Simply it is the study of money and how it is used. It is the science of management of money, assets, banking, investments and credit. It also refers to monetary resources and funds of government or a corporate body including the supplying of funds or capital. It is a branch of economics that allocates resources including the acquiring, investing and managing of resources. Finance also takes into consideration the relation of money with time and risk as it also involves the study of credit and banking.
Finance can be broadly classified into 2 categories-
- Private Finance
- Public Finance
Private Finance can be divided into-
- Personal Finance
- Business Finance
Personal Finance- It is financial planning and the utilization of resources on the individual level. It deals with budgeting, saving, and spending taking into consideration the risks associated with the future. Personal finance generally includes- Savings account, Investment policies, Consumer loans, stock market investments, Retirement plans, Managing of income taxes, credit cards. It basically deals with optimization of finances on the individual level subjected to the budget restraint.
Business finance- It tries to optimize goals, sales, profit of a corporation or other business organization by estimating future asset requirements and then allocating funds according to their availability. Business finance deals with money at the commercial level. A business constantly requires capital based on different view points- short term, medium term, long term.
Public Finance-It is a branch of economics that identifies and appraises the means and effects of the government policies. It also tries to examine the effects and consequences of different taxes and expenditures on individuals, institutions, organizations and on the entire economy. Public finance analyzes the procedures and techniques for developing and increasing the effectiveness of policies.
Public Revenue- Includes revenue earned by government from both tax (income tax, sales tax, import duty,) and non-tax sources (fines, fees).
Public Expenditure- Deals with various expenditures of the government required for its proper functioning.
Public Debt- When public expenditure exceeds its revenue, to bring about balance and continuation of its proper functioning, the government borrows from the public giving rise to public debt.
Budgetary Policy- Budgetary deficit arises when public expenditure exceeds its revenue. This branch deals with providing solutions to public deficit.
Fiscal Policy- Concerned with policy framework of the government after considering the government’s spending, avenues of earning, borrowings .
Finance and its study is not just limited to theory but comes in practice in daily monetary management-transactions, banks, investments, businesses. As finance deals with all aspects of owning or borrowing money and the final results. While tending to the assignments, EDULINK keeps in mind the principles and practices of finance such as estimation, analysis, measurement of profit-loss, cash available to pay the bills.
Finance is a potentially lucrative field yet due to its detailed and extensive nature students find it tedious and confusing. The help given by edulink understands the valence attached to assignments in a student’s life hence the critical demand for expertise is understood and delivered.