Corporate finance is the management of a company’s financial activities, including raising capital, making investment decisions, and managing daily financial operations to maximize shareholder value. It involves balancing profitability and risk to achieve long-term goals through strategic planning and the allocation of financial resources.
Key components of corporate finance include:
- Capital budgeting: Deciding which long-term investments and projects to fund, using financial analysis to estimate cash flows and compare alternatives.
- Capital structure: Determining the best mix of debt and equity to finance the company’s operations and growth.
- Working capital management: Managing the company’s short-term assets and liabilities, including cash, inventory, and short-term borrowing, to ensure smooth day-to-day operations.
- Financial planning and analysis: Forecasting future financial needs, creating budgets, and analyzing performance against those budgets.
- Dividends and payouts: Deciding whether to distribute profits to shareholders or reinvest them back into the company.












