Introduction to finance

Introduction to finance

What Is Finance?

Finance is the arrangement or provision of money or funds and its utilization for fulfilling the personal, business or government needs.

Personal Finance Needs:-

An individual or a family needs money for various things such as education, marriage, medical emergencies, purchase of house, purchase of vehicle, etc and many other things. These financial needs are called as personal financial needs and an individual or a family fulfills these needs by taking various kinds of loans from banks, from own salary and savings , borrowing from friends and relatives,etc.

Business Finance Needs:-

A co needs money right from its establishment to start the business which is called as capital. After that the company needs money to purchase assets such as  plant, machinery, furniture, computers and many others. It needs money for advertising and marketing of its products or services. It needs money for research and development . It also needs money for conducting the day-to-day operations of business. These financial needs are called as business or corporate financial needs and a company fulfills these needs by issuing shares and debentures to the public, taking loans from banks and financial institutions, from it’s own retained earnings, etc.

Government Finance Needs:-

The government of a country whether central, state or local needs money to provide various services and facilities to its citizens such as water, electricity, education, infrastructure, transportation and many others. The government also needs money for military and defense purposes. These financial needs are called as government or public financial needs and a government fulfills these needs by collecting various kinds of direct and indirect taxes from its citizens, issuing bonds to the public, borrowing from the domestic and foreign financial markets,etc.

 

 

 

 

 

 

 

 

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