Q:

Why is finance important to a business?

A:

Finance helps businesses achieve their goals by providing the funding they need to achieve them. Without funding, businesses cannot be successful.

Money helps businesses hire staff, produce product and rent facilities for office space. Most companies will seek financial support for an investor or equity partner. Without a financial backing, a business cannot exist.

It's important that leadership within an organization has a good understanding of finance. This will ensure that the business can effectively manage the money that they have to ensure that they hit budgetary targets and goals. In doing so, they have a better chance of succeeding at their mission and goals as an organization.

Sources:

  1. investopedia.com

Is this answer helpful?

Similar Questions

  • Q:

    What is capital in accounting terms?

    A:

    Capital in accounting, according to Accountingverse, is the worth of the business after the total liabilities owed by a company is subtracted from that company's total assets. Capital may also be labeled as the equity in a company or as its net assets.

    Full Answer >
    Filed Under:
  • Q:

    What are non-operating items on an income statement?

    A:

    Non-operating income items on an income statement include revenue and expense items that weren't generated as part of a company's regular course of doing business. The expenses added in this final section of the income statement can negate an operating income, while the revenue in this section may turn an operating loss into a net profit.

    Full Answer >
    Filed Under:
  • Q:

    What is the periodicity assumption?

    A:

    The periodicity assumption is an accounting guideline that allows an accountant to divide up the complex, ongoing activities of a business into set periods of time. The periodicity assumption is also known as the time period assumption.

    Full Answer >
    Filed Under:
  • Q:

    Why is accounting often referred to as the "language of business"?

    A:

    Accounting is known as the "language of business" because it communicates the financial state of a business clearly and concisely to those who understand accounting standards, according to New Charter University. With an understanding of accounting, stakeholders in a business can see anything from the overall financial status of the company to the smallest transactional details.

    Full Answer >
    Filed Under:

Explore