Finance is the discipline of business which deals with the management of money. The careful control of a person’s spread of risk portfolio with the expectations of earning better returns in the form of income is, therefore, part of the discipline. Analysis of the various risks that may pose some interference with a person’s income is therefore involved in finance. The accurate measurement of money in the discipline of economics is through the rate of returns he expects from the various investment activities, the real worth of the tangible property one has and the number of unforeseen uncertainties that his financial status faces. The field of finance is too big, and therefore, it has been dividing into three different groupings.
Personal finance involves all the financial occurrences that affect an individual. In this regard, the financial position of an individual is looked into and how it might be affected by the various environmental factors. The personal income of a person is therefore considered, and the various cash flow processes that occur to the person ongoing of money into and out of a person’s financial status and the capital position of a specific individual is hence considered. Having been enlightened about his financial position, the individual therefore takes efforts of making sure that his financial position remains stable or improves. To be able to meet this goal; a person must undertake the process of discovering the various financial uncertainties that he faces and comes up with strategies to solve them, identify ways of managing his tax levels, establish what will be the goals of his investment plans as well as arrange the relevant retirement plans.
The discipline that involves the analysis of how it is that organizations acquire their capital and the relevant procedures that are carried out by those who are in management with a bid of ensuring that the shareholder’s wealth is increased is known as corporate finance. The overall mandate of corporate finance is to look into how it is the organizations will be able to lower the rate of risks that faces the company and while in the process of doing so, be able to maximize opportunities that will create revenue for the organization and its owners at large.
Under this discipline, capital budgeting is evaluated to determine the most viable methods of allocating resources to different investment options. Capital acquisition is also very essential in determining the financial status of an organization.
Public finance pertains to all forms of financial activities that are undertaken by governing bodies such country, province, municipality and the county governments. In this regard, the governing authority evaluates the various investment projects that should be undertaken in the region in order to serve the people. The capital acquisition and payment procedure is therefore looked into by the governing bodies.