Finance is a broad term for things about the science, development, and management of funds and investments. In particular, it concerns the questions of why and how a person, business or government obtains the funds necessary to operate an enterprise; and what those funds are used for. Finance is important in all kinds of organizations, not just in businesses. It is used to describe the entire range of problems that involve getting money to be spent or returned to investors as a result of returns on capital invested. The other part of finance is the area of credit. This refers to the practices by which borrowers acquire the money they need to operate an enterprise and to repay them when they have finished using it.
The term finance also encompasses many other activities, including management of cash flow, securities borrowing, asset management, financial markets, government spending, commodity markets, foreign exchange, insurance, bank lending, and private equity. Finance is usually used to describe an ongoing process. That process begins with an investment decision, moves through the investment plan to maturity, and then uses collected cash to make future payments. It can also refer to the process by which current assets and current liabilities are converted into cash that will be available to fund future projects. The total area of current financial position is the sum of all financial activities affecting the value of a particular asset.
Many banks offer specialized finance departments that handle specific financial services. In the United States, the most common types of banking are commercial banks and savings and loan institutions. The most common services provided by financial services companies are savings, loan, investment, and deposit banking. The world financial system as a whole operates on similar lines, though there are considerable differences in the services provided by the different types of institutions.
Finance graduates will generally focus their studies on business and accounting, although some business degree holders choose to specialize in economics. Business school graduates looking for jobs in finance should have strong math skills and be able to analyze and communicate financial information. Finance curriculum emphasizes economics as a major subject. Some of the topics that are covered in a typical degree program include consumer and business expenses, consumer credit, business finance, public finance, government finance, and corporate finance.
Finance jobs require a variety of approaches. Most finance positions involve managing the macroeconomic environment, which involves the evaluation of national economic policies and programs. Finance graduates can pursue positions as bankers, economists, or policy makers in government. They can also work for private financial firms, investment banks, or corporations. There are many options for those seeking entry-level finance positions, including investment banking, investment management, venture capital, financial planning, mortgage banking, private real estate financing, corporate finance, and nonpublic finance.
Those with backgrounds in finance can find work in banking, insurance, health care, corporate finance, and other types of financial services. There are a number of agencies that offer careers in corporate finance. A postgraduate degree in finance is usually required in order to start a career in corporate finance. Finance graduates can also opt to work in public finance, which targets institutions and agencies of the municipal government such as schools, colleges, universities, and cities.