Study of Home Loans

Chapter-1

Introduction

INTRODUCTION TO FINANCE

Finance studies and skips over the ways in which individuals, businesses, and organizations raise, allocate, and use monetary resources over time, taking into account the risks entailed in their projects. The term finance may thus incorporate any of the following:

• The study of money and other assets;

• The management and control of those assets;

• Profiling and managing project risks;

• As a verb, "to finance" is to provide funds for business.

The activity of finance is the application of a set of techniques that individuals and organizations (entities) use to manage their financial affairs, particularly the differences between income and expenditure and the risks of their investments.

Finance is used by individuals (personal finance), by governments (public finance), by businesses (corporate finance), etc., as well as by a wide variety of organizations including schools and non-profit organizations. In general, the goals of each of the above activities are achieved through the use of appropriate financial instruments, with consideration to their institutional setting.

Business finance is an activity or a process which is concerned acquisition of funds, use of funds and distribution of profits by a business. Finance is one of the most important aspects of business management. Without proper financial planning, a new enterprise cannot even start, let alone be successful. As money is the single most powerful liquid asset, managing money is essential to ensure a secure future, both for an individual as well as an organization.

FUNCTIONS OF FINANCE

The primary aim of finance function is to arrange as much funds for the business as are required from time to time. this function has the following aims:-

• Acquiring sufficient funds: The main aim of finance function is to assess the financial needs of an enterprise and then finding out suitable sources for raising...