Understanding Finances


Understanding Finances

Finance is a broad term encompassing matters relating to the study, development, management, production, and distribution of financial resources. Financial analysis is one branch that includes many aspects of the discipline. The scope of the discipline can be broadly categorized into three sub branches monetary, credit, and capital. Within these branches, there are many other subsets like micro, macro, and social. There are also other concepts that are associated with finance like risk, inflation, and market risks.

Public finance revolves around the goals and policies of public organizations. It is also called management of economic risk. In this field, individuals, companies, the government, and non-profit organizations attempt to achieve certain objectives. Some of the topics in the area of public finance include: tax planning and policies, budgeting, corporate finance, philanthropy, labor and industrial relations, and education and learning. Public finance also includes studies in economic policy, economics, financial markets, and financial institutions. Banking is an important part of the field of public finance.

Business finance is the study of the supply side and demand side of the business economy. The supply side refers to factors that affect prices; while the demand side affects the supply and demand of particular items. This includes price, income, and sales. Economists use business finance to examine the relationships between economic activities, the structure of business credit, and governmental programs. Examples of things studied in business finance include: marketing, customer relationships, mergers and acquisitions, investment, and financing.

Public finance includes tax management and the regulation of individual income taxation. Taxation affects the supply side of the economy by increasing or decreasing the wealth of the population. By analyzing the relationships between economic activities, taxes, and taxation, public finance experts identify ways to improve the allocation of public resources. Examples of topics studied in business finance include: company earnings, taxation, unemployment, public spending, public health, budgeting, and financial stability.

Public health is a concern that rises above and beyond insurance companies. This concern deals with issues such as the quality of life, obesity, nutrition, drug abuse, and tobacco use. Public health is an area of great importance in the United States because of the large number of uninsured individuals.

Accounting provides information about the financial activities of an institution. Accountants analyze the financial records and perform research to come up with a thorough account of all of an organization’s money. Finance accounts help to determine the long-term viability of a business or agency. For example, if an insurance company does not make enough investments to protect itself from liability, investors will lose confidence in that company and it may fail.