Today, it is not very obvious to understand the field of finance. Indeed, a definition of this term is actually a set of institutions, laws and mechanisms that provide financial funds to achieve a certain project. Take a look at this page to learn more about the concept of finance.
Definition of the Term
Finance is the link between decision-making, action planning and value creation. In other words, it consists of making sure that the decisions taken will generate added value later on, setting up a financial forecast and finally facilitating the implementation of the decisions.
Thus, finance is essential to have a reliable view of the future and to determine if the project or the decisions taken are reliable or not. Finance also allows us to know if the decisions taken will have a positive impact on the standard of living of everyone. Furthermore, it is also the provision of financial resources to a physical or moral institution to carry out a project.
What field of action ?
As mentioned above, finance was created in order to increase the financial wealth of an organization or a company. For example, for a given amount of money, one receives a profit of the same value. Nowadays, finance is involved in six areas, namely.
- Financial management, in companies
- Investment, in financial institutions
- Institutional finance,
- International finance,
- Public finance,
- Personal finance.
The corporate finance side
Also called "corporate finance," it is a department that holds an important place in a company. Corporate finance includes forecasting, dashboards, cash flow, investment policies, risk management, and document regularization. Trained by the accounting department, it is in charge of several complementary missions, ensures that expenses are not out of budget and gathers the necessary funds at a given date to finance the firm's activities.
Finance covers all the mechanisms aimed at making the required funds available to complete a business project. It is also used to see if the payment will be paid or not.