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Advantages And Objectives Of Finance

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Finance is a vast area of facts, principles and theories dealing with various ways of raising and using it by individuals and others. It deals with how individuals and companies divide their business income between consumption and how to choose from among the available investment opportunities and how they raise money for increased consumption or investment.

It also encompasses the study of financial Markets, institutions and activities of Government, with stress on those aspects relating to financial decisions of individuals and companies. In fact finance is so indispensable, that it is rightly said that Finance is the Life Blood of an Enterprise.

Finance acts, as a mainspring in a watch, where without the mainspring the watch is of no use, that is mainspring is a must for the perfect functioning of the watch. Finance …show more content…

1.1 Objectives of Finance: -

The main objective of finance is to arrange as much as funds for the business enterprise as required from time to time. The other objectives of finance are as follows:

1. Acquiring sufficient funds:

This objective of finance is to fulfill the financial needs of an enterprise and to find out suitable sources to raise the funds. The funds could be raised from Long-term sources like Share Capital, Debentures, Term Loans and Owner funds and from short term sources like shot term investment, loans and advances etc.

2. Increasing Profitability:

Is one of the important objective of finance. This objective aims at increasing profitability of the concern. To increase profitability sufficient funds will have to be invested. The finance function should be so planned that the concern neither suffers from inadequacy of funds nor surplus of funds then required. The cost of acquiring funds should be such that it results in maximum

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