finance (in economics)

Dictionary

fi·nance (fə?-năans', fīi-, fīi'năans')
n.

  • The science of the management of money and other assets.
  • The management of money, banking, investments, and credit.
  • finances Monetary resources; funds, especially those of a government or corporate body.
  • The supplying of funds or capital.
  • tr.v., -nanced, -nanc·ing, -nanc·es.
    • To provide or raise the funds or capital for: financed a new car.
    • To supply funds to: financing a daughter through law school.
    • To furnish credit to.
  • [Middle English finaunce, settlement, money supply, from Old French finance, payment, from finer, to pay ransom, from fin, end, from Latin fīinis.]

    • fi·nance'a·ble adj.

     

     

    The American Heritage® Dictionary of the English Language, Fourth Edition Copyright © 2004, 2000 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved.

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    Thesaurus

    finance

    noun

    • The monetary resources of a government, organization, or individual. capital, fund (used in plural), money (often used in plural). See money.
  • verb

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    Roget's II: The New Thesaurus, Third Edition by the Editors of the American Heritage® Dictionary Copyright © 1995 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved.

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    Encyclopedia

    finance, theory and practice of conducting large public and private dealings in money. Important institutions of private finance include those that deal with insurance, banking, stocks (see stock), bonds, and other securities. With the development of the national state, public finance—the management of the revenues, expenditures, and debts of the state—has been of great political, as well as economic, importance. The most important source of government revenue is taxes, but sale of public properties and franchises, as well as the sale of interest-bearing bonds, also contribute. Since the Korean War, a large part of governmental expenditures has gone for various military and defense needs. Other important areas of governmental expenditure are health, education, and welfare (the Social Security, Medicare, and Medicaid programs); interest on the national debt; and public works. Important institutions of international finance are the International Bank for Reconstruction and Development and the International Monetary Fund.

     

    The Columbia Electronic Encyclopedia, Sixth Edition Copyright © 2003, Columbia University Press. Licensed from Columbia University Press. All rights reserved. www.cc.columbia.edu/cu/cup/

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    Investment

    Corporate Finance

    Any financial or monetary activity that deals with a company and its money.

    Investopedia Says: This can include anything from IPOs to acquisitions.

    See Also: Acquisition, Corporation, Finance, IPO, Structured Finance

    Related Links:
    Diversification? Optimal portfolio theory? Read this tutorial and these and other financial concepts will be made clear. Financial Concepts

     

     

     

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    Legal Dictionary

    fi·nance1
    n.

    • pl Money or other liquid resources of a government, business, group, or individual
    • The system that includes the circulation of money, the granting of credit, the making of investments, and the provision of banking facilities
    • The science or study of the management of funds
    • The obtaining of funds or capital financing
  • fi·nance2
    vt.

    • fi·nanced fi·nanc·ing

      • To raise or provide funds or capital for (finance a takeover)
      • To furnish with necessary funds
    • To sell something to on credit

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    Merriam-Webster's Dictionary of Law 1996. Merriam-Webster's, Incorporated. Published under license with Merriam-Webster, Incorporated

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    WordNet

    Note: click on a word meaning below to see its connections and related words.

    The noun corporate finance has one meaning:

    Meaning #1: the financial activities of corporation

     

     

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    finance

    The term finance stands for any of the following:

    • · The study of money and other assets
    • · The management of those assets
    • · As a verb, to finance is to provide funds for business.

    • Examples of some basic financial concepts

    The activity of finance is the application of a set of techniques that individuals and organizations use to manage their financial affairs, particularly the differences between income and expenditure.

    An individual or organization whose income exceeds their expenditure can lend or invest the excess. On the other hand, an individual or organization whose income is less than their expenditure can borrow, decrease their expenses, or increase their income. The lender can find a matching borrower, or can resort to a financial intermediary, such as a bank or the bond market. The lender receives interest, the borrower pays interest, and the financial intermediary pockets the difference.

    A bank aggregates the activities of many borrowers and lenders. A bank accepts deposits from lenders, on which it pays interest. The bank then lends these deposits to borrowers. Banks allow borrowers and lenders of different sizes to coordinate their activity.

     

    The application of financial principles to individuals, business, and states

    Finance is used by individuals (personal finance), by governments, (public finance), by businesses (corporate finance, ect.) as well as by a wide variety of organizations including schools and non-profit organizations. In general, the goals of each of the above activities are achieved through the use of appropriate financial instruments, with consideration to their institutional setting.

     

    Personal Finance

    Questions in personal finance revolve around

    • · How much money will be needed by an individual (or a family) at various points in the future?
    • · How is that need to be funded?
  • Personal financial decisions involve paying for education, financing durable goods s.a. real estate and cars, buying insurance, e.g. health and property insurance, investing and saving for retirement.

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    Business finance

    In the case of a company, managerial finance or corporate finance is the task of providing the funds for the corparaions' activities. It generally involves balancing risk and profitability. Long term funds would be provided by equity and long-term credit, often in form of bonds. These decisions lead to the company's capital structure. Short term funding or working capital is mostly provided by banks as line of credit.

    On the bond market, borrowers package their debt in the form of bonds. The borrower receives the money it borrows by selling the bond, which includes a promise to repay the value of the bond with interest. The purchaser of a bond can resell the bond, so the actual recipient of interest payments can change over time. Bonds allow lenders to recoup the value of their loan by simply selling the bond.

    Another business decision concerning finance is investment, or fund management. An investment is an acquisition of an asset in the hopes that it will maintain or increase its value. In investment management - in choosing a portfolio - one has to decide what, how much and when to invest. In doing so, one needs to

    • · Identify relevant objectives and constraints: institution or individual - goals - time horizon - risk aversion - tax considerations
    • · Identify the appropriate strategy: active vs passive - hedging strategy
    • · Measure the portfolio performance

    • Finance of states

    State (country) finance is called Public finance. It is concerned with

    • · Identification of required expenditure of a public sector entity
    • · Source(s) of that entity's revenue
    • · The budgeting process

    • Financial economics

    Main article Financial economics

    Financial Economcs is the branch of Economics studying the interrelation of financial variables, s.a. prices, interest rates and shares as opposed to those concerning the real economy.

    It studies:

    • · Valuation - Determination of the fair value of an asset
      • · How risky is the asset? (identification of the asset appropriate discount rate)
      • · What cash flows will it produce? (discounting of relevant cash flows)
      • · How does the market price compare to similar assets? (relative valuation)
      • · Are the cash flows dependent on some other asset or event? (derivatives, contingent claim valuation)
    • · Financial markets and instruments
    • · Financial institutions and regulation

    • Financial mathematics

    Main article Financial mathematics

    Financial mathematics is the study of financial data with the tools of Mathematics, mainly statistics. Such data can be movements of securities - stocks and bonds etc. - and their relations. Another large subfield is insurance mathematics.

     

    See also

    • External links

    • · For an in-depth finance glossary, see Glyn A. Holton's riskglossary (http://www.riskglossary.com)
    • · For a Hypertextual Finance Glossary, see ~Prof. Campbell R. Harvey (http://www.duke.edu/~charvey/Classes/wpg/glossary.htm)
    • · For material covering three areas in finance - corporate finance, valuation and investment management, see ~Prof. Aswath Damodaran (http://pages.stern.nyu.edu/~adamodar/)
    • · For an interactive corporate finance environment, see Prof. Rock Mathis (http://www.prenhall.com/divisions/bp/app/cfldemo/index.html,)
    • · For links to finance web sites, grouped by topic see ~Web Sites for Discerning Finance Students (http://web.utk.edu/~jwachowi/wacho_world.html#Part%20I), Prof. John M. Wachowicz
    • · For articles on current corporate finance and investment issues, visit Oaktree Research (http://www.oaktree-research.com), a financial education portal
    • · The introductory finance web site at the University of Arizona, studyfinance.com (http://www.studyfinance.com/)
    • · For illustrative (simpler) worked examples covering several of these topics see teachmefinance (http://www.teachmefinance.com)
    • · For introductory articles covering mathematical finance see quantnotes (http://www.quantnotes.com/fundamentals/)

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    This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia article "Finance".

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    Translations

    Translations for: Finance

    Nederlands (Dutch)
    financieren, verkopen op krediet, met geldzaken bezig zijn, financiën, financieel beheer

    Français (French)
    finances, fonds, crédit, financer

    Deutsch (German)
    n. - Finanzen, Geldwesen, Geldmittel
    v. - finanzieren

    Ε?λ?λ?η?ν?ι?κ?ή? (Greek)
    n. δdη?μο?σsι?ο?ν?ο?μί?αa, (σsύ?σsτtη?μαa πpο?υ? δdι?έ?πpεeι? τtη?ν?) ο?ι?κ?ο?ν?ο?μί?αa, χ?ρ?η?μαaτtο?δdο?τtι?κ?έ?ς? πpη?γ?έ?ς?, (πpλ?η?θ?.) η? ο?ι?κ?ο?ν?ο?μι?κ?ή? κ?αaτtά?σsτtαaσsη? (κ?ά?πpο?ι?ο?υ?) v. χ?ρ?η?μαaτtο?δdο?τtώ?

    Italiano (Italian)
    finanziare, finanze

    Português (Portuguese)
    n. - finanças (f pl)
    v. - financiar

    Р?у?с?с?к?и?й? (Russian)
    ф?и?н?а?н?с?и?р?о?в?а?т?ь?, п?р?е?д?о?с?т?а?в?л?я?т?ь? к?р?е?д?и?т?, ф?и?н?а?н?с?ы?, д?о?х?о?д?, ф?и?н?а?н?с?и?р?о?в?а?н?и?е?

    Español (Spanish)
    n. - fondos, recursos, finanzas
    v. tr. - financiar, finanzas

    Svenska (Swedish)
    n. - finans, finansväsen
    v. - finansiera, göra finansoperationer, skaffa pengar

    中?国?琣? (Simplified Chinese)
    n. - 狞?政?, 狞?务?
    v. tr. - 供?给?...经?狇?, 狡?担?经?狇?
     

    中?國?疏? (Traditional Chinese)
    n. - 獟?政?, 獟?務?
    v. tr. - 供?給?...經?獅?, 獠?擔?經?獅?
     

    日?本?畢? (Japanese)
    n. - 獟?政?, 港?硳?, 獟?政?学?, 獟?源?, 猹?港?畁?澬?
    v. - 港?を?硳?濦?す?る?, 硳?猹?す?る?, 掛?け?売?り?す?る?, 猹?港?を?畁?澬?す?る?, 猹?港?を?供?給?す?る?
     

    ا?ل?ع?ر?ب?ي?ه? (Arabic)
    ‏?(ا?ل?ا?س?م?) ت?م?و?ي?ل? , ع?ل?م? د?ر?ا?س?ه? ا?ل?م?و?ا?ر?د? ا?ل?م?ا?ل?ي?ه? (ف?ع?ل?) ي?م?و?ل?‏?

    ע?ב?ר?י?ת?‬? (Hebrew)
    n. - ‮?מ?י?מ?ו?ן?, מ?מ?ו?נ?ו?ת?, פ?י?נ?נ?ס?י?ם?‬?
    v. tr. - ‮?מ?י?מ?ן?‬?
     

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