Meaning of Finance

In a globalized world, finance has become a dominating lexicon. The world revolve around the word “finance”. This word is splashed in Newspapers and roars through Television news. The budget brought by the government is a huge talking point and a major concern for the public . The opposition never stops criticizing the government on budget. And the media loves to spins it. Globalization makes the meaning of Finance all very important. The world economy is driven by finance.

But, if we trace the origin of finance, there is evidence to prove that it is as old as human life on earth. The word finance was originally a French word. In the 18th century, it was adapted by English speaking communities to mean “the management of money.” Since then, it has found a permanent place in the English dictionary. Today, finance is not merely a word else has emerged into an academic discipline of greater significance. Finance is now organized as a branch of Economics.

Finance is defined in numerous ways by different groups of people.

1. In General sense,

"Finance is the management of money and other valuables, which can be easily converted into cash."

2. According to Experts,

"Finance is a simple task of providing the necessary funds (money) required by the business of entities like companies, firms, individuals and others on the terms that are most favorable to achieve their economic objectives."

3. According to Entrepreneurs,

"Finance is concerned with cash. It is so, since, every business transaction involves cash directly or indirectly."

4. According to Academicians,

"Finance is the procurement (to get, obtain) of funds and effective (properly planned) utilization of funds. It also deals with profits that adequately compensate for the cost and risks borne by the business."

At present, we cannot imagine a world without Finance. In other words, Finance is the soul of our economic activities. To perform any economic activity, we need certain resources, which are to be pooled in terms of money (in the form of currency notes, other valuables, etc.). Finance is a prerequisite for obtaining physical resources which are needed to perform productive activities and carrying business operations such as sales, pay compensations, reserve for contingencies (unascertained liabilities) and so on.

Hence, Finance has now become an indivisible part of our day-to-day lives. The meaning of finance is extremely significant. It is discussed and debated by man-on-the-street, experts, academicians, journalists, business leaders, and politicians. Finance is ruling us.