In a general sense, finance means collecting money. In the broadest sense, financing is the act of planning, allocating, storing, using, and controlling money.
The word finance comes from the Latin word Finis which means to collect money. In short, financing refers to the efficient management of money.
Definition of Finance By Different Authors:
L. G Gitman defines, “Finance is the art and science of managing money.”
John J. Hampton defines the term “Finance can be defined as the management of flows of money through an organization, whether it be a corporation, school, bank or government agency.”
According to Guthumann and Dougall, “The activity concerned with planning, developing, managing, administering and increasing of the capital used for business purposes is known as finance.”
According to Bodie and Merton, “Finance is the study of how scarce resources are allocated over time.”
O. Ferrel C. and Geoffrey Hirt define, the term “Finance refers to all activities related to obtaining money and effective use.”
According to E.W. Walker, “Activities of a business concern relevant to financial planning, coordinating, control and their application is called finance.”
According to Schall and Halley, “financing refers to the issues, policies, and theories related to the collection and use of funds by individuals, organizations, and governments.”
B.O. Wheeler defines, “Business finance is that activates which is concerned with the acquisition and conservation of capital funds in meeting the financial need and overall objective of business enterprise.”
Definition of financing / what is financing?
= All the activities related to the planning, resources, use, and control of raising funds required by the organization are called financing or finance.
What do you mean by financing?
= financing is primarily concerned with the collection and management of funds. Money is said to be the lifeblood of a business. The amount of capital required to run a business, the sources from which the capital is raised, and how to invest it to maximize the profit of the business, planning, and implementation of all these things is called financing.
Who is the financial Manager?
= The person who performs all the functions related to financing is called the Financial Manager.
Financing is a method that-
- Raises money
- Invests money
- Distributes profits
Financing can be divided into 5 parts. Namely:
- Family financing
- Government financing
- Non-profit organization financing
- Business financing
- International financing
Considering the source of family income, the intention to meet all the expenses of the family is called family financing.
Considering the source of government revenue, the intention of the government to spend all the expenditure is called government financing. Government financing is about making various financial decisions in the interest of the people. The main goal of government funding is public welfare. In other words, government funding refers to various financial decisions related to the interests of the people.
Non-profit organization financing:
Non-profit organization financing is the centralized financing system of a non-profit organization. A non-profit organization is a for-profit or non-profit business organization that is run and regulated with the main objective of public welfare in mind.
Business financing is a business-centric financing system. Business is the act of conducting and controlling legitimate economic activities with the main objective of making a profit.
The concept of international financing is closely linked to the concept of import, export, and re-export.