Finance, as a whole, is the management of money and how it is invested, allocated and used by individuals, corporations, and governments.
Finance is typically split into three categories, including Personal Finance (individuals/households), Corporate Finance (businesses), and Public Finance (governments).
Personal finance is the management of a person or household’s income, expenses, investments, and dues, such as income tax. (CFI)
Examples of Personal Finance include:
Taxes
Employment Income
Lines of Credit
Personal Savings and Expenses
Corporate Finance deals with how companies make decisions, invest funds, raise capital and structure their money to maximize profits and minimize costs, in order to bring their shareholders profit.
Examples of Corporate Finance include:
Mergers and acquisitions
Managing short term assets
Raising money through strategies such as crowdfunding
Use of income statements and balance sheets to monitor company's financial health
Public finance is the way governments at the local, state and federal level raise, manage, and spend money to support public goods and services. The purpose of public finance is to achieve economic goals such as stability, efficient resource allocation and income redistribution.
Example of Public Finance include:
Social Security and insurance
Sales tax
Income tax
National budget and debt
Infrastructure spending
The most common example of financial activities can include:
Personal or client investment in stocks, bonds, or government certificates of deposits (CDs)
Lending money to people via a mortgage in order to allow them to buy a house
Using excel spreadsheets to build budget and financial models
Acquiring capital through issuing equity (stock) or debt (bonds, loans)
Setting aside money in high interest savings accounts
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