“No one can make millions and keep millions without learning about Finance”
“No one can make millions and keep millions without learning about
Finance”
Business Finance
The business community and people use different means
(sources) of payment like currency, cheque and bills and exchange etc. for the
settlement of business dealings or transaction. Therefore, the arrangement of
these sources is very, essential for the life of business. The money (capital)
obtained for the purpose of business is spent on the purchase of land,
buildings, machinery, furniture and routine expenses. The arrangement of
capital, its arrangement and use for business transactions is called business
finance or investment.
“Finance
consists of providing and utilizing the money, capital, rights, credit and
funds of any king which are employed in the operation of an enterprise”
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Function of Business Finance
- Purchase of Assets
When a business is established many assets like land,
building, plant and machinery etc. are purchased to run the business. The
purchase of these assets is possible with finance.
- Repair and Maintenance
For the proper working of assets repair, renewal and
maintenance is necessary. The maintenance of assets cannot be done without
finance.
- Purchase of Goods / Raw Material
Purchase or import of goods, raw material and many other
items necessary for the business. The purchase of these items is made by means
of finance.
- Research Work
Technological changes and research work at the business
research center or purchase of technology is essential for successful business.
The finance is useful for it
- Routine Expenses
For the payment of routine expenses like salaries, wages,
carriage, rent, repair, interest, commission etc., most liquid asset is
desirable and that is finance
- Services of Communication
Business manages use telephone, telegraph, facilities, radio,
T.V, newspaper etc. as the tools for increasing sales. The payment of these
services is made through finance.
- Risk coverage
Businessman are not free from risks. There are chances of
loss due to theft, fire, food, war, earthquake. But the finance helps the
business people to cover the risk of loss through insurance.
- Taxes and Duties
Claims of government in the shape of sales tax, income tax
and excise duty are paid with the help of finance.
- Invention
Invention of new products and their availability for business
is only possible with the help of business finance.
- Storage Charges
A trader has to buy goods according to the demand of
customers and these are stored in form of stock. Business finance is necessary
to meet storage charges.
- Expansion in Business
Expansion in the size of business is possible due to finance.
It puts the men, machinery and material at work.
- Change in Business
A trader can change the nature of business. The finance helps
to complete the sale of old assets and purchase of new assets.
- Retirement Benefits
Employees of the company need financial help after
retirement. They company needs finance to set up a pension fund for their workers
- Training of Employee
Training of employees to run the business effectively is
necessary from time to time and the salaries of instructions are paid with the
help of finance
- Services and Experts
A business must be in the hands of experts and experienced professionals
to run the business affairs on most modern lines. The finance can provides the
services of the trained management force for the best interest of business.
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