The department of business which looks into the management of capital is referred to as finance. 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. The field of finance, thus, encompasses the scrutiny and management of different risks that might interfere with an individual or organization’s capital. Capital in finance is always weighed with a comparison to the rate of investment returns, the value of assets and the possible risks that they face. The field of finance is too big, and therefore, it has been dividing into three different groupings.
All issues that may affect a person about his financial status are referred to as personal finance. Under this consideration, the various environmental factors that might affect an individual’s financial position are evaluated to determine how it is they might influence the person’s financial status. In consideration is the net cash flow that occurs as a result of movement of money into and out of a person’s hands and his ideal status in regards to his financial capabilities. After learning of his true position as far as matters of financial capabilities are concerned, a person would, therefore, involves in activities that are aimed to making his financial position constant or undertake measures that will increase his capital muscles. 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.
Corporate finance focuses on how organizations get their finances and the necessary procedures that those in charge of the organization undertake to ensure that shareholders interest of value addition is attained. The practice of minimizing the risks a business faces and in the process create profit for the organization and the its owners is what the discipline of corporate finance deals with.
Budgeting is henceforth considered in this regard to determine the different departments which will be allocated with money. To know the financial muscles of a firm, the ability to source for funds is crucial.
Public Finance encompasses the financial activities of the various governing bodies of a region such as country, province, municipality and county governments. For the reason for serving the needs of the citizens, the governing authority engages in investment activities that can address those needs. The governing body is tasked with looking at how capital for the project will be acquired and how it will be paid back.