Why business owners should know about finance?

Expert Solution

Finance is a very important aspect of every business. Firstly finance is required at Inception itself in the form of capital. This may be in the form of equity or borrowed funds which the owner of the business needs to decide. Thereafter finance is required in the form of working capital for the day-to-day functioning of the business. Again management of working capital is an essential aspect of business and profitability depends upon efficient management. When the business has new opportunities to invest in projects it needs to consider the finances available. This also in corporates decision making as regards the correct projects to be undertaken in the form of capital budgeting. The sources of raising additional Finance has to be decided by the management depending upon the cost of finance.

Hence we see that finance is an important aspect in every decision of the business and determines its profitability.

jeff jeffy answered 6 months ago

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