The term Finance is a most widely used word in the field of economic activity. In ordinary sense the term finance denotes money or wealth. But it has wider meaning in economic activity. Finance is regarded as the life-blood of business system. As a man cannot live without blood, so is business and economic system unimaginative without finance.Neither a business can be initiated nor can it be run smoothly without it. Finance is thus the basis of the prosperity of a business. It is regarded as the key to success of a business firm.
Finance is the main means of the mobilization of funds. The method of acquiring, managing and allocating the fund is known as finance. Finance converts the accumulated fund into productive uses. Finance is related to the method of acquiring and spending the fund. Hence, the subject related to the study of the technique and process of acquiring fund for a business and the use of that fund is known as finance. Finance is, therefore, called the Science of Management of Money.
Finance as a discipline has been defined in many ways. Some of the definitions are as fallows:
According to R.A. Stevenson- "Finance is the means by which the funds are obtained and the method by which these funds are manged and allocated." He is of opinion that finance is concerned with the act of financing. Hence, the management of furnace denotes the managing the means of payment. Finance consists of money , credit, stock, bond, mortgage and so on.
In short, finance is a subject related to the acquisition, management ans utilization of the fund. Finance can be studied in individual, business and government level. In all these levels, finance is concerned with the decisions related to the individuals or agencies acquiring and spending money.
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