What is the scope of corporate finance?

Business & Management
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#1

  • In every organisation or business, corporate finance has a major role. It deals with the activities such as raising funds, planning finances, investing and monitoring.

  • It acts as a bridge between markets and the business. Corporate finance aims to analyze and understand the financial problems for the business beforehand and try to prevent them.

  • Raising funds deals with two types owner’s fund and debt funds.

Owner’s funds: - It is nothing but dealing with the owners’ equity raising the finance through this.
Debt funs: - It is an external form of financing. It deals with taking corporate loans, private financing etc. Also, debentures are released for public funding.

  • There are two types of capital where the investment can be made: working capital and fixed capital.

Fixed capital: - It includes land, machinery, property etc. Manging and monitoring the risk is a challenging job where it involves a lot of tools and techniques. It is about reducing the risk and increasing the profits simultaneously.

Working capital deals with daily expenses such as transportation, raw materials, etc.