Summary INTRODUCTION TO FINANCE

Finance is the study of how individuals, institutions, governments, and businesses acquire, spend, and manage money and other financial assets. Understanding finance is important to all students regardless of the discipline or area of study, because nearly all business and economic decisions have financial implications. The decision to spend or consume now (for new clothes or dinner at a fancy restaurant) rather than save or invest (for spending or consuming more in the future) is an everyday decision that we all face. Financial management is that managerial activity which is concerned with the planning and controlling of the firm’s financial resources. It was a branch of economics till 1890, and as a separate discipline, it is of recent origin. Still, it has no unique body of knowledge of its own, and draws heavily on economics for its theoretical concepts even today. Finance is the science of funds management.