Definition: Personal Finance refers to the application of finance principles regarding financial discretions of family unit or individual. It determines the ways of achieving budget, saving money and expenditure of financial resources by considering future life events and financial risks. Explanation: Personal finance’s key component is a dynamic process termed as ‘financial planning’ which needs re-evaluation and monitoring on regular basis. It consists of five steps: ‘assessment, setting goals, creating plan, execution, monitoring & reassessment’.
Examples: Consumer loans, credit cards, savings accounts, retirement plans, income tax management, etc. Corporate Finance and Investment Definition: Corporate Finance is a finance related area which deals with the monetary discretions made by business ventures as well as deals with the usage of analysis and tools required for making these discretions. Its basic objective is to increase corporate value with managing the company’s monetary risks.
The corporate finance also contracts in obtaining the utmost outcomes on the invested capital of the firm. The corporate finance management endeavors to increase the company’s value through investment in profit yielding projects. Explanation: Corporate Finance basically differs from managerial finance that analyze the firm’s financial discretions instead of studies related to corporations alone. The corporate finance is appropriate for various companies
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The corporate finance too relates with investment banking. The investment bank’s typical role is to increase the standard kind of capital through the evaluation of firm’s financial needs. Examples: Capital Investment discretions are basically long-term options through which investments are projected with consideration of financing the investment with debt or equity; whereas, Working Capital Management are grouped as short-term decisions which deals with the balanced short-term current-liabilities and current-assets.