What is Finance?

Finance is the funding and management of money for personal or business use. The study of finance encompasses:

  • The nuances of gains and loss
  • Management
  • Banking activities
  • Credit
  • Investments
  • Assets
  • Liabilities

Studying the art of finance can help with the management of a household, entrepreneurship, or larger business. A study of basic finances will cover an overview of the main topics of finance, while a more categorical approach will focus on a specific type of financial study. Three main types of financial literacy critical to the finance field are corporate finance, personal finance, and public finance.

Corporate finance is the study of financial management and activities regarding a corporate business. Corporations, legally, are business entities and usually have a financial department to oversee the activities of the business. Large, publicly traded corporations on the market may offer stock to raise funds for their company. Starter corporations may receive funding from investors.

Personal finance is the study of financial management and activities regarding one's personal life and home. This activity entirely depends on one's income, personal economic activities, requirements for living, and retirement goals. Activities included in personal finances may cover the use of:

  • Credit cards
  • Personal loans
  • Mortgages
  • Banking
  • Investments

A study of public finances looks at how the government pays for public services, infrastructure, and goods. The government does this by taxing its citizens, budgeting, and allocating the resources to spend. Public financing includes state and federal governments, taxing oversight, and distribution of these resources. Public financing also includes borrowing funds from banks and other nations to ensure financing for the government.

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Finance Topics

Capital Budgeting

Learn about capital budgeting decisions with examples. See different types of capital budgeting techniques, such as payback period and internal rate of return.

Corporate Finance

Learn the definition of corporate finance and see the importance of its different roles in business decisions. Learn about capital budgeting and capital sources through an example.

Cost of Capital

Learn about the cost of capital. Understand what the cost of capital is, learn how to calculate the cost of capital using a formula, and see examples.

Financial Analysis

Explore different types of financial analysis. Find out what financial analysis is and understand its important techniques. See financial analysis examples.

Financial Analytics

Learn about financial analytics and understand the importance of data analytics in finance. Explore the types of analytics and see how financial analytics is used.

Financial Economics

Explore the different methods of financial economics. Examine what financial economics is and understand its importance. See financial economics examples.

Financial Institutions

Discover the financial institution definition. Read about the types of financial institutions and their functions. See examples of some of the largest financial institutions.

Financial Markets

Learn about financial markets and understand how they work. Explore the different types of financial markets, such as the stock market and the bond market.

Financial Planning

Learn about financial planning. Discover the goals and benefits of a financial plan. Explore the components of financial plans and examples of financial planning.

Personal Finance

Learn the personal finance definition and understand the importance of personal finances. Explore its foundations and see the types of personal finance.

Time Value of Money

Study the time value of money formula. Learn the time value of money definition and practice how to calculate time value of money to understand the relation to purchasing power.

Finance Resources

At study.com, you can find many resources for financial literacy. An understanding of finances can help you understand the importance of saving, retirement funds, or how to invest in the stock market. Resources for business finances, including small business, corporate finance, and healthcare financing are all available here!

Finance Courses

Study.com has many valuable finance courses. Learn about basic finances by studying an overview of financial management and activity. Choose to learn about personal finance and better understand unique situations regarding financial decisions. Corporate finance courses are also available if one desires to learn more about financial management and the nuances of business. Most courses are eligible for college credit.

Finance 101: Principles of Finance

Finance 101 is a college-level course and is eligible for credit. This course introduces concepts and topics of corporate finance, financial statements, financial planning, valuation, investment, dividends, financing, planning, and management.

Finance 102: Personal Finance

Finance 102 is a college-level course and is eligible for credit. This course covers personal finance, money management, taxes, checking and savings accounts, interest rates, credit, loans, significant purchase planning, insurance, and investing.

Finance 104: Financial Management

Finance 104 covers various topics such as financial systems, valuation, bonds, cash flow, capital structure, and dividends. This course has many lessons about stocks, securities, and investing. This course is a college-level course eligible for credit.

Finance 301: Corporate Finance

Finance 301 focuses on corporate finance concepts and topics and is eligible for college credit. Study topics include learning how to prepare balance sheets and income statements, valuation of stocks and bonds, investment portfolios, and risk analysis.

Finance 302: International Finance

This international finance course is recommended for college credit. Topics include the history of money, globalization, multinational firms, foreign exchange markets, currency changes, risk management, strategic decisions, and financial scams and crises.

Frequently Asked Questions

  • What are the three types of finance?

    Basic finance is an overview of the main topics of financial study. Three main types of finance are corporate finance, personal finance, and public (government) finance.

  • What are finances in business?

    Business or corporate finances include studying a business's financial activities and managing funds. These activities may include publicly trading stock to raise funds or getting money from investors.