Many of us think the word finance means money, but it’s not exactly money, it is the management of money, it’s a process where money related activities are dealt with, for instance, Investing, Lending, Borrowing etc. Money is additionally known as the lifeblood of every organization as nothing could be built without money, for every sort of activity to be done cash is required, that could be dealing with basic expenses like:
- Trading expenses
- Advertisement Expenses
- Purchase and Sales expenses etc
The ideology of financial management deals with how efficiently the financial items are controlled, which involves the allocation, controlling and understanding the firm’s financial resources such as the assets and liabilities of the firm, for example, bills receivables, cash in hand, cash at bank, inventories, trade receivables, long term assets, fixed assets etc (being the examples of the assets), trade payables, sundry creditors, bank overdraft, long and short term loans etc (being examples of the liabilities).
Finance can be divided into three categories:
Finance is the management of one's income, expenses, assets, and liabilities from a personal standpoint. To manage their financial condition, people frequently work with a personal banker, investment advisor, accountant, mortgage broker, and other experts. Some examples are Bank Accounts, Credit Cards, Mortgages, Lines of Credit, Employment Income
Corporate finance is the administration of a company's funding, revenue sources, capital allocation, and profit and loss (P&L) statement from a business standpoint. Accountants, financial analysts, managers, and executives such as the Chief Financial Officer are among the people in charge of this sector of a company (CFO). Some examples are Debt, Equity, Cost of Capital, Asset, Liability, Capital, Infrastructure, Expense, profit and loss etc.
Finance includes the management of a country's public spending, federal reserve, Treasures, central bank, and other government agencies from a government standpoint. Its primary goal is to collect tax income and spend it on national services and programmes including roads, hospitals, and social security. Some examples are Income tax. GST, Inflation, Supply of Money, GNP etc.
Some important job profiles and roles for Finance related jobs are as follows:
1) Management Consultant
Management consultants assist businesses in resolving issues, improving corporate performance, adding value, and maximising growth.
4) Financial Manager/CFO
6) External Auditor
7) Financial Analyst
8) Personal Banker
9) Commercial Banker
10) Investment Banker
11) Research Analyst