Dr. Zulfiqar Hasan
Fundamentals of Finance is a basic course for all major students in BBA, MBA or any other business related program.
Finance is the process of transferring fund from surplus economic sector to deficit economic sector.
Virtually all individuals and organizations earn or raise money and spend or invest money.
Finance is the processes by which money is transferred (financing and investing) among businesses, individuals, and governments.
Finance is also known as the management of money, credit, banking and investments
Types of Finance
Private Finance, which includes the Individual, Firms, Business or Corporate Financial activities to meet the requirements.
Public Finance which concerns with revenue and disbursement of Government such as Central Government, State Government and Semi-Government Financial matters.
Business Finance: Business finance is that business activity which concerns with the acquisition and conversation of capital funds in meeting financial needs and overall objectives of a business enterprise”.
Corporate finance is concerned with budgeting, financial forecasting, cash management, credit administration, investment analysis and fund procurement of the business concern and the business concern needs to adopt modern technology and application suitable to the global environment.
Profit Maximization and Wealth Maximization
Main aim of any kind of financial activity is earning profit. A business concern is also functioning mainly for the purpose of earning profit. Profit is the measuring techniques to understand the business efficiency of the concern. Profit maximization is also the traditional and narrow approach, which aims at, maximizes the profit of the concern firm. Profit maximization is also called as earnings per share maximization. It leads to maximize the business operation for profit maximization.
Wealth maximization is one of the modern approaches, which involves latest innovations and improvements in the field of the business concern. The term wealth means shareholder wealth or the wealth of the persons those who are involved in the business concern. Wealth maximization is also known as value maximization or net present worth maximization that means maximization of the market price of share.