What Is Finance?


Finance is generally defined as the study of financial matters including: the collection, preservation, analysis and distribution of financial resources, and how those resources are used. In the context of businesses, finance is generally defined as the study of: the study of how to use resources effectively; how to maximize the return on those resources; how to minimize the cost of resource use; and the allocation of those resources between productive activities and non-productive activities.

Finance has two distinct roles: the study of money management and the development of a company’s products. Finance typically includes issues concerning the development of products, including product development, product marketing, manufacturing, distribution and pricing, financial reporting, accounting, auditing and control, quality control and manufacturing, among other topics. Specifically, finance also involves the following questions:

Finance is undertaken by companies in various different areas, including sales, research and development, production, financial management and financial reporting. Sales managers have a fundamental role in determining a company’s long-term profitability. They are charged with responsibility for ensuring that the needs of the company’s customers are met and that the company’s products meet customer requirements. Sales managers can be found responsible for sales and marketing, production, distribution, and accounting.

A company can undertake several methods of finance. First, it can obtain financing through a commercial bank, a special purpose vehicle, a syndicate of creditors, or through a venture capitalist. Second, it can obtain finance by providing securities. Third, a company can borrow money by issuing shares of stock.

Financing is also often used to make certain changes in a company’s assets. Such changes might include the purchase of new equipment or supplies, the reorganization of the company’s assets, the liquidation of a company’s assets, or even the sale of assets of the company. All of these types of transactions are typically managed by a company’s chief executive officer (CEO), who manages the company’s finances in order to assure that the needs of the company will be met in the future.

There are many different types of finance, each with its own specific responsibilities. The key aspects of finance include: managing assets, ensuring that funds are spent efficiently and that are generated by the business, establishing goals and objectives, managing the costs of the business, identifying, maintaining control and reliability of the enterprise, and the quality of outputs and processes, and creating strategies to achieve these goals and objectives.

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