The things a company needs to grow are not many. Sufficient capital, workforce and a solid sales strategy is all it takes. How do you think this capital is met? The answer to this question reveals the importance of the financial sector.
Finance is the sub-branch of economics used for matters related to the management, creation and study of money and investments. It includes the use of credit and debt, securities and investments to finance existing projects using income streams. Finance deals with issues such as the time value of money and interest rates.
Finance is divided into 4 main branches: public finance, corporate finance, personal finance and social finance. First, public finance is examined. The government distributes the resources, which are the assets of the state, to institutions working in public areas such as municipalities and ministries, as it should be. Public finance also deals with the money link between banks and the central bank. Finally, the projects made by companies by the order of the state are also examined with this financial area.
Corporate finance, on the other hand, is explained in a very different way. Businesses obtain financing in a variety of ways, from equity investments to loan arrangements. A firm can get a loan from a bank or set a line of credit. Borrowing and managing it properly helps a company grow and be more profitable. Corporate finance, on the other hand, examines all these transactions.
Another area is personal finance. Personal finance involves analyzing the current financial situation of an individual or family, identifying short-term and long-term needs, and executing a plan to meet these needs within individual financial constraints. To put it simply: Home economics and spending your salary on the right things. Personal finance is largely tied to one's earnings, life needs, and individual goals and desires. Your expenses may vary depending on your goals and needs.
The last main branch of finance is social finance. Social finance: refers to investments in social enterprises, including charities and some cooperatives. These investments provide both a financial reward and a social benefit to the investor rather than a direct donation. So, most of the time, institutions organize charity events to advertise. The area that examines the monetary aspects of these activities is social finance.
