what is finance? in easy way

what is finance? finance is all about the allocation and management of money and includes activities such as investing, borrowing, lending budgeting, saving, and forecasting

how anyone allocate their money different things and manage them for earning, saving and expending

what is finance? in easy way

Types of finance ?

Finance is mainly divided into three segment.

Personal finance

personal finance is specifically related with the individuals and the strategies depend on the individuals earning potential. personal finance is managing and allocating the money or funds of an individuals to achieve the desired goals in terms of saving and investment. personal finance includes investment in education assets like real estate, health expense etc.

  • protection against unforeseen and uncertain personal events.
  • preparing for long term expenses or purchases involving a huge amount
  • paying for a loan or debt obligation
  • investment and wealth accumulation goals.
  • preparing for retirement etc.

Corporate Finance

corporate finance is about funding the companys expenses and building the capital structure of the company.it deals with the source of funds and the channelization of those funds like the allocation of funds for resources and increasing the value of the company by improving the financial position

  • acquisition and investment in the stock or other assets
  • capital budgeting.
  • indentifying the source of funding
  • equity,debt,or creditors etc,
  • Determining the utility of unappriated profits for future investment, operation utilisation or distribution within the shareholders.

Public Finance

Public finance realated with the allocation of funds and money by the government into different areas.

Public finance is the study of finance related to government entities. it deals with the role of government income and expenditure in the economy.

Public finance includes distribution of income, resources allocation. funds are majorly from taxes, borrowing from banks or insurance companies.

  • Identifying the expenditure required by the public entity.
  • The sources of revenue for the public entity.
  • Determining the budgeting process and source of funds.
  • Issuing debts for public projects.
  • Tax management.

Leave a Comment