Corporate finance management is mainly concerned with management of the financial affairs of any business enterprise. They are technically a set of tools and techniques that are concerned with making various financial decisions of a firm. They are helpful in achieving the bottom line of the company efficiently and increase the value of the various business enterprises. They are pretty much useful in detecting the various financial risks that might be involved in business that the corporate might have to face in the near future. Corporate finance could be described as a study of decision making in financial terms. The scope of financial management is not restricted towards a particular kind of financial problem rather it is quite vast that it covers all kinds of financial problems of all types of business.
The entire study of corporate finance can be divided into two major types namely the long term financial techniques and tools, and the short time financial techniques and the tools. Decisions that are concerned with the investment in terms of the capital and the portfolio are categorized under long term. Investments that are concerned with the financing the company’s requirement through shares or debentures and decisions that are specifically concerned with the dividends are always associated with the long term financial technique and tool. When the decisions are concerned with working capital then it is termed as the short term decision. This working capital could be defined as the net worth of the combination of both the current assets as well as the current liability. When it comes to short term major importance is given to cash management rather than the others. They are also concerned with the decisions that are related towards stocks and the short term credits and debts.
Corporate finance is most of time unified with investment banking as the major services of the investment bank is to help the company create a security and then also facilitate the people to buy the securities. Therefore it acts as a middle man. Investments bank are meant mainly for the purpose of analyzing the various financial needs of a corporate and giving it a good portfolio so that the risks are less thereby facilitating it to raise the good structure of the capital. The resources are always limited and therefore the corporate financial management deals with allocating the limited resources with the opportunities that are too competitive.