Finance includes the financial markets, including stock exchanges and their market participants , namely financial services institutions , credit institutions and investment services companies ( banking ), insurance companies ( insurance companies ), mutual funds , pension funds and other institutional investors . The financial markets are made up of money , foreign exchange , interbank and capital markets . The financial analysis by financial analysts analyzes the market development on the financial markets and the market participants through a market analysis .
The raising of capital is usually referred to as financing , the use of capital as investment and the processing of payments as capital management. Financing and investment are essential functions within finance that cannot be carried out without payment transactions.
Scope of terms
Other companies in the tertiary sector , for which the purpose of the business consists entirely or predominantly of finance , also belong to finance in the broader sense ( e.g. financial conglomerates ). Local authorities organized under public law , municipal companies and public companies are grouped under the collective term “public or state finance” ( state finances ). Here finance as part of the state's financial authority means, under administrative law, the financial legislation in the field of taxes , duties and charges , the distribution of tax revenue including horizontal and vertical financial equalization , financial management and regulations on the preparation and implementation of the budget . The Ministry of Finance , which is headed by the respective government , is operationally responsible . At the municipal level, the respective finance department is responsible for finance. The organizational units dealing here with Finance, hot financial management , combing or Treasury , the Head of the Treasurer or Treasurer .
Financial constitutional law
Finance is also a legal term . The Basic Law for the Federal Republic of Germany (GG) contains in Section 10 ( To GG) - entitled "The Finance" - the financial constitutional law . These standards are the basis for the individual federal tax laws and for budget law , in particular the Federal Budget Code and the Budget Principles Act as well as financial equalization .
Private sector finance
In business administration , the operational function of financing includes all processes that relate to the monetary supply and control between capital procurement and capital use. The areas of finance for a company in the non-banking sector include accounting , controlling , treasury , finance , financial planning and securing liquidity . In detail, accounts receivable and accounts payable also belong to corporate finance. In the case of non-banks, finance is a “by-product” of the main business purpose, the production of goods and services . In the case of private households , private financial planning and private liquidity calculations are part of finance.
The Finance distinguishes itself from the financial sector by the effect that the latter in the economics of the entire aggregate economic sector concerned, which all companies includes, where finance or financing the core business represent.
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