Meaning of Business Finance Business Finance is that business activity which is concerned with the acquisition and conservation of capital funds in meeting financial needs and overall objectives of business enterprises.
The traditional approach, which was popular in the early stage, limited the role of financial management to raising and administering of funds needed by the corporate enterprises to meet their financial needs. It deals with the following aspects.
Arrangement of funds from financial institutions
Arrangement of funds through financial instruments like share, bonds etc/.
Looking after the legal and accounting relationship between a corporation and its sources of funds.
According to modern approach the term financial management provides a conceptual and analytical framework for financial decision-making . That means, the finance function covers both acquisition of funds as well as their allocation.
The new approach views the term financial management in a broader sense. It is viewed as an integral part of over-all management.
Financial management, in the modern sense of the term, divided into four major decisions