Finance is the life blood of industry. Elucidate this statement with suitable example.

Question:

Finance is the life blood of industry. Elucidate this statement with suitable example.

Finance:

Finance is a concept that describes investments, money systems, management of money, and all the processes involved in acquiring money. It includes the overseeing and creation of cash, credit, banking, liabilities, assets, and investment of funds. Finance is divided into corporate, public, and personal finances.

Answer and Explanation:

Finance is considered as the lifeblood of an industry because all the activities in the company require finance to attain their goals irrespective of the size of the business. Finance is needed right from starting a business when coming up with a business idea. It is required for the establishment of the company and purchasing of assets required for the business and during the investigation of the market trends. Finance is useful during product development, payment of employees, and sustainability of the whole industry. The overall success of the company depends mainly on it since it supplies the finances needed to carry out the activities in all the departments of a company to ensure profit maximization. For a product like peanut butter to successfully reach the end consumer, finance is required for the purchasing of raw materials, conversion of the materials to finished products, payment of the employees, and transportation of the finished goods to the market. It generally runs all the operations of a company.


Learn more about this topic:

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What Is Financing? - Definition & Types

from Corporate Finance: Help & Review

Chapter 8 / Lesson 7
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