Finances have always been present in the lives of human beings even when this concept was not known.
The first human beings who inhabited the planet carried out various survival activities such as hunting or agriculture, as we all know that not all of them carried out all these activities, that is why they were forced to create a method that would make it easier for them to obtain different items, Hence the barter that was his way of negotiating was born. With the passage of time, the barter system was improved until we reached the point where the currency was born and then issues such as the administration of resources were improved.
With this new method finance is born, as a scientific discipline that is in charge of allocating resources in certain periods of time.
Currently we know that finances are part of our day to day both in our businesses or companies in which we develop and in our personal lives.
The finances in the companies are in charge of managing the resources that they have and investing them in the best way to be able to obtain capital based on returns with everything and the risk that this entails.
On a personal level, finances are present in the way we manage our own resources, to mention an example, when an employee receives the payment of his fortnight, he has to find the best way to make his money work so that he can make the pending payments. and have a part that you can save.
But what is finance?…
“Finance corresponds to a branch of the economy that studies the movement of money between people, companies or the State. It also studies obtaining and managing the money they carry out to achieve their respective objectives, taking into account all the risks that this implies. ” - Asobancaria
Finance helps us in decision-making, but what sets them apart is that these decisions are based on the cost and benefits expected to be received. By carrying out this type of decision, people collaborate with the Financial System.
Financial system is a set of financial institutions and markets in which the exchange of assets and risk is carried out, in addition to financial transactions. Includes markets for bonds, stocks and financial instruments; intermediaries such as banks, insurance companies; financial services companies and regulatory entities.
The study of finance is mainly divided into two branches, corporate finance and asset valuation.
What is Corporate Finance?
“Corporate finance is an area of finance that focuses on the monetary decisions that companies make and the tools and analysis used to make those decisions. The main objective of corporate finance is to maximize shareholder value ”- Wikipedia
We can relate corporate finances to the accounting activities of the company since they focus their decisions on the monetary activities of the company as mentioned above. Said decisions can be divided into two, which are long-term, such as paying dividends to shareholders, knowing whether to finance an investment with own funds or acquire debt, among others; on the other hand there are those that are short-term are more for cash management and short-term financing.
Corporate bonds are usually associated with invention banking due to the type of activities it carries out.
What is Investment Banking?
It is also known as Business Banking, it is in charge of helping private companies, governments and individuals to obtain capital through a contract for the issuance and sale of securities in the capital markets. In addition, it also offers consulting services for companies that are interested in mergers and acquisitions; Financial services to clients who want to carry out operations with financial derivatives, fixed income, stocks and currencies.
Investment banking has two main activities which are:
1) The operation, exchange and commercialization of securities for cash or other securities and / or the promotion of securities.
2) Pension fund or mutual fund services.
Ethics and Corporate Social Responsibility
Ethics and social responsibility are concepts that deal with the behavior and the way of acting of people, now companies introduce these concepts within their mission and vision.
We might think that we all know about ethics, since we know how to distinguish between what is good and what is bad on a personal level, but ethics in an organization is somewhat different since you have to build a shared ethic respecting the personal ethics of each member. The business ethics is reflected in the values, norms and principles that the company has in order to have a better work and social harmony.
Each of the companies has their own codes of ethics that they create in order to combat corruption, illicit activities, deceit, among other things, and prevent them from transcending beyond the company.
For its part, corporate social responsibility is the active and voluntary contribution to human, social, environmental and economic development, through the trust of companies towards society in general.
Companies today see social responsibility as a new business model because it helps them generate benefits. For example, with workers, when they are given the right treatment and conditions to work, bonds are created that make them feel that they are an important part of the company and are not only there as one more.
In addition, social responsibility helps improve the public image of the company, since it makes it look like an innovative company that not only seeks an economic good for it but also seeks a common good for society.
Bibliography
Anonymous. (2018). Corporate Finance. 2018, from Wikipedia Website:
Anonymous. (2015). What are finances ?. 2018, from Asobancaria Website:
Fernando Heredia. (2013). Ethics and corporate social responsibility. 2018, from SME businessman Website:
Nines López Fraguas. (2015). What is ethics for in organizations? 2018, from RRHH Digital Website:
Yesenia Alta Gracia Martínez. (2014). Corporate Social Responsibility (CSR). 2018, from Escuela de Organización Industrial Website:
