Advantages of Finance

To learn finance is necessary for everyone because there are large numbers of advantages which can get by specializing in this field. One side finance helps every business in the investment decisions and other side it helps to gain cheap money resources without compromising the control of business with others.


List of advantages can be shown in following points.


1. Better Understanding of Business Tools

For taking better business decisions, we need to understand business tools. All most all the business tools are learned in finance study. When you study the financial statement. When you study financial, ratio and cash flow analysis, you are just learning all business tools through financial academic course. In future, all these tools helps you better analysis of your business financial position and performance. On this basis, you can take new steps for growing your business.

Example : Suppose, A do not know ABC of finance and starts business. He will not use the tools of business because he does not know finance. Effect of this will be on his business. He will just invest but not invest in good direction because he is not analysis through tools. Other-side B who starts same business. He will grow because he studied finance and he is using its great tool for promotion of business.


2. Better Understanding of Financial Markets

When anybody starts to study finance, he will go inside of finance. In finance, everybody knows the basics of financial markets. Main are capital market, money market and foreign exchange market. But some of genius are so great who create new financial markets because they know how did all these past financial markets were created. On the basis of creator's imagination of future,  they can think and they can create new markets. We can take the examples of e-commerce websites. We can take big directories. So, on all the websites main aim to give platform for doing business. So, you will also create new financial market in future and you will give its rewards.

Example : Mr. A invested his whole money in real state market for making commercial shops. But there was not traffic of public due to this, he failed in his business. Other Mr. B knows finance. He invested his money in different financial market. One side loss, he covered from other financial market. So, great example of Mr. B. So, you should also learn finance.


3. Better Understanding of Public Finance

A good learner of finance will understand how public finance works and how does he can gain from this public finance. Its simple meaning, how can he saved income tax, VAT and other taxation with the knowledge of finance.


4. Better Understanding of Leverage


One of great advantage of finance, with this you can learn and understand the leverage. There are three leverage. One is operating leverage, second is financial leverage and third is combined leverage. You know debt and equity is the main source of fund of any business. If it is in balanced form, it will help to grow the business. If it is not in balanced form, it will increase loss of business. Due to this, business will go to the stage of insolvency. So, by using operating leverage, financial leverage and combined leverage, we take debt and equity in balanced form.

Example : If you eat in balance form, you will feel healthy. If company has its financial structure in balanced form, it will grow. Otherwise, when we eat bad food, we feel unhealthy. Company will face also losses, if financial structure of debt and equity is not in balanced form.


5. Better Understanding of Personal Finance

If you are not doing business, you are not operating company as finance manager. You are still house wife. You are still retired person or student. You should also learn finance like other because with this, you can better understand the personal finance. With this, you can get student loan at competitive rate of interest. You can learn better use of credit card debt. You can make the personal budget. You can choose better life insurance plan.


Example : Mr. A does not know finance. So, he bought a bad insurance policy in which there is not chance of getting money back in 3 years. Mr. A can pay the premium for 10 years or forget his already paid premium. Mr. B is the learner of finance. He reads term and conditions of insurance policy first and then take the decision. He bought good plan where he can get surrender value within the year if he is unable to pay more premium.

Related : Importance of Finance 

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