Commercial finance is the collective term for various strategies used in the process of conducting international trade transactions. The process can rely on various methods of money management, use of banking services, rapid investments etc. In general its purpose is to use all the available resources in a way that it will provide the highest degree of satisfaction to the buyers and the sellers.
It is one of the oldest means of trade known to man; the earliest instance of trade dates back to the 3rd millennium BC, when the Sumerians traded with the people of the Harappa Civilization. This practice has been carried on over the ages till modern times, when Globalization changed the way trade takes place between cultures or nations.
Objective of Commercial Finance
Its fundamental objective is to make use of various tools and strategies of commerce to improvise trade relations between nations and in turn help in the creation of a strong, dynamic and all-powerful 'Global Economy'. This process is aimed at creating employment or job opportunities for people around the world and also to achieve the maximum utilization of resources so that there is no scarcity of essential resources in any part of this planet.
Free trade is also essential to increase people to people contact between various nations so that all nations can co-exist peacefully and mutually benefit from the buying and selling of goods and products.
Key Concepts of Commercial Finance
Risk and profit:Investors operating in different markets try to get the most for their money while attempting to minimize the risk of their investments. The capital market offers an opportunity for investors to make maximum amount of money possible by taking the highest amount of risk. Thus risk is directly proportional to profit and so finance market is very volatile.
The value of money over time:Since the rates of all commodities are increasing with every passing day, the value of money is decreasing. Thus, in trade finance, the values of goods need to be adjusted from time to time in order to protect the buyers and sellers against inflation of prices.
Supply and Demand:The concept of commercial finance largely depends on supply and demand of products. If the demand for a product is high and the supply is less, then its price will increase and if its demand is less and the supply is high then its price will decrease.
By Rajot Chakraborty
It is one of the oldest means of trade known to man; the earliest instance of trade dates back to the 3rd millennium BC, when the Sumerians traded with the people of the Harappa Civilization. This practice has been carried on over the ages till modern times, when Globalization changed the way trade takes place between cultures or nations.
Objective of Commercial Finance
Its fundamental objective is to make use of various tools and strategies of commerce to improvise trade relations between nations and in turn help in the creation of a strong, dynamic and all-powerful 'Global Economy'. This process is aimed at creating employment or job opportunities for people around the world and also to achieve the maximum utilization of resources so that there is no scarcity of essential resources in any part of this planet.
Free trade is also essential to increase people to people contact between various nations so that all nations can co-exist peacefully and mutually benefit from the buying and selling of goods and products.
Key Concepts of Commercial Finance
Risk and profit:Investors operating in different markets try to get the most for their money while attempting to minimize the risk of their investments. The capital market offers an opportunity for investors to make maximum amount of money possible by taking the highest amount of risk. Thus risk is directly proportional to profit and so finance market is very volatile.
The value of money over time:Since the rates of all commodities are increasing with every passing day, the value of money is decreasing. Thus, in trade finance, the values of goods need to be adjusted from time to time in order to protect the buyers and sellers against inflation of prices.
Supply and Demand:The concept of commercial finance largely depends on supply and demand of products. If the demand for a product is high and the supply is less, then its price will increase and if its demand is less and the supply is high then its price will decrease.
By Rajot Chakraborty
0 komentar:
Post a Comment