essence of Finance is the aggregate of economic relations, which are formed as a result, distributed and used cash.
Areas of Finance
financial system of any state has three core areas of activity:
- sphere of public finances (The system is based budgets of national and local scale, as well as budgetary and other funds);
- sphere of finance companies (base - finance entities);
- sphere of personal finance (budgets individuals).
All these areas are closely connected with each other.Forms of financial relationships are a manifestation of this connection.
forms of financial relations
essence of Finance assumes the following financial ratio:
1. Cash ratio occurring between the government and households, are shown in the payment of taxes and obligatory payments received by the local and national budgets.The state holds social benefits, payment of wages to individual citizens.
2. Cash ratio occurring between the enterprise and household (employees) are to ensure the budget of individuals through wages, social benefits, dividends, and interest on the securities.
3. Cash relations with the state enterprises are to ensure a profitable part of local and national budgets through tax deductions and mandatory fees, lease payments on government systems.The state, in turn, from the budgetary resources of different levels, invests and provides preferential loans to enterprises.
Finance individual enterprises are key in shaping the country's financial system and ensure its effective economic and social development.
Finance companies have a great impact on the essence of finance in general, as it promotes the rational conduct of the turnover of funds in the country and their efficient use in the economy.
main signs of Finance
- concept refers exclusively to monetary relations.
- Forced form of manifestation.
- redistributive.
functions of finance companies
main functions that perform the finance companies are:
Resursoobrazuyuschaya function
It causes systematic formation of the required financial resources, using a variety of other sources, to ensure that business activities and implement targets setenterprise development.
distribution function
This function is closely linked to resursoobrazuyuschey.It optimizes the distribution of the aggregate proportion of all available resources through a separate trust funds which provide financing and investment operations, as well as return the principal on loans received earlier.
Control function
With it exercises control over the results obtained from investing and operating activities of the enterprise, as well as control the process of formation, distribution and use of financial resources in accordance with the planned budget.
From all written above it can be concluded that the essence of corporate finance is the set of processes of formation, distribution and use of revenues of various companies.
