The main techniques and sectors of the financial industry
Thursday, November 1, 2007 | | |An entity whose incomes are greater than its expenditure can lend or invest the surplus of income. On the other hand, an entity whose income is less than its expenditure can raise capital by borrowing or selling equity loans, reducing spending or increase revenues. The lender can find a borrower, a financial intermediary, like a bank or buy tickets or obligations on the bond market. The lender receives interest, the borrower pays an interest rate higher than the lender receives, and the financial intermediary pockets the difference.
A bank aggregates the activities of many borrowers and lenders. A bank accepts deposits from donors, on which it pays interest. The bank then lends these deposits to borrowers. Banks allow borrowers and lenders, of different sizes to coordinate their activity. The banks are thus compensating cash flows in space.
An example of corporate finance is the sale of shares by a company to institutional investors such as investment banks, which in turn sell to the public. The stock gives whoever is the owner partly owned by the company. If you buy a share of XYZ Inc., and they have a capacity of 100 shares outstanding (held by investors), you are 1 / 100 owner of that company. Of course, in return for shares, the company receives the money it uses to develop its activity in a process called "financing". The mixed financing with the sale of bonds (or any other debt financing) is called the company the capital structure.
Finance is used by individuals (personal finance), government (public finance), by businesses (corporate finance), and a wide variety of organizations including schools and non-profit organizations. In general, the objectives of each of these activities are conducted through the use of appropriate financial instruments, taking into account their institutional framework.
Finance is one of the most important aspects of business management. Without a financial planning a new business is unlikely to succeed. Managing money (a liquid) is essential to ensure a secure future, both for the individual and an organization.
A bank aggregates the activities of many borrowers and lenders. A bank accepts deposits from donors, on which it pays interest. The bank then lends these deposits to borrowers. Banks allow borrowers and lenders, of different sizes to coordinate their activity. The banks are thus compensating cash flows in space.
An example of corporate finance is the sale of shares by a company to institutional investors such as investment banks, which in turn sell to the public. The stock gives whoever is the owner partly owned by the company. If you buy a share of XYZ Inc., and they have a capacity of 100 shares outstanding (held by investors), you are 1 / 100 owner of that company. Of course, in return for shares, the company receives the money it uses to develop its activity in a process called "financing". The mixed financing with the sale of bonds (or any other debt financing) is called the company the capital structure.
Finance is used by individuals (personal finance), government (public finance), by businesses (corporate finance), and a wide variety of organizations including schools and non-profit organizations. In general, the objectives of each of these activities are conducted through the use of appropriate financial instruments, taking into account their institutional framework.
Finance is one of the most important aspects of business management. Without a financial planning a new business is unlikely to succeed. Managing money (a liquid) is essential to ensure a secure future, both for the individual and an organization.
