Page 18 - Corporate Finance PDF Final new link

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1.1

CONCEPT, SCOPE AND OBJECTIVES OF FINANCE
\$m`Z|g H$s AdYmaUm, joÌ VWm CÔoí`

Q.1. What is Finance? Explain the concept of finance briefly.
\$m`Z|g Š`m h¡? \$m`Z|g H$s AdYmaUm H$mo g§jon _| g_PmB`o&
OR
Write the scope and objectives of Financial Management.
\$m`Z|{e`b _¡ZoO_|Q> H$m joÌ VWm CÔoí` {b{IE&
Finance is a broad term that describes two \$m`Z|g EH$ ì`mnH$ eãX h¡ Omo Xmo g§~§{YV J{V{d{Y`m|
related activities: the study of how money is H$m dU©Z H$aVm h¡… YZ H$m à~§Y H¡$go {H$`m Om`o VWm
managed and the actual process of acquiring Amdí¶H$ YZ àmá H$aZo H$s dmñV{dH$ à{H«$`m H$m AÜ``Z&
needed funds. It includes the oversight,
creation and study of money, banking, credits, `h YZ, ~¢qH$J, H«o${S>Q²>g, B§doñQ>_|Q²>g, AgoQ²>g VWm
investments, assets and liabilities that make bm`{~{bQ>rO H$s XÿaÑ{ï>, {Z_m©U VWm AÜ``Z gpå_{bV
up the financial system. H$aVm h¡ Omo \$m`Z|{e`b {gñQ>_ H$m {Z_m©U H$aVo h¢&
Since individuals, businesses and govern- M§y{H$ ì`pŠV, ì`mnma VWm emgH$s` BH$mB`m| g^r
ment entities all needed funding to operate, the H$mo H$m`© H$aZo Ho$ {bE \§$qS>J Amdí`H$ h¡ Bg{bE \$sëS>
field finance is often separated into three main \$m`Z|g H$mo A{YH$m§eV… VrZ _w»` Cn lo{U`m| _§o n¥WH$
sub-categories: {H$`m J`m h¡…
(a) Personal Finance (a) ng©Zb \$m`Z|g
(b) Corporate Finance (b) H$m°nm}aoQ> \$m`Z|g
(c) Public (Government) Finance. (c) npãbH$ (JdZ©_|Q>) \$m`Z|g
(a) Personal Finance: Personal finance is (a) ng©Zb \$m`Z|g… ng©Zb \$m`Z|g ~hþV {ZOr
a very personal activity that depends largely J{V{d[Y h¡ Omo A{YH$m§eV… ì`pŠV H$s Am`, OrdZ
on one's earnings, living requirements, goals Amdí`H$VmAm|, bú`m| VWm d¡`pŠVH$ BÀN>mAm| na {Z^©a
and individual desires.
H$aVm h¡&
For example, individuals need to save for CXmhaU Ho$ {bE ì`pŠV`m| H$mo [aQ>m`a_|Q> EŠgn|gog
retirement expenses, which mean investing Ho$ {bE ~MV H$aZm Amdí`H$ h¡ {OgH$m AW© CZH$s
enough money along the way to properly fund XrKm©d{Y `moOZmAm| H$mo C{MV àH$ma go YZ XoZo Ho$ VarH$m|
their long-term plans. This type of financial Ho$ gmW n`m©ßV YZ H$m {Zdoe H$aZm h¡& \$m`Z|{e`b
management decision falls under personal _¡ZoO_|Q> {ZU©` H$m `h àH$ma ng©Zb \$m`Z|g Ho$ A§VJ©V
finance. AmVm h¡&
Personal finance includes the purchasing ng©Zb \$m`Z|g \$m`Z|{e`b àmoS>ŠQ²>g O¡go H«o${S>Q>
of financial products, like credit cards, H$mS²>©g, B§í`moa|g, _m°Q>©JoO VWm {Zdoe Ho$ {d{^ÝZ àH$mam|
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