Business Finance Module 1: Understanding Finance | Overview | Grade 12
Summary
TLDRThis educational video script covers Module 1 and 2 of Business Finance, focusing on the foundational concepts and practical applications. Module 1 introduces finance as a blend of science and art, emphasizing the dynamic nature of financial practices adapting to business environments. It delves into the interplay between economics, accounting, and finance, highlighting the importance of efficient resource allocation and decision-making. The module also outlines the areas of finance, distinguishing between private and public finance, with a spotlight on personal and business finance. Module 2 transitions into financial institutions, instruments, and markets, setting the stage for deeper exploration in subsequent lessons.
Takeaways
- 📚 The video discusses Module 1 and Module 2 of Business Finance, covering topics from the first week of the semester.
- 💡 Finance is defined as the science and art of applying economic and accounting concepts to manage financial resources.
- 🌐 Economic concepts in finance focus on the efficient use of resources, while accounting is seen as the language of business and finance, dealing with daily transactions and financial statements.
- 🔍 Finance is dynamic and adapts to changes in the business environment, influenced by customer needs and market conditions.
- 📈 Accounting emphasizes accuracy and the preparation of financial statements, whereas finance is more focused on decision-making and planning for the future.
- 🏦 The areas of finance include private finance (personal and business finance) and public finance, with the video focusing on business finance.
- 📊 Business finance encompasses financial management, capital markets, and financial investments, which will be discussed in subsequent modules.
- 👔 In a business organization, finance is a functional area that may include departments like accounting, treasury, and finance officer roles.
- 🏢 The organizational structure can vary, with some companies having separate divisions for finance and operations, each with its own set of responsibilities.
- 📈 The video concludes with a transition to Module 2, which will delve into financial institutions, instruments, and markets.
Q & A
What is the definition of finance according to the video?
-Finance is described as both a science and an art of the correct application of economic and accounting concepts, principles that define the system, structure, process, management, allocation, and station of financial resources, investment, and expenditure.
How does the business environment affect financial practices?
-The business environment is constantly changing due to customer needs and wants. Financial resources and practices must adapt to these changes to remain effective.
What is the relationship between finance and economics?
-Finance was traditionally considered an integral part of economics. Economics is concerned with the efficient utilization of scarce resources, and finance applies this concept to utilize the resources within an organization.
Why is accounting referred to as the language of business and finance?
-Accounting is referred to as the language of business and finance because it involves the recording of day-to-day transactions and the preparation of financial statements, which provide a clear picture of the flow of money within an organization.
What is the difference between accounting and finance as per the video?
-Accounting focuses on the accuracy of financial statements such as balance sheets, while finance focuses on qualitative aspects and decision-making based on actual financial statement data.
What are the main areas of finance discussed in the video?
-The main areas of finance discussed are private finance and public finance. Private finance includes personal finance and business finance, while public finance deals with government income, expenditures, and taxation.
What is the focus of business finance according to the video?
-Business finance focuses on managing the financial resources of a business organization, including financial management, capital market, and financial investment.
What are the three subcategories of business finance mentioned in the video?
-The three subcategories of business finance mentioned are financial management, capital market, and financial investment.
What roles are typically found under the vice president for finance in a business organization?
-Under the vice president for finance, there are typically the accounting department, led by the chief accountant, and the finance and treasury department, which includes the finance officer.
How can the structure of a business organization affect its finance division?
-The structure of a business organization can vary, with some having a functional division with a vice president for finance overseeing accounting and treasury, while others may have a simpler structure with just an operating division and a finance division.
What is the significance of the different individuals involved in a business organization as it relates to finance?
-Different individuals in a business organization, such as the board of directors, CEO, and vice presidents, play crucial roles in decision-making and management of financial resources, which directly impacts the financial health and strategy of the organization.
Outlines
📚 Introduction to Business Finance
This paragraph introduces the first module of Business Finance, covering topics from the first week of the semester. It discusses the definition of finance, which is described as both a science and an art, focusing on the application of economic and accounting concepts to manage financial resources. The speaker emphasizes the dynamic nature of financial practices, which adapt to changes in the business environment, influenced by customer needs and marketing principles. The paragraph also touches on the relationship between finance, economics, and accounting, highlighting how finance is an integral part of economics, dealing with the efficient use of resources, and how accounting serves as the language of business, focusing on daily transactions and financial statement preparation.
🏦 Exploring Areas of Finance and Its Functions
The second paragraph delves into the areas of finance, distinguishing between private and public finance. The focus is on private finance, which includes personal finance and business finance. Business finance is further broken down into financial management, capital markets, and financial investment. Financial management involves capital budgeting and investment decisions, capital markets study financial institutions and their roles, and financial investment covers decisions related to stocks, bonds, and investor behavior. The paragraph also discusses the organizational structure of businesses, particularly the functional areas involved in finance, such as the vice president for finance, accounting department, and treasury department. It mentions that organizational structures can vary, with some having separate operating and finance divisions.
🏢 Organizational Structure and Finance
The third paragraph continues the discussion on the organizational structure of businesses, particularly focusing on the finance division. It mentions that in larger companies, there might be a vice president for finance who oversees various departments such as accounting and treasury. The paragraph also acknowledges that some organizations may have a simpler structure with just an operating division and a finance division. The finance division typically includes accounting and treasury functions. The paragraph concludes the discussion on understanding finance in module one and transitions to module two, which will cover financial institutions, instruments, and markets.
Mindmap
Keywords
💡Finance
💡Economic Concepts
💡Accounting
💡Financial Management
💡Capital Market
💡Financial Investment
💡Business Environment
💡Personal Finance
💡Public Finance
💡Organizational Structure
💡Financial Institutions
Highlights
Introduction to Module 1 and Module 2 of Business Finance.
Definition of finance as a science and art of applying economic and accounting concepts.
Finance's role in managing the allocation of financial resources and investment.
Adaptability of financial practices to changes in the business environment.
Finance's connection to economics and the efficient use of resources.
Accounting as the language of business and its relation to finance.
Distinction between accounting's focus on accuracy and finance's focus on decision-making.
Division of finance into private and public finance, with a focus on private finance.
Personal finance as a subcategory of private finance.
Business finance's focus on managing financial resources of a business organization.
Financial management's emphasis on capital budgeting and investment decisions.
Capital market's study of financial institutions and their functions.
Financial investment's focus on the value and price of stocks and bonds.
Finance's status as a functional area within a business organization.
Organizational structure variations in business, including finance and accounting departments.
Transition to Module 2, focusing on financial institutions, instruments, and markets.
Transcripts
okay hello my baby loves
so this video we're going to talk about
the module 1 and module 2 of
business finance which i
gave last week okay so
first week of this semester
okay so let's see first the module one
so this is the module one of business
finance
so this is the soft copy of
your module okay so the lesson
under module one are
okay so we have okay
so we have the definition of finance
areas of finance
and for lesson three different
individuals involved in
business organization okay so let's
start with the
definition of finance um
you already have your module with you at
home so i'm not
gonna read every details of this so i'm
just gonna explain
or i'm gonna give insights to
you so pretty you know since i know
like and i believe
even again i mean okay so definition of
finance
finance is both science and art of
correct application
of the economic and accounting concepts
principles that define the system
structure process
management allocation to the station of
financial resources investment and
expenditure
between young
the use of factual information this
factual information
so financial practices do not remain
static but become adaptive
to the changes in the business
environment uh
based on your organization and
management i believe
and also in the marketing principles of
marketing
which is you are also currently taking
this semester the business environment
is constantly changing
because we always adapt to
whatever our customer needs and whatever
they want
so with that
financial resources and practices
would you change the nation again
okay economic and accounting concept
okay let's start with economics
so finance used to be considered as an
integral
part of economics so economics is
concerned with
an efficient utilization of scarce
resources and also finance
finance we also use
that to uh utilize every sources that we
have
inside the organization so you you also
have your human capital
your financial capital so efficient
utilization
nina gaming nothing don't see finance
okay
and lastly so accounting
considered as the language of both
business and finance
so maybe
just maybe some of you
are hunting finance on subject
so so accounting
is a day-to-day transaction
on the preparation of financial
statements so flow of your money
so you see accounting see finance
focuses on management of your assets and
liabilities
financial resources no you know human
capital nino
so you nominate finance
and finance also plans for the future of
the company
so art
so constantly changing
environment
accounting prefer prepares a financial
statement
c finance analyzes financial statements
hi also see accounting then
um focuses on accuracy
correct you have your balance sheet
accuracy
however finance focuses on
qualitative focuses on this decision
making
based on your actual rate financial
statement
data negating accounting
okay so let's go now to the next lesson
so you have the areas of finance
so i have here a note although there is
no universally accepted standard
regarding to the division of finance
areas so
this one is just
a suggested division
of general perspective in this
field okay so you have here the finance
you have private finance and public
finance so
we are just going to focus on this part
so the private finance
so under private finance we have
personal finance and business finance so
our subject focuses on this one so at
futile
by business finance so financial
management capital market financial
investment
so my reference is uh
the last part of this module
okay
so first the broad top broad
field the private and public finance so
private finance
financial resources of private
individuals private organizations
ngos in accordance to the prescribed
financial policies
okay so this one the time under c
business finance
you also have the public finance uh
allocation of government income
generates from either taxation or
borrowings
so hindi times
uh deals with the government
expenditures and taxations
so public finance is also called as
fiscal administration
okay so under private finance you have
personal finance
subcategory of private finance this
which is directed towards the management
of personal resources of an individual
so in the first activity i believe you
already practiced this one even though
you are just student
and maybe especially
because
okay next one would be the business
finance so
i think subject
focuses on handling and managing the
financial resources of
a business organization so under this
one you have
this tree uh we are going to discuss
this in
the following modules cinnamon so as a
preview financial management
focuses on capital budgeting decision or
investment decision
capital market studies different
financial institutions
and their functions i i think
uh by module two or three
financial institutions and lastly would
be the financial investment
includes business decision about the
value and price of stocks bonds
and behavior of investors
and let's go now to the last lesson
in module one so you have the different
individuals involved
so first in business organization
finance has elevated its status as
one functional area so in a typical
arrangement of a business organization
four functional divisions are involved
so
pinup in big companies
okay so this a functional area and i
think you already discussed
this in your organization and management
so in functional area
every function
vice president okay so from the board of
directors
ceo or president then the
uh vice president so you have vice
president for operation for
administration
uh vice president for finance and for
marketing
so we are gonna talk in this
sport kbp for finance so under
vice president for finance praise
or division also so you have the
accounting department so you have the
chief accountant and
the finance and treasury department
or your finance officer
okay so other than functional division
other than this one
you also have uh
it is also possible that an organization
follows
a structure of just two major divisions
so under the president
so this one you have an operating
division in
the finance division okay so
under operating so you have your
production the human
resources the marketing and in finance
you have your accounting and treasury
okay so it could also be
finance in accounting so uh
in every organization they practice a
different
organizational structure which is
applicable
to them and that
ends the discussion
for understanding finance in module one
of your salt learning kit
so at this point i believe that you
already
did every activities after the
discussion
so if you don't understand something
so with that let's go now to the module
2
of business finance which is the
financial institutions
instruments and markets
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