Areas of Finance
Finance is a department of financial management. It includes all operational processes for deploying and repayment of financial resources that are needed for investments. The areas of finance are in general: business or corporate finance, personal or private finance as well as public finance.
The following three sub areas of finance shall be presented in a summerized explanation.
Corporate finance
This field of finance deals with monetary decisions that are made by different enterprises and companies. As well corporate finance delineates which diverse tools and analysis are used for making these monetary decisions. The maximization of the shareholder value is the centre of interest.
Corporate finance can be sectored in two basic disciplines: long-term and short-term decisions and techniques. Long-term decisions are for example different capital investments. Short-term decisions can be credits for customers. Managing cash is here in the centre of interest.
Personal finance
As a subarea of finance, personal finance deals with monetary decisions that are made by individuals and families. It describes different ways of saving, spending or obtaining money as well as financial risks in different societies and diverse life situations. Credit cards, consumer loans, insurance policies or income tax management are the terms of reference.
Public finance
Public finance can be described as the additional income and expenditures of the public government. This subject deals with three fields:
- an efficient partitioning of resources
- an allocation of income
- an aggregate stabilization
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