Corporate finance is a broad term that is used to collectively identify the various financial dealings undertaken by a corporation. Generally, the term also applies to the various methods, procedures, and configurations of the financial operations employed by a given company. In most instances, corporations will have a specific financial division that is charged with the task of managing corporate finance in all aspects of financial operation.
One of the core functions of responsible corporate finance is to make wise use of the financial resources available to the company. As part of this action, the financial arm of the corporation will attempt to develop an operating budget that addresses all the needs of the company in terms of expenses, as well as work with other departments to track income generated from various operations and investments currently in place. Ultimately, the goal is to ensure that the corporation is achieving the maximum benefit from available financial resources, while incurring the minimum amount of expenditure required to attain those benefits.
Corporate finance may take on many different aspects as part of the overall management of the finances of the company. The functions may include the management of investments such as acquiring and selling stocks, bonds, and other investment ventures related to other companies. This area of finance can also involve creating and managing the process for issuing shares of stock or offering corporate bonds to generate resources for expansion projects. When acquisitions of property or other companies, mergers, corporate restructures, or the selling of company assets is involved, the actions are considered to be part of the corporate finance function.
Under the best of circumstances, responsible corporate finance activities promote the wise use of all financial resources, actively looks for ways to enhance the financial picture of the corporation, and in general makes sure there are assets on hand to maintain company operations. Chief financial officers and their immediate staff often have the authority to approve or deny various uses of corporate finance, although some issues may be deferred to a board of directors, or be subject to a vote by the shareholders of the company.
