Max Business

Finance is the lifeblood of business. No business enterprise can be started and operated without adequate funds. In modern business, finance is required for the purpose. To start a business, machinery, land and buildings, and other fixed assets must be purchased. Money required for the purchase of fixed assets is called fixed capital. Money is required for purchase of raw materials, payment of wages and salaries and other expenses. It takes time to produce and sell goods. During this period working capital is needed. Finance is required for replacement of worn out plant and machinery. Without adequate funds, a business firm can’t modernize plant or machinery or use new methods of production and distribution. Funds are needed for expansion and growth of business. Thus, finance is needed at very stage in the life of a business. This importance of finance has increased with the growth of business. In modern business, large amount of funds is needed foe large scale production and distribution.