Finance management for business Assignment Example | Topics and Well Written Essays - 2000 words

Finance management for business - Assignment Example All financial activities, starting from the capital investment decision making to the investment banking, come under the category of corporate finance (Ehrhardt, 2013). Among all these domains, one of the most important departments of corporate finance is related to the capital investment decisions. It deals with various factors such as, whether a proposed investment should be carried out or not, the proportion of equity and debt investment involved in the investment pattern, whether the shareholders should be provided dividends on the investment made and various other decision making purposes (Megginson and Smart, 2008). The short term issues handled in this domain includes the management of current liabilities and current assets, investments, inventory control and other short term financial factors. The long-term issues deal with new capital investments and capital purchases. Investment analysis is one of the important parts in corporate finance. The role played by a corporate fina ncier is to evaluate the financial needs of an organisation for raising the capital best suitable for the required needs. b) Difference between corporate finance and corporate funding requirements Corporate funding requirements are the necessities for which funding is required by a corporation. On the other hand, corporate finance is the department which deals with the financing of such requirements. Corporate finance deals with the requirements and management of such funding (Gallagher and Andrew, 1968). As already stated above, the function of the corporate financier is to evaluate the financial needs of the organisation that is required for raising the most appropriate capital funding pattern to finance such needs. c) Debt and Equity Financing The debt and equity financing strategies are two entirely different types of financing strategies. The debt financing indicates that the owner of the business has borrowed more money from the external sources for financing the operational a ctivities. On the other hand, equity financing implies the funding by the business owner from the internal sources by means of issuing equity shares