As amusing as the above video is for most viewers, finance hold s a serious, and important part in all aspects of a business.
What is Finance?
In a general sense, finance is the management of funds and other valuables that can easily be converted into cash (ie. assets). Finance can hold different meanings for different users like, experts, entrepreneurs, and then the academic community.
Principles of Finance
Some principles include, but are not limited to:
- Financing Analysis – Used to analyze financial implications and options of major purposes or growth opportunities.
- Balance Sheet Evaluation – Apply to financial ratios, and indicate to the owner(s) how well the company is allocating its economic resources.
- Cash Management – Formulas that are used to assess simply how much cash the company is generating from its day-to-day operations.
It’s Good to Note
Time Value of Money: – value of monetary figuring in a given amount of interest earned over a given amount of time.
– Central concept in the “Finance Theory”
Time Value Terminology: – “Future Value”
– “Present Value”
– “Discounted Value” (to the present)