Since the early days of human evolution, Finance is consider backbone of the Business. It’s remain one of the most common and important element in the modern business world. In simple term Finance is the management of money for our financial needs. It’s also called the science of funds management.
Saving money and borrowing money is the base of the finance. Finance is one of the most important aspects of business management. Without proper financial planning a business is unlikely to be successful. Financial management is important to ensure a secure future, both for the individual and an organization.
Finance is also known as a money budget management. The management of finance deals with how money is spent and budgeted. It also deals the concepts of time, money and risk and how they are interrelated.
Types of Finance
We can easily categorized Finance in mainly three types –
* Business Finance
In this category finance management main task is to provide the funds for business activities.
* Personal Finance
This type of finance required for personal needs like education fees, financing durable goods such as real estate and cars, buying insurance, e.g. health and property insurance, investing and saving for retirement. Personal financial decisions may also involve paying for a loan, or debt obligations.
* Public Finance
This type of finance worked between countries and states.
How Finance worked
In here you can see how finance is worked. A bank accepts deposits from lenders, on which it pays the interest. The bank then lends these deposits to borrowers. Banks allow borrowers and lenders, of different sizes, to coordinate their activity. Banks are thus compensates of money flows in space.