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What is Finance – Meaning

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The term finance is derived from the Latin word ‘finis’ which means end/finish. Finance can also be interpreted in many ways such as fund, money, investment, capital, amount etc. Finance act as a medium for business which involves the acquisition and usage of funds in various departments such as production department, purchase department, research and development etc.

Finance is the life blood of business. Finance is provision of money at the time when it is required. Finance is an art and science of managing money. Finance is the set of activities dealing with the management of funds. More specifically, it is the decision of collection and use of funds.

Finance also refers to the science that describes the management, creation and study of money, banking, credit, investments, assets and liabilities. Finance consists of financial systems, which include public, private and government bodies and the study of finance and financial instruments, which can relate to countless assets and liabilities.

For instance, when a manager has to buy machinery for a production process, fund in order to procure it for further process. Fund is also required in the human resource department for providing training to their employees. In a nutshell it can be stated that every department needs finance for their business operations.

Hence, Finance has been rightly termed as universal lubricant which keeps the enterprise dynamic.

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