Legal Definitions - finance

Finance (noun)

This term refers to the broad field or activity involving the management of money, credit, banking, investments, and other financial assets and liabilities. It encompasses how individuals, businesses, and governments acquire, allocate, and utilize funds over time, often considering risk and return.

• Example 1 (Business Context): A large manufacturing company's finance department is responsible for preparing quarterly budgets, managing the company's investment portfolio, and ensuring there's enough cash flow to pay suppliers and employees.

  Explanation: Here, finance describes the specific business function dedicated to the strategic oversight and management of the company's monetary resources and financial obligations.

• Example 2 (Academic/Personal Context): David decided to study finance in college because he was interested in understanding how global stock markets work and how individuals can effectively plan for retirement through smart investments.

  Explanation: In this case, finance refers to the academic discipline or the study of money management, investment principles, and financial systems, which David is pursuing as an area of knowledge.

To finance (verb)

This means to provide or obtain the necessary funds or capital for a particular purpose, project, or purchase.

• Example 3 (Project Context): The city council voted to finance the construction of a new public library by issuing municipal bonds, which would raise the required capital from investors.

  Explanation: Here, to finance means the act of securing or providing the money needed for the library project, in this case, by selling bonds to investors.