How is Finance Beneficial to a Company?

Finance is the term that is used to describe the study and the investments, systems of money and other financial tools. Finance is usually divided into three categories namely public, corporate and personal finance. Behavioral finance helps to identify the necessary reasons behind the financial decision (Emotional, Social and Psychological).  To study finance in detail at an early age, students opt for BBA finance where they will be taught all the financial subjects. This will build their basics in finance and then they can continue studying MBA finance or do a separate course of finance or work in the finance field since it has a lot of scopes. 

A finance degree like BBA Finance usually covers technical, theoretical knowledge and involves the basic financial skills that are required for finance careers. It also teaches us the measurement of wealth and how it influences the way all the companies behave. Therefore this is the first step to learn the basics and increase the knowledge as we move to higher steps. 

Finance as a different branch of theory and practice from economics arose in mid of the 1940’s. Since the fall of human history, few topics of finance like money, banking, and lending were around. As mentioned earlier, finance is broken down into three main categories. Public finance involves tax systems, expenditures of the government, issues of debt and other government concerns. Personal finance includes all financial decisions and activities of an individual or it can be a household including budgeting, insurance, and planning as well, and corporate finance includes liabilities, debts, and revenues for a business. 

Finance in a Company

Finance is the heart of any company since every small transaction that flows in a company is recorded by the finance team. The finance team considers many people under them like an accountant, financial analyst and so on. They check all the cash flow of the business and prepare statements. They also prepare budgets for companies so that money is not wasted and there is a proper record of all the expenses. 

Instances of Usage of Finance

 Finance is very important for every individual and used every day with or without conscience. 

Example: A child getting pocket money will analyze and check how much money can be saved and how much money should be spent for every little thing. Another instance is of a person going for a vacation will budget how much money should be spent for everything starting from travel to food to stay and so on. Therefore, finance is very necessary for every human being. 

Financial Theories

 The basics of finance theory lay the foundation for many tools which are modern and are used in areas like investment and asset pricing. The theories are as follows:

• Financial economics
• Financial mathematics
• Experimental finance
• Behavioral finance

Most of the theoretical concepts like general equilibrium analysis, IE and theory of contracts are completely in classical microeconomics. 

Importance of Finance

The main sources of funding for any business are revenue from operators, investor finances, partners or venture capital and loans.

• Achieving goals
• Long term activities
• Short term activities
• Meeting financial activities

Businesses or companies require finance for daily operations and to meet important payments and expenses. They can either be long term or short term. Therefore, finance is one of the most important operations for a company. There are reputed Management Colleges in India which offer BBA Finance Course and Students can opt for it for a better future.