When looking at where it all started, there is concrete evidence that proves the concept of finance to be old as the human race ourselves. On the contrary, it’s quite hard to grasp that people have been dealing with money and the concepts that surround it for so long. Whether it be trading, or dealing with gold and coins way back when, money has always played a big role in human society. The term ‘finance’ ultimately translates to the management of money. In today’s business-driven environment, the term does not only revolve around money but also economics.

The word exchange is quite significant when explaining finance and might even have the ability to replace it as finance also refers to an exchange of resources. It is thus also only restricted in accordance with the management or exchange of money. It is an art of which one manages various resources such as money, investments, assets and securities.

Finance also plays a very big role in performing productive activities and carrying out business operations which includes sales, paying compensations, liability reserves, and more.

Defining Finance

The term finance is defined differently by many different types of people. It is thus very difficult to provide a single and complete definition. Instead, you must expand its meaning and take a lot of opinions and sources into consideration.

basics-of-finance

  1. Finance in a general sense – It a general manner, or when not referring to a facet or aspect, in particular, finance is best described as the management of various valuables, and most importantly money, of which can easily be converted into cash.
  2. Finance according to the experts – When it comes to though with an education in either business, entrepreneurship and financials, finance can be described as the task of simply providing the necessary and relevant funds, required by businesses of entities such as companies, individuals and firms, on the terms met which are the most favourable, to achieve prospective economic objectives.
  3. Finance according to Entrepreneurs – According to these business hopefuls, finance can be an entity with regards to money, since each business transaction involves some forms of money.
  4. Finance according to Academicians – Described as obtained funding and an effective utilisation of funds, it is best known for dealing with profits which compensate for the possible costs and risks created by the business.

Features of Finance

The main features of finance include the following:

  1. Profitable opportunities
  2. Investment opportunities
  3. The optimal mix of money
  4. A system of internal controlling
  5. A future decision-making featurette

Finance is an entity that should always be precise when it comes to the management of raised funds such as shares and equity, owned funds that include promoter contribution, and borrowed funds like loans and overdrafts. Finance is a wider perspective when it comes to the management of companies generated valuables and assets, which overall allows for the company’s optimal efficiency.