İxtisas: Biznesin idarə edilməsi Kurs: 1 Qrup: 721 b fənn: İngilis dili Mövzu: finance müəllim: İsrafilova Çinarə

2.Areas of finance

As above, finance comprises, broadly, the three broad areas of personal finance, corporate finance, and public finance. Although they are numerous, other areas, such as development finance, investments, and quantitative finance (discussed below), typically overlap these; likewise, specific arrangements such as Public–private partnerships.

Personal finance. Personal finance is defined as "the mindful planning of monetary spending and saving, while also considering the possibility of future risk". Personal finance may involve paying for education, financing durable goods such as real estate and cars, buying insurance, investing, and saving for retirement.  Personal finance may also involve paying for a loan or other debt obligations. The main areas of personal finance are considered to be income, spending, saving, investing, and protection.

Corporate finance.Corporate finance deals with the sources of funding and the capital structure of corporations, the actions that managers take to increase the value of the firm to the shareholders, and the tools and analysis used to allocate financial resources. Short term financial management is often termed "working capital management", and relates to cash, inventory and debtors management. The goal is to ensure that the firm has sufficient cash flow for ongoing operations, to service long-term debt, and to satisfy both maturing short-term debt and upcoming operational expenses. In the longer term, corporate finance generally involves balancing risk and profitability, while attempting to maximize an entity's assets, net incoming cash flow and the value of its stock.

The latter creates the link with investment banking and securities trading, as above, in that the capital raised will generically comprise debt, i.e. corporate bonds, and equity, often listed shares.

While corporate finance is in principle different from managerial finance, which studies the financial management of all firms rather than corporations alone, the main concepts in the study of corporate finance are applicable to the financial problems of all kinds of firms. Although financial management overlaps with the financial function of the accounting profession, financial accounting is the reporting of historical financial information, whereas as discussed, financial management is concerned with increasing the firm's Shareholder value and increasing their rate of return on the investment. In this context, Financial risk management is about protecting the firm's economic value by using financial instruments to manage exposure to risk, particularly credit risk and market risk, often arising from the firm's funding structures.

Public finance.Public finance describes finance as related to sovereign states, sub-national entities, and related public entities or agencies. It generally encompasses a long-term strategic perspective regarding investment decisions that affect public entities. These long-term strategic periods typically encompass five or more years.