Characteristics Or Features Of Corporate Finance

Characteristics or Features of Corporate Finance

The points below verbalise over the characteristics or features of corporate finance.

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1. Financial Activity : Corporate finance is a fiscal activity. It includes planning, raising, investing as well as monitoring the finance of the company. In short, it includes all the fiscal aspects of the company. This piece of work is done yesteryear the fiscal subdivision headed yesteryear the finance manager.
2. Raising the finance : Corporate finance includes raising (collecting) finance for the company. Finance tin hold upward collected through shares, debentures, depository fiscal establishment loans, etc. It is rattling hard for novel companies to collect finance because the investors exercise non lead maintain confidence inward novel companies. However, it is rattling slow for reputed companies to collect finance due to their well-established goodwill inward the market.
3. Investing the finance : Corporate finance too includes investing (using) the finance. The finance is used to accomplish the objectives of the company. It is used to buy fixed assets. It is too used for running the company. The finance must hold upward used profitably.
4. Objective oriented : Corporate finance is objective oriented. That is, it is used to accomplish the objectives of the company. The primary objectives are, viz., (i) To earn maximum profits, (ii) To plough over a proper dividend to the shareholders, as well as (iii) To exercise a proper reserve for futurity increment as well as expansion, etc.
5. Types of finance : There are 2 types of corporate Finance, viz., fixed uppercase as well as working capital. Fixed uppercase is too called long-term finance. It is used to consider the long-term needs of the company. It is used to buy fixed assets. Working uppercase is too called short-term finance. It is used to consider the short-term needs of the company. It is used to pay the day-to-day expenses of the company. Medium term finance is too used to consider the medium term needs of the company.
6. Relationship alongside other departments : Corporate finance has a unopen human relationship alongside all other departments inward the company, i.e. Production Department, Marketing Department, etc. This is because all departments involve finance continuously.
7. Dynamic inward nature : Corporate finance is dynamic inward nature. It goes on changing according to the changes inward environment, circumstances, times, etc. So, the finance managing director must occupation novel as well as innovative ideas for collecting as well as investing money. He must occupation inventiveness piece doing his job.
8. Requires proper planning as well as control : Corporate finance requires proper planning as well as control. Planning is required to collect finance from the investors. It is too required for investing the finance. Control is required to uncovering out whether the finance is invested properly or not. If the finance is non invested properly, as well as then corrective measures must hold upward taken.
9. Managing finance is an fine art as well as science : Managing finance is an Art because it requires human skills as well as judgement. It is a Science because it follows a systematic approach.
10. Legal requirements : There are many legal requirements for corporate finance. The fellowship has to accept permission, from the Controller of Capital Issues, for collecting finance from the public. The fellowship too has to follow all the rules of SEBI. Influenza A virus subtype H5N1 Sole Trader as well as Partnership Firm involve non follow these rules.
11. Important component subdivision of draw of piece of work concern management : Corporate finance is an of import component subdivision of business finance. "Finance is the life blood of business." Finance is required for all draw of piece of work concern activities. It is required for promoting business. It is required for conducting the draw of piece of work concern smoothly. It is required for expansion, diversification, modernization, replacement of assets, etc. Finance is too required for paying taxes, dividend, involvement as well as for coming together contingencies.