Summary Business finance:financial management

Finance is the management of money, including activities such as investing, borrowing, lending, budgeting, saving, and forecasting. It involves the use of credit and debt, securities, and investment to finance current projects using future income flows. Finance can be broadly divided into three categories: public finance, corporate finance, and personal finance. The decisions made in finance are concerned with spendings, savings, investments, and securing funds. The main goal of a corporation is to maximize the shareholders' wealth by increasing the company's stock price over the long run. Stocks represent shares in the ownership of a corporation, including claims on the corporation's earnings and assets. Financial management is the key to achieving the corporation's main goal, as it deals with decisions that are designed to maximize the value of shareholders' wealth. The market price of a corporation's stock changes due to controllable factors such as profitability, good liquidity, dividends, management competence, and corporate plans, as well as uncontrollable factors such as macroeconomic conditions, industry, general market sentiment, and flow of foreign funds invested in the stock market.