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. The accurate measurement of money in the discipline of economics is through the rate of returns he expects from the various investment activities, the real worth of the tangible property one has and the number of unforeseen uncertainties that his financial status faces. Finance is a vast discipline which has been subdivided into three categories.
All issues that may affect a person about his financial status are referred to as personal finance. 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. The the entire process involved in the acts of trying to identify the probable future unforeseen certainties and embarking on establishing measures to combat them, working on how to manage the various taxes, coming up with the objectives of investments and the arrangement of retirement plans helps in the accomplishment of the planning.
The discipline that involves the analysis of how it is that organizations acquire their capital and the relevant procedures that are carried out by those who are in management with a bid of ensuring that the shareholder’s wealth is increased is known as corporate finance. The field of corporate finance generally deals with how the organization will be able to minimize the risks and in turn, create more profit for the organization and its owners.
Budgeting is henceforth considered in this regard to determine the different departments which will be allocated with money. The ability to acquire money is important in establishing the financial powers of a firm.
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 is tasked with looking at how capital for the project will be acquired and how it will be paid back.