Why finance ?
One of the primary considerations when going into business is money. Without sufficient funds a company cannot begin operations. The money needed to start and continue operating a business is known as capital. A new business needs capital not only for on going expenses but also for purchasing necessary assets. These assets-inventories, equipment, building, and property represent an investment of capital in the new business.
How this new company obtains and uses money will, in large measure, determine its success. The process of managing this acquired capital is known as financial management. In general finances securing and utilizing capital to start up, operate and expand a company.
To start up begin business, a company needs funds to purchase essential assets, support research and development, and buy materials for production. Capital is also needed for salaries, credit extension to customers, advertising, insurance, and many other day-to-day operations. In addition, financing is essential for growth and expansion for a company. Because of competition In the market, capital needs to be invested in developing new product lines and production tecnigues and in acquiring assets forduct lines and production technigues and in acquiring assets for future expansion.
In financing business operations and expansion, a business uses both short-therm and long-term capital. A company, much like an individual, utilizes short-term capital to pay for items that last a relatively short period of time. An individual uses credit cards or charge accounts for items such as clothing or food, while a company seeks short-term financing for salaries and office expenses. On the other hand, an individual uses long-term capital such as a bank loan to pay for home or car goods that will lasy a long time. Similary, a company seeks long term financing to pay for new assets that are expected to last many years.
Whwn a company obtains capital ffrom external sources, the financing can be either on a short-term or long-term arrangement. Generally, short-term financing must be repaid in less than one year, while long-term financing can be repaid over a longer period of time.
Finances involves the securing of funds for all phases of business operations. In obtaining and using this capital, the decisions made by managers affect the overall financial success of a company.
One of the primary considerations when going into business is money. Without sufficient funds a company cannot begin operations. The money needed to start and continue operating a business is known as capital. A new business needs capital not only for on going expenses but also for purchasing necessary assets. These assets-inventories, equipment, building, and property represent an investment of capital in the new business.
How this new company obtains and uses money will, in large measure, determine its success. The process of managing this acquired capital is known as financial management. In general finances securing and utilizing capital to start up, operate and expand a company.
To start up begin business, a company needs funds to purchase essential assets, support research and development, and buy materials for production. Capital is also needed for salaries, credit extension to customers, advertising, insurance, and many other day-to-day operations. In addition, financing is essential for growth and expansion for a company. Because of competition In the market, capital needs to be invested in developing new product lines and production tecnigues and in acquiring assets forduct lines and production technigues and in acquiring assets for future expansion.
In financing business operations and expansion, a business uses both short-therm and long-term capital. A company, much like an individual, utilizes short-term capital to pay for items that last a relatively short period of time. An individual uses credit cards or charge accounts for items such as clothing or food, while a company seeks short-term financing for salaries and office expenses. On the other hand, an individual uses long-term capital such as a bank loan to pay for home or car goods that will lasy a long time. Similary, a company seeks long term financing to pay for new assets that are expected to last many years.
Whwn a company obtains capital ffrom external sources, the financing can be either on a short-term or long-term arrangement. Generally, short-term financing must be repaid in less than one year, while long-term financing can be repaid over a longer period of time.
Finances involves the securing of funds for all phases of business operations. In obtaining and using this capital, the decisions made by managers affect the overall financial success of a company.
Opinion about
this article :
One of the
primaryconsiderations when going into
business is money. Without sufficient funds a company cannot begin operations.
The money needed to start and continue operating a business is known as
capital. A new business needs capital not only for ongoing expenses but also
for purchasing necessary assets. These assests-inventories, equipment,
buildings, and property represent an investment of capital in the new business.
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