Any business, large or small, is a system of financial relationships and cash flows which are activated by management decisions and in that way it is important to know the fundamentals of this discipline.

All firms confront fundamental decisions about how to deploy capital, that is, what to invest in, and how to raise funds needed for investment. These choices are central to the discipline of financial management. The study of corporate finance covers the principles, analytical tools, and institutional knowledge a manager needs to make good investment and financing decisions. A firm needs a financial infrastructure: systems for monitoring cash and cash flow, for creating operating and financial budgets, for measuring and reporting its financial and operating performance, for managing its current and expected tax liabilities, and so forth. The field of finance covers all these topics, and many others such as, the markets in which financial contracts are priced and traded, and the institutions that use, support, and regulate them.