business finance Article

business finance summary

verifiedCite
While every effort has been made to follow citation style rules, there may be some discrepancies. Please refer to the appropriate style manual or other sources if you have any questions.
Select Citation Style
Feedback
Corrections? Updates? Omissions? Let us know if you have suggestions to improve this article (requires login).
Thank you for your feedback

Our editors will review what you’ve submitted and determine whether to revise the article.

External Websites
Below is the article summary. For the full article, see business finance.

business finance, Raising and managing of funds by business organizations. Such activities are usually the concern of senior managers, who must use financial forecasting to develop a long-term plan for the firm. Shorter-term budgets are then devised to meet the plan’s goals. When a company plans to expand, it may rely on cash reserves, expected increases in sales, or bank loans and trade credits extended by suppliers. Managers may also decide to raise long-term capital in the form of either debt (bonds) or equity (stock). The value of the company’s stock is a constant concern, and managers must decide whether to reinvest profits or to pay dividends. Other duties of financial managers include managing accounts receivable and fixing the optimum level of inventories. When deciding how to deploy corporate assets to increase growth, financial managers must also consider the benefits of mergers and acquisitions, analyzing economies of scale and the ability of businesses to complement each other. See also corporate finance; inventory.