Importance of Business Finance

Financial planning is the implementation plan for the various aspects of the finance function. In short, corporate finance deals with the formulation of a financial plan that the quantum of finance required the pattern of funding and policies to continue to manage the financial plan. The company requires short-term capital and long term. The short-term capital or working capital is the capital needed for the obligations of day-to-day or to cover operating costs. The long-term capital is needed for fixed assets. Generally, in a conservative base, part of working capital also met with the long-term capital.

The capital required can be obtained from various sources. Much has been raised from internally generated funds. The rest is raised from external sources, such as issuing shares and bonds and loans. This pattern of financing is known as the capital structure. Implementation of appropriate control systems to ensure efficient use of resources. Finally, all major issues reported to top management the right actions at the right time. The financial reports are analyzed to assess business performance. According to Cohen and Robin, business, finance focuses on determining the financial resources necessary to meet the company’s operating program. Business funding to help establish and maintain a financial control system for the allocation and use of resources.