What is Finance?

Finance is the life blood of business. Whether it is manufacturing business or service industry, it is small business or big one, it is home trade or foreign trade, every business requires finance. In fact, finance is one of the functions of business others being production, buying, selling, transporting, storage and so on. Even all the functions of business are not possible without the use of finance.
        Finance is obtained in the form of capital (owner's equity), borrowings and retained earnings. Its uses include purchasing of current and fixed asset, paying off current and long-term liabilities and meeting expenses.
        Finance is a body of facts, principles and theories dealing with the raising (for example, by borrowing ) and using of money by individuals, business and Governments, as defined by Schall and Haley.
         Finance is indispensable in private and business lives. All human needs are met with it. In business, it is needed for research, production, buying, selling, transporting, insuring. The businessman needs finance to pay salaries, wages, rent, interest, premium, commission. He buys merchandise, land, building, equipment and supplies. They all need money.