Finance is a large field with many different sub-disciplines. It is the science that deals with the science of financial activity, and the tools used to evaluate and monitor it. As with any discipline, there are experts in this field who have accomplished a lot of research and advanced methods. For those interested in learning more about this exciting and often lucrative field, there are finance degrees available at many colleges and universities.
The major focus of public finance includes studying the economic impact of government policies and programs. It also takes into account how people feel about these policies and what changes they would like to see made. This branch of public finance focuses on budgeting, taxation, public spending and debt management. Public finance includes a number of branches, including: political science, statistics, health sciences, accounting, business administration and teaching.
Another branch of public finance looks at the way in which individuals and corporations use their funds, both to generate more revenue and as well as to reduce their expenses. This branch of public finance focuses on the measurement, diagnosis and treatment of public debt and its effects. Public debt refers to government loans, debts and other obligations. Some examples of public debt include: mortgages, student loans, federal grants, alcohol and tobacco monies, insider trade information and purchases made by an individual or a company with financial ties to government agencies or industries.
Private finance refers to the processes that an organization uses for borrowing and lending. Much like private finance, the goal of public finance is to make sure that organizations can afford to borrow and lend. The processes that go into the process of public finance include: borrowing, using the money wisely, maintaining a reserve of capital and diversifying the use of financing sources. One of the most important concepts of private finance is the theory of cost based borrowing. Cost based borrowing essentially means that the more your organization costs them, the more they will borrow from you in the form of loans or deposits.
Public finance and corporate finance are closely related but different in many ways. Public finance is concerned with the day-to-day functioning of the nation’s fiscal system. On the other hand, corporate finance is more directly associated with the financial policies, strategies and ownership structures of a corporation. Corporate finance is primarily concerned with the long-term performance of the corporation.
For any business organization, the ultimate aim of its management is to create a profitable financial position. Creating a profitable financial position is a complex process that starts with identifying the essential short-term and long-term goals of the organization, setting short-term and long-term financing requirements, analyzing the available funding sources and constructing a realistic financing program. As well, management must also take into account the complete mix of financial activities of the organization, including: working capital management, accounts receivable management, inventory management and sales and service programs. These activities form the basis of all the various financial activities of a business organization.