Divine Word College

of Laoag
Basic Education
Laoag Ilocos Norte

An Insight Paper
Final Requirement in
Business Finance

Submitted by: Louisse Jane Valdez

Submitted to: Mr. Chester Tacmo
 “Finance brings a business to life”
Finance is the art and science of managing your company’s fund. The role of finance in
the business world is to make sure there are enough funds to operate and that you’re to
operate and that you’re spending and operate wisely.Finance is the backbone of a
business, it is crucial to the success and failure of a business, Finance is the process of
creating, moving and using money, Finance is also the elixir that assists in the formation
of new businesses, and allows businesses to take advantage of opportunities to grow,
employ local workers and in turn support other businesses and local, state and federal
government through the remittance of income taxes. Finance encompasses banking,
leverage or debt, credit, capital markets, money, investments, and the creation and
oversight of financial systems.

It is a widespread term which is defining two activities all together at the same time.
First is, that it’s the study of managing the money. And secondly, it’s the actual process
of the funds required by some individual or business to get their work or business grow.
Or we can say, that finance is a field dealing with capital funds and credit funds invested
in the business. It can be defined as planning, raising, managing and controlling all the
money used in the business. Businesses need finances for daily operations and to meet
essential expenses and payments. The importance of business finance lies in its
capacity to keep a business operating smoothly without running out of cash while also
securing funds for longer-term investment. The strategic use of financial instruments,
such as loans and investments, is key to the success of every business. The strategic
use of finance is key to the success of any business and it is extremely important that
every company…large or small…have a handle on its finances and understand how to
manage them properly to preserve the business as a viable entity there are several
theories that illustrate the crucial role played by finance in the world today: managing
risk, providing important price signals, curbing agency problems and eliminating
informational irregularities being the most essential ones. In business, the work of a
finance team is to ensure that the company has sufficient resources to work in the best
way possible and to maximize productivity.
And also to check that the fortune which company has invested is used for the right
purpose. And the company’s expenses and wealth are well managed.

An entrepreneur’s dream or idea can’t be fulfilled without some sort of cash infusion into
the business. For a start-up company, it usually starts with some investment from the
stakeholders and can also include friends’ or family members’ money. As the business
grows, ownership will need to turn to a third party for additional financing. This can take
the form of debt or equity financing.Finance brings a business to life. The role of finance
in business is also to make sure there are enough funds to operate and that you're
spending and investing wisely. For example, an individual can borrow money from a
bank to buy a home or an industrial firm can raise money through investors to build a
new factory. Governments can issue bonds to raise money for projects. Finance plays
an important role in the economy. As banks, credit unions, and other financial
institutions provide credit, they help expand the economy by directing funds from savers
to borrowers.
Finance is the source of business, which cannot be efficiently operated without finance,
the reason being that with the help of Finance, purchase of commodities and raw
materials, sending of products to the consumers, conversion of raw materials into
finished product and sale thereof become possible. With finances, various commodities
may be purchased or sold or produced.

Finance is vital to the formation and orderly operation of just about any business.
Finance is the blood of business organization without finance a business have no
identity. Finance is critical in just about every business decision, from planning and
budgeting and cash flow management to the capital structure and how you control risks
and costs. Businesses run on money, and business finance guides you to make shrewd
and prudent decisions about cash flow and longer-term funding strategies. As you
develop skills and strategies for using the funds you have and for accessing additional
capital when needed, you'll improve your company's profitability and increase your
potential for leveraging new opportunities.