Finance is the life blood of business. It is of vital significance for modern business which requires huge capital.
Industrial
Finance
Finance is the life blood of
business. It is of vital significance for modern business which requires huge
capital. Funds required for a business may be classified as long term and short
term. It is required for purchasing fixed assets like land, building, machinery
etc., the capital required to purchase fixed assets is called as fixed capital.
Purpose Of Industrial Finance:
To
finance fixed assets
To finance
the permanent part of working capital
To
finance the growth and expansion of business.
The nature of business determines
the amount of fixed capital. Nature of goods produced determines the level of
financial requirement. If a business is engaged in manufacturing small and
simple articles then it requires small amount of capital. The financial need
depends upon the technology adopted in the organization. The major sources of
finance are: shares, debentures, public deposits, retained earnings, term loans
from bank, loans from financial institution etc.,.
The financial sources are
expanded and a major source of finance comes from foreign direct investment
(FDI) due to our economic reforms.
Tags : Managerial Economics - Industrial Finance And Foreign Direct Investments
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