Concept, Meaning and Types of Finance {B.Com (Hons) Video – 2 }

Concept, Meaning and Types of Finance (Subject: Business Finance)

A very good day to all of you today i am going to start the first topic of unit 1 of business finance and today i am going to discuss the concept of finance as in our present economy finance is defined as the provision of money at the time when it isn’t required business concern needs finance to meet their requirements in the economic world any kind of business

Activity depends on the finance hence it is called as the lifeblood of business organization whether the business concern are big or small they need finance to fulfill their business activities so we can say that finance is the heart of any organization if any person want to do business then finance is an essential need for that person if they want to do business

Or if they want to expand their current business then there is a need to have certain amount of finance in the modern world all the activities are concerned with economic activities and very particular to earning profit through any venture or activities the entire business activities are directly related with making profit so we can say that the business firm

Work for the purpose of earning profit and that is directly related with the finance according to the economic concept of factors of production there are four factors of production land labor capital and enterprise rent is given to the landlord for the use of land wages is given to the labor interest is given to the capital profit is given to the shareholders

Or the proprietors all these are the mode of finance a business concern needs finance to meet all the requirements hence finance may be called as capital investment fund etc but each term is having different meanings and unique characters increasing the profit is the main aim of any kind of economic activity without adequate finance no enterprise can possibly

Accomplish its objective so for doing any business finance is required to meet all the requirements and that may be used in terms of capital investment or funds but each term is having their different relevance is having different meaning and they have its unique character for the purpose of increasing the profit any business firm is working or expanding their

Business and that too required a finance now coming to the meaning of finance finance may be defined as the art and science of managing money so to manage the money there is a need to know the art of arranging the fun as well as its proper utilization it includes financial service and financial instruments these are the components of financial system finance

Also is referred to as the provision of money at the time when it is needed and the finance function is the procurement of fund and their effective utilization and business concern so in short i can say finance can be termed as the procurement of the fund as well as their effective utilization in any business activity now definition of the finance according

To the khan and jain finance is the art and science of managing money according to the oxford dictionary the word finance connotes management of the money webster ninth new collegiate dictionary defines finance as the science on study of the management of funds and here the management of fund is the system that includes the circulation of money the granting of

Credit the making of investments and the provision of banking facilities so in short finance explain the management of the fund management of the money types of finance but before explaining the types of finance finance is one of the important and integral part of business concern hence it plays a major role in every part of the business activities without finance

None of the person can do any business activity it is used in all the areas of activities under the different names finance can be classified into two major parts private finance and public finance now talking about the types of finance first i will explain the private finance private finance is concerned with the requirements receipts and disbursements funds

In case of an individual in case of a profit-seeking business organization and in case of a non-profit organization or to meet the requirement of corporate financial activities so in short i can say private finance are those finance that meet the requirement of funds of three organization or three person first is individual second is a profit-seeking business

Organization and third is the non-profit organization on the other hand public finance refers to the requirement receipt and disbursements of funds in the government institution which includes central government state government and the swami government financial institutions so whatever the requirement of fund is arises that fulfill under public finance but

That requirement is generated by the government institutions it may be central government state government and semi-government financial institutions has this figure explain the type of finance there are two types private finance and public finance and private finance is that finance which is concerned with the received requirement and disbursement of the

Funds with respect to personal finance for personal finance that fulfill the requirement of individual for any profit seeking organization if the need is fulfilled then it can be termed as business finance and for any non-profit organization if the requirement is fulfilled then it is termed as finance for non-profit organization and under public finance if that

Requirement is fulfilled by the government institutions whether it is a state government semi-government financial institution or the central government institution that can be termed as public finance this figure explain the types of finance there are two types private finance and the public finance under private finance when the neet requirement and disbursement

Of funds is fulfilled or generated by an individual that it can be termed as personal finance when the fund is required by the profit-seeking organization then it can be termed as business finance when the fund is needed by the non-profit organization like the charitable institutions religious institution or any other institution those who are working for the

Welfare of the society or for the some social noble cause then it can be termed as finance for non-profit organization on the other hand under public finance when the ford is generated by the government it may be state comment it may be semi government financial institutions or it may be central government institutions then it includes public finance thank

You everyone that’s all for today we will be dealing with the next topic in the next session thank you

Transcribed from video
Concept, Meaning and Types of Finance {B.Com (Hons) Video – 2 } By Dr. Sofia Khan