CORPORATE FINANCE Introduction, elements and Primary Aspects

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Contents
Introduction Types of Corporate Financing Primary
Aspects of Corporate Finance Essential Elements
of Corporate Finance
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Introduction

• Corporate Finance is a part of finance that deals
  with the capital formation of corporations and
  how they look at the sources of funding and
  decisions of investment.

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Types of Corporate Financing
Owner's Fund The amount invested by the owner of
any company is owner's fund and ownership
finances are bounded to raise capital for
owners. Debt Funds It is a kind of external
finance more like mutual funds. It is invested
in securities to create fixed incomes in form of
multiple options such as loans, debentures, etc.
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Primary Aspects of Corporate Finance
Planning Finances Corporate Finances involves the
proper planning of the funds that are required
to meet the complete requirements of the
corporations. Raising Funds Once you are done
with planning the finances, the next part is to
raise the funds according to the planning you
have made just like implementing.
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Investing
Investing is the most important aspect which
helps the corporations to upgrade their success
rate and more towards earning more. Investments
are made for future or current
benefits. Monitoring Monitoring is the crucial
part of corporate financing as a proper track
needs to be kept for all the investments,
funding and decisions that has been made within
the corporation.
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Essential Elements of Corporate Finance
Operating Flows Operating Flows can be defined as
the actual amount that has been generated by the
operations of the business within an
organization. Invested Capital As the name
suggests, invested capital refers to the amount
that has been invested for a long-term with an
expectation of return as profits.
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Cost of Capital
Cost of capital is the minimum amount or rate of
return that a company or an organization needs
to earn to justify the invested capital through
debit and equity. Return on Invested
Capital Return on Invested Capital is the amount
earned by a company using the capital invested
by debt and equity. It is the actual amount
earned by the company in a specific time period.
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