Finance is a broad term for various things about the study, production, and management of funds and investments. In particular, it concerns the questions of who, what and when an individual, organization or government takes the money necessary for their activities and how they use or invest it. The key role that finance plays is to link the values of financial assets and liabilities with actual productive capacity and potential. It thus aims to create a framework through which individuals, institutions and agencies can assess the risk and return on investment of their financial assets. Finance is thus one of the most important considerations in management research.
The discipline of finance draws on several fields of specialization. One branch of it is micro and macro economics. Within this subfield are the broad topics of economic growth, monetary policy, budget analysis, public finance and banking finance. Within the macro-economic field are the major areas like macroeconomics, industrial economics, international finance, real estate economics, personal finance, fiscal economics and political science. In addition, finance has strong connections with many other academic fields such as accounting, investment management, economics, law and humanities. All of these fields have developed their own specializations, which further enhance their knowledge and impact on the direction of finance research.
A wide number of modern day applications are being used in the field of finance. Two of these applications are micro and macro economics. Microeconomics deals with the decisions made in managing money. Whereas macroeconomics deals with such decisions as to how much the money supply should be increased, altered or decreased. Each of these decisions influences the overall economy and have profound effects on the functioning of the economy.
Another branch of finance is that of market sciences. This includes the study of financial systems as they affect economic activity. Market sciences also deal with issues that are related to information, risk, value and price. The impact of these decisions on the financial markets can have a profound effect on the value of the national economy and ultimately, the quality of living.
Decision science is the study of information systems, the analysis of the data gathered by Finance and accounting in order to support strategic decisions. Strategic decisions in Finance include those concerning national resources and programs. Decision science mainly concerns the provision of enough money to get something done. Since finance is considered to be an important determinant of national success, this branch of science has made it a part of the MBA curriculum. Finance graduates can use their knowledge to analyze and improve business and financial systems.
The management of finance requires a systematic approach and discipline. Finance involves the use of the financial tools and various techniques in order to make the best use of finance. These techniques are used to make funds available to suit the needs and demands of the market. Finance therefore plays an important role in economic growth and development. To ensure adequate funds, the role of Finance must be played wisely. Proper decision-making and systematic financial management are required for effective fund availability.