of corporate financing is to maximize the value of share holders and the different method to do this is capital budgeting, capital sources, etc.
PERSONAL FINANCE:-It is all the financial decision of the individual or the households which includes budget planning, insurance planning, retirement planning, health planning, etc. It helps the individual to know their current positions and accordingly plan for the future.
PUBLIC FINANCE: – The process of regular funding from the government is secured through the process of taxation. The government helps the organization to secure themselves from the failure of the market by timely allocating the vital resources and the distribution of the income. In order to fulfill the needs, demands and requirements of the customers the organizations takes financial the help from the government in the form of loan, such as borrowing from the banks, getting aids and grants, etc. This type of services from the government to the organizations helps the government in generation cash as the government charges interest at the time of lending the money. Revenues from fees, licenses, fines for breaking the law, etc are also common example of public finance.