Finance | investment, financing and risk management
Anyone who says finance, must also say investment banking, talking about stock analysis, must not neglect neural networks and should know what is behind the terms forecast and portfolio management.
Finance is part of the business process and can be found in any company.
Financial processes, important as they may seem, are no longer indispensable auxiliary functions, but not less. Companies live from production and trade. Their programs specify what is produced in which circulation, and how and at what price the goods or services are sold. However, certain production capacities of Noten for which the required capital is not always available are also required for the intended production. Sometimes external funds are needed if own investments can not meet the capital requirements. The primary role of the financial industry is to consider and weigh the different funding options. Thus, the assurance of a financial balance must be able to be established. It requires the ability to pay of the company at any time.
Business decisions only reach their full significance against the background of financial entrepreneurial goals.
On the other hand, production and sales are really only secondary, because this pair of concepts is only a means to the purpose of cash inflow and outflow of a company. The fact that production and sales are only part of the corporate financial goals is obvious, because they do not only use the associated in-plant investment opportunities. If there are good external bargains that promise a higher return on investment than the investment in the business, the financial economists quickly become weak.
The financial sector can be seen as a service function, responsible for the smooth functioning of operations in the real economy. But if money transfer services can generate a substantially higher return than is possible through the production and trading of assets and the provision of services, this can trigger economic crises. Similar things have been observed in the recent past in the real estate and financial sectors. If the greed wins for profit and thus the actual tasks remain in the background, this can have very rbel smelling effects. In the environment of investing, it is not without reason so aptly: Greed eats brain.
The area of finance is divided into investment, financing and risk management. These three posts determine the financial situation of a company. The way in which a company procures money capital and for what services it uses it is of crucial importance.
If the financial industry determines that money capital has to be procured, then it is spoken of a financing. By contrast, the use of funds for projects is an investment. As part of business administration, the financial industry has the task of keeping the company running with the optimality of projects and their evaluation. If it thrives, so much the better. A good and correct decision can only be filled by the comparison of equity and debt, as well as their hybrid forms.