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About Me

Muhammad Iqbal
Instructor Computer
Govt. College of Commerce Vehari
Who am i?
I am financial manager
What do i do?
I manage financial affair of
any type of business.
Why is it Important?
Those who work in financial
jobs will benefit being able to
interface effectively with the
firm’s financial personnel,
process and procedures.
Is finance an art or Science

About finance?
What is the purpose of finance?
What are the sources of finance?
What are the types of finance?
Why finance is important?
Finance studies and addresses the
ways in which individuals, businesses,
and organizations raise, allocate, and
use monetary resources over time, taking
into account the risks entailed in their

A branch of economics concerned

with resource allocation as well as
resource management, acquisition and
investment. Simply, finance deals with
matters related to money and the
markets .
 The science of the management of
money and other assets.
 The management of money, banking,
investments and credit.
 Finances Monetary resources; funds,
especially those of a government or
corporate body.
 Profiling and managing project risks
 As a verb, "to finance" is to provide
funds for business.
 The supplying of funds or capital
Sources of Finance

There are four different sources of

2. Private and Family (Funds from
private and family sources)
3. Debt Financing (Borrowing money
form others)
4. Equity Financing ( by sale of an
interest in the business)
5. Other Financing( Other sources
such as Trusts and Grants)
Purpose of Finance

 Finance is action within an organization

that leads to the best use of the
resources. Financial managers make
sure that the money is spent in the way
to get the biggest bang for the buck.
This action demands detailed, quick
analysis, perceptive and determination
to insure the best plans are carried out.
 Finance is advising people on the best
investments for them to enable them to
achieve lifetime goals.
Purpose of Finance

 Finance is being entrusted with

another person's money to carry out
their wishes even after they die.
 Finance is trading securities as an
agent for someone else or yourself
in the anticipation of profits or
limitation of risk.
 Finance is negotiating for resources
to turn new technology and ideas
into reality
Types of Finance
Finance is used in three senses
1. Public Finance (Government Finance)
Public Finance means collection of money
through taxes or bonds and management of
revenue and expenditure by the government.
2. Corporate Finance (Business Finance)
Corporate finance refers to collection of money
necessary to organize, reorganize or extend an
enterprise through sales of shares, debentures,
bounds or otherwise the success or failure of
every business is linked with finance.
3. Personal Finance ( Self Finance)
Involve paying for education, financing durable
goods such as real estate and cars, buying
insurance, e.g. health and property insurance,
investing and saving for retirement.
Public Finance uses
Public Finance is important because
o To provide housing facilities, public
buildings and other utilities
o To construct roads, transit and parking
o To developed parks and recreational
o School Buildings and Facilities
o To promote higher education and to
provide students loan
o To develop hospitals for public
Corporate Finance uses
Corporate finance is necessary due to
• Purchase of new asset such as
machinery or equipment.
• Purchase of goods and material
• For the payment of business
• For the expansion of business
• For the tax and emergency
• For the professional services and
business opportunities
Personal Finance uses
Personal finance is necessary due to
To pay kids school fees or for the
college planning
For investment and life insurance
To purchase auto mobiles and credit
For the health care
Real estate
As we know
“Finance” a field of study and an area of
business, definitely has strong roots in
other scientific fields
Furthermore, many modern financial
theories resemble scientific
nomenclature. However, there is no
denying the fact that the financial
industry also includes non-scientific
elements that liken it to an art.
It has been discovered that human
emotions (and decisions made because
of them) play a large role in many
aspects of the financial world
Is finance science?
 Modern financial theories, such as
the Black Scholes model, draw heavily
on the laws of statistics and mathematics
found in science. Their very creation
would have been impossible if science
hadn't laid the initial groundwork.
 Theoretical constructs such as the
CAPM and EMH attempt to logically
explain the behavior of the stock market
in an emotionless, completely rational
manner, wholly ignoring elements such
as market sentiment and investor
Is finance an art?
History is ripe with examples that seem to
contradict the idea that finance is a science.
For example, stock market crashes that
spurred the Great Depression are not
suitably explained by scientific theories such
as the EMH
Also Investor sentiment appears to be
mildly influenced by weather, with the overall
market generally becoming more bullish
when the weather is predominately sunny.
Other phenomena include the January
effect, which exposes the pattern of stock
prices falling near the end of the calendar
year and rising at the beginning of the next.
In a financial process acquisition of
funds can be categories as science and
allocation of funds is an art. Further more
In every field of life finance like a blood
and without it all fields of life are dead
The debate continues as to whether
the field of finance is more accurately
characterized as an art or a science -
more than likely, it's a little bit of “both
 Money Banking and finance By
M. Irshad
 www.answers.com/topic/finance.htm

 www.wikipedia.com
 www.invetopedia.com