Is Finance, The Blood of Business??
In today’s article we will be talking about the term finance, what is the meaning of finance, why we need finance to start the business, how can we raise finance through different sources, and what is the importance of finance in business?
Finance includes everything which includes raising, sourcing, management, procurement of funds and to decide about the activities where we have to use it in efficient way. It also includes, investments, lending, borrowings and everything which can affect the business in monetary terms.
Now if we talk about the needs of finance in business then we can also assume by looking at its definition that we need finance for many purposes and the first and foremost is that we need to it meet all our costs and expenses which can incur in any business. Also we need to perform various activities of the business whether it is related to the operating part, investing part or even financing part.
Now if I talk about how we can raise finance, then there are ample amount of sources which are there inside and outside the business. There are some external as well as some internal sources of finance which includes equity share capital, preference share capital, debentures, loans from financial institutions etc. so, there are so many sources through which a business can raise the finance and accordingly there costs also varies.
Now the last one which is the most important one and that is the importance of finance in the business, why businesses need to raise the finance and how it will going to help out the business?
First and foremost is that it is necessary for a business to handle their routine transactions and it is very important to manage them as well and that is why it is very necessary to have enough funds, and if the business knows how much funds it is having then it would be great to think about what, how and where it will going to spend the same, and these all things companies do so as to achieve the company’s goals and objectives.
That’s how we can say that the role of finance is business has a very wide scope and that’s it is important to consider as the primary part of the business because you can only start the things when you have the enough funds.
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