The Discipline of Finance
Finance is the discipline of business which deals with the management of money. The practice involves the careful monitoring of various individual’s investment ventures to ascertain that they produce more desirable outcomes in the form of income. Analysis of the various risks that may pose some interference with a person’s income is therefore involved in finance. Capital in finance is always weighed with a comparison to the rate of investment returns, the value of assets and the possible risks that they face. The field of finance is too big, and therefore, it has been dividing into three different groupings.
Personal finance involves all the financial occurrences that affect an individual. Having considered this, the financial position of a person is looked into with regards to the environmental factors that can influence his financial position to determine how they will bring about the changes. In consideration is the net cash flow that occurs as a result of movement of money into and out of a person’s hands and his ideal status in regards to his financial capabilities. Having been enlightened about his financial position, the individual therefore takes efforts of making sure that his financial position remains stable or improves. To be able to meet this goal; a person must undertake the process of discovering the various financial uncertainties that he faces and comes up with strategies to solve them, identify ways of managing his tax levels, establish what will be the goals of his investment plans as well as arrange the relevant retirement plans.
Corporate finance is described to as the field of finance that looks into how companies can source for their capital and the various management measures that are taken by those in charge of the company to ensure that their owners can get value from their business. The overall mandate of corporate finance is to look into how it is the organizations will be able to lower the rate of risks that faces the company and while in the process of doing so, be able to maximize opportunities that will create revenue for the organization and its owners at large.
Under this discipline, capital budgeting is evaluated to determine the most viable methods of allocating resources to different investment options. Capital acquisition is also very essential in determining the financial status of an organization.
The financial activities of the various bodies which have been given the mandate to rule in over a specific region such as country, county, municipality and province is referred to as public finance. The investment projects undertaken by the governing bodies are supposed to address the needs of the people. The governing body therefore budgets on how finance will be made available for the project and how the payment will be done.