Business Finance

Chapter 01
Introduction
 Business
• All the activities are concerned with the economic activities and
very particular to earning profit is called as business.

• Increasing the profit is the main aim of any kind of economic

activity.
1. Sole Proprietorship Types of Business
 A business owned by one individual is called as sole proprietorship.
 Advantage
 They are easily and inexpensively formed.
 They are subject to few government regulation
 They are subject to lower income taxes than corporations
• Disadvantage
•
Types of Business
Proprietors have unlimited personal liability for the business’s debts .

• It is difficult for proprietorships to obtain large sums of capital

• Partnership
• Types of Business
A partnership is a legal arrangement between two or more people who decide to do business together.

• Corporation
•
A corporation is a legal entity created by a state, and it is separate and distinct from its owners and managers.
 Meaning and Definition of Finance
• Meaning: Is the provision of money at the time when it is needed.
• Management of money is called as finance.
• Finance is a money.
•
Business Finance
Business finance is that business activity which concerns with the acquisition of capital funds in meeting
financial needs and overall
objectives of a business enterprise”

• The activity concerned with planning, raising, controlling, administering of the funds
used in the business
 Financial Management
• Is the operational activity of a business
that is responsible for obtaining and effectively utilizing the funds necessary for efficient operations.
• It is concerned with the efficient use of an important economic resource namely, capital funds.
• Concern with the acquisition, financing and management of assets with some overall goal in mind.
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