Finance and Other Business Disciplines - Business Finance - ثاني ثانوي

Pl . Light www.en.edu.sa FIGURE 1.5 Academic Disciplines wolfur Business 1.3 Finance and Other Business Disciplines The study of finance incorporates concepts from both accounting and economics. Accounting principles and financial statements are a key source of information in business finance, and the analysis of financial statements is an integral component in the value approach to the selection of securities. With the development of theories of portfolio behavior and asset valuation, economics plays an important role in finance. Theories based on economic principles encompassing corporate financial structure, the importance (or unimportance) of dividends, and option valuation are integral to finance. Empirical tools augment financial analysis, as statistics are a means to verify economic theory as it applies to finance. The ability to test economic and financial hypotheses further enriches the field of finance. Finance courses are generally offered as part of a program in business, as illustrated in Figure 1.5. Other academic disciplines within business may include information systems, human resource management, and marketing. Finance, however, differs from these areas in one exceedingly important way. It can be studied from two perspectives: that of the users or that of the suppliers of funds. Mi MUNDU RESOURCES 自費 10 INFORMATION SYSTEMS 36 lyBusiness Finance NUORITING BUTTNESS FALAMITE ACCOUNTING Finance incorporates economics and accounting principles, and works alongside other business disciplines including marketing and human resources.

In human resource management or marketing, for example, the emphasis is on how each division fits into a business's operations. However, finance can be studied from the perspective of both a business level and an individual investor, as the following examples highlight: ■ The tools of analysis used in corporate finance and investments are the same. A firm's financial statements are employed by both management and investors to analyze the firm's financial condition. ⚫ Methods used to value and evaluate an investment in plant and equipment are conceptually the same as those used to value stocks and bonds. • The calculations of returns on investments in stocks and bonds are the same as the calculations used to determine the returns on investments in plant, equipment, and other assets. ⚫ The tax and legal environments and the financial institutions in which securities are initially sold and subsequently traded apply both to businesses and to individuals. Although finance can have more than one perspective, many traditional introductory international finance courses emphasize financial management with a corporate emphasis. This approach makes the course more consistent with other classes taught in a business program. وزارة التصليد " CHAPTER 1 An Introduction to Basic Finance 37