SKOPAC TORRES, Terry Vladimir

FINANCE
CONCEPT

They are a derivation of economics that deals with the topic related to the obtaining and management
of money, resources or capital by a person or company. They refer to the way in which resources are
obtained. The way they are spent or invested, lost or profitable. Therefore, the expanded concept of
finance is that of a science that, using mathematical models, provides the tools to optimize the material
resources of companies and people.
CLASSIFICATION

PUBLIC FINANCES: PRIVATE FINANCE:

Public Finance constitutes the economic activity of the public sector, They are related to the functions of private companies and
with its particular and characteristic structure that coexists with the those state companies that operate under the theory of
market economy, from which it obtains resources and to which it optimal productivity for the maximization of profits.
provides a framework for action. It includes the assets, income and
debts that form the assets and liabilities of the Nation and all other
assets and income whose administration corresponds to the National
Power through the different institutions created by the state for this
purpose.
DIFFERENCE
SIMILARITIES 1.- Public Finances pursue Social or Collective Welfare and Private
1. Its fundamental objective is to satisfy needs.
2. Both incur costs; measured in real and monetary terms. Finances seek profit or enrichment of the investor.
3. It is an economic instrument for planning, execution and control of 2.- Public Finances achieve their income through the decree and
income and expenses. application of public tax and income laws on the private sector
4. They come together in a medium of scarce resources with multiple and state companies (coercion). Private companies receive their
purposes that compete with each other and in the end a hierarchy of income through promoting the consumption of goods and services
these purposes is established. by the community, with supply and demand coming into play.
3.- Expenses in Private Finance are planned through the expected
flow of Income. On the other hand, in Public Finance, the
Expenditure Budget is planned annually according to the nation's
priorities and then it is defined with what “income” these
IMPORTANCE “expenses” will be covered.
Finance plays a fundamental role in the RELATIONSHIP 4.- Public Finance has coercive action while Private Finance has
success and survival of the State and private WITH THE ADMON. voluntary action.
companies, as it is considered an instrument
of planning, execution and control that has a The finance-administration relationship is FIELDS OF
infinite, starting from money and the STUDY
decisive impact on the business and public
economy, extending its effects to all spheres. extent to which we know how to use it. It is The field of study of the science of Finance is
of production and consumption. evident that the objective of a company, financial activity and financial phenomenon.
business or individual is to retain money, This is the management carried out by the
but to use it in the attempt to achieve the state and other secondary public entities, to
goals set by management, shareholders or provide themselves with sufficient economic
CONCLUSION
any individual, whether in public, means to cover the expenses of public
In conclusion, it can be said that finance is all the
commercial or individual administration. services, as well as the execution of those
activities and decisions made by company
This relationship consists of managing same expenses. Financial activity begins
managers with the main objective of
assets, income and expenses with common from the moment the State achieves public
commenting on their assets and this is classified
sense. income from land income, from the oil or
into public finance: economic activities of the
mining industry, from the income of public
public sector, these finances study the resources
and the needs of the community sought above all INTERNATIONAL FINANCES industries or companies as well as from
private entities (taxes, fees, credits). public).
to satisfy public needs. The relationship between
finances and administration is based on finding CONCEPT
money and knowing how to use it.
In international finance, cash flows across national borders are studied. National financial management is
the decision-making process about cash flows that occurs in the context of multinational companies.
International finance describes the monetary aspects of the international economy. It is the macroeconomic
part of the international economy. The central point of the analysis is the balance of payments and the
processes of adjustment to imbalances in said balance. The fundamental variable is the exchange rate.
 SKOPAC TORRES, Terry Vladimir

CLASSIFICATION ACCORDING TO

INTERNATIONAL ECONOMY: INTERNATIONAL CORPORATE

FINANCE:

 Adjustment processes to balance of

payments imbalances.  Functioning of international financial
 Exchange regimes. markets.
 Factors that determine the exchange  Derivative products market (futures, options,
rate. swaps).
 Parity conditions.  Financing of different activities both in the
 International monetary system. short and long term.
 Evaluation and management of exchange risk.
IMPORTANCE  Currency speculation.
 Investment in international portfolios.
The study of international finance is important, in view of the increasing
globalization of the economy. Knowledge of international finance allows the
Financial Executive to understand how international events can affect their
company and what measures should be taken to avoid the dangers and take
advantage of the opportunities offered by changes in the international
environment.

THE FINANCIAL INTERNATIONAL INTERNATIONAL

INTERNATIONAL BROKERS FINANCIAL FINANCIAL
FINANCIAL Investment Banking has the function of INTERMEDIARIES ADMINISTRATION
The International
SYSTEMFinancial (or an advisor rather than an intermediary.
This bank does not collect money from  Inter-American Development
Monetary) System are all the The main objective of
the public, but what it does is sell a Bank IDB .
institutions through which international financial
specialized service, it "sells knowledge",  Andean Development
transactions that go beyond a management is to
its function is to advise people, but Corporation CAF .
single country are paid. This maximize the wealth of the
generally to companies in their  International Monetary Fund
system determines how shareholders of the
investments, they are capable of IMF .
exchange rates are set and how multinational company,
governments can influence carrying out company sales, company  World Bank :
through the development
them. valuations, mergers, acquisitions,  Import and Export Bank
of the best financial policies
financial projections, valuation of real  IFC International Financial and the consequent making
estate, properties, issuance of shares, Corporation . of the best decisions of this
bonds and debt, among others. nature.

CONCLUSION
Knowledge of the area of international finance has grown enormously in recent years, there is a greater understanding of many problems that
previously seemed enigmatic. The study of international finance is part of the international training of executives and entrepreneurs, important in
view of the increasing globalization of the economy.
Knowledge of international finance allows the financial executive to understand how international events can affect their companies and what
measures must be taken to avoid the dangers and take advantage of the opportunities offered by changes in the international environment.