Finance is a large term encompassing all those things regarding the creation, management, and allocation of funds. The threefold focus of Finance is the internal/external financing of organizations, which includes assets, liabilities, resources, surplus, and deficits. Financial instruments are mainly financial products such as securities, derivatives, bank loans, and merchant cash advances. A company’s assets include accounts receivable, long-term investments, goodwill, and property. Its liabilities consist of accounts payable, accrued expenses, and net worth.
There are two main components of financial accounting. The primary component is that of an entity’s income statement which summarizes the value of the assets, liabilities, assets, and accompanying cash flows over time. The second component is the statement of cash flows which summarizes the process by which cash is used to finance operations during a period of time. Both components of the accounting process are necessary for the preparation of a Financial Accounting Report.
The study of the economics of finance is a branch of modern social science that studies how people, organizations, and institutions organize economic activity so that it produces a surplus or a deficit. The discipline of modern social science is often referred to as macro economics. The study of micro economics looks at how individuals and firms respond to changes in relative prices of goods and services. The modern day’Economics’ scope covers a much larger area than simple personal finances or the allocation of resources. The scope is vast and includes issues such as foreign trade, business cycles, inflation, budget deficits, debt repayment, international trade, and balance of payments among many other topical issues.
Finance is the language of money. All money transactions are described by formulas in terms of cash flows, including the balance of trade, credit, and bank lending. As part of the analysis of financial decision making, budgeting is also included. Finance can be taught as a course at the graduate level or as an elective degree. At both the college and university levels Finance has become an increasingly popular choice for students.
A main article on this subject, “A Modern Approach to the Study of Finance”, written by Joseph E. Doyle, contains a detailed analysis of the role of finance in economic development. This main article examines the major features of modern economics with special reference made to finance. The article includes topics such as distribution of income and wealth, budgeting and financial management, financial institutions, economic growth, investment, money and banking, price determination, productivity assessment, venture capital and risk. The other main article in this series, “The Practice of Finance”, written by B. K. Mitra and titled ” Contemporary Financial Problems in India “, provides an in-depth look at the practical problems facing Indian businesses. The other popular finance articles include “Indian Economy”, “Finance as a Strategic Tool”, “Debt and Finance in Emerging Economies” and ” Malaysian Business Environment”.
The first main article in this series, ” Finance as a Strategic Tool”, written by B. K. Mitra provides a useful introduction to the concept of financial planning. The other main articles, “Banking in a Developed Nation” and ” Malaysian Enterprise Fund Setting up”, provide a detailed analysis of various financing options available to small and medium sized businesses in developing countries. Finance topics are also discussed in the International Financing Review, “Notes on Indian State Formation” and “Asian Financial Markets”. The third article, ” Malaysian Private Equity and Finance Options”, is an article on the implications of private equity for Malaysian companies.