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Topics in Corporate Finance
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Capital Budgeting Return on Investment Managerial Finance |
Corporate Action Real Options |
Balance Sheet Analysis Mergers and Acquisitions Working Capital Management |
Corporate Finance Definition
The finance which is meant for the financial decisions and activities dealing with monetary decisions that deal with a company or an entity. In other words, Corporate finance deals with the company’s financial issues associated with achieving the company’s goal, that What the Corporation should do to raise and manage its capital? , Where the firms should make the investments? , acquisitions?What portion of profits should be returned to shareholders in the form of dividends? And Should the company go for acquisitions?
The finance planning for the corporate finance can be divided into Long-Term and Short-Term decisions and techniques.
Long –Term decision for Corporate can be the Capital Investment, which deals with the investments in the project received by the company, whether to finance that investment with equity or debt and when or whether to pay the profits in the form of dividends to the shareholders. Whereas,
Short –term decision for the Corporate deal with the managing of the balance sheet, i.e. the management of the current assets and the current liabilities.
In many countries like the United States, Corporate Finance is used to describe activities, decisions, and techniques that deal with many aspects of a company’s finances and capital. In the United Kingdom, Corporate Finance is associated with Investment Banking, which means the institutions which help with transactions in which capital is raised for the corporations. Corporate finance is about the financial decisions made by the corporations.
Corporations are categorized in three different ways:
a) Corporations which are legally distinct from its owner and pay their own taxes.
b) Corporations which have limited liability, in which the investors might only lose their initial investment in case of the company gets bankrupt.
c) Corporations have separated ownership and control as owners are rarely managing the firm. In business, every decision is being made by keeping all the aspects of the better utilization of the resources available should have a better financial implication.
