Introduction To Private Financing - PowerPoint PPT Presentation

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Introduction To Private Financing

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Private financing and public finance correspond to one of the most common ways of classifying this matter. – PowerPoint PPT presentation

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Title: Introduction To Private Financing


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Introduction To Private Financing
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  • What is private financing?To understand the
    definition of private financing it is pertinent
    to start by mentioning what finance in general
    is. In this sense, this subject is responsible
    for the correct administration of the private
    investment of an organization. Now, there are
    different types of deepening or finance depending
    on the area in which they are required. Given
    this, there are various specializations of
    finance such as personal, public, private,
    corporate, among others. However, although they
    all require different knowledge for their
    applications at the same time they are also
    complementary.The concept of private investment
    indicates that it is a discipline focused on the
    management of money and capital of people and/or
    private companies.

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  • According to other authors, private investment
    can also be explained as the knowledge required
    to manage privately owned financial resources,
    that is, to manage the money and capital of
    companies and/or people that do not belong to the
    state. Additionally, the importance of private
    finance lies in the need to know how to
    effectively and efficiently manage the investment
    and/or financing needs of the members who belong
    to the private sector.To close with this
    introduction to private finance, it is necessary
    to point out in the same way, certain
    particularities on this matter. That is why,
    below, a list with the 4 main characteristics of
    private finance will be exposed

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  •     The objective of private finance is profit,
    that is, to increase the wealth and economic
    value of investors or private companies.  
     Private finances are used to manage the
    financial resources of companies and private
    persons of a government.    They are based on
    maximizing income and profits as well as
    minimizing costs and expenses.    They do not
    seek comfort but rather the efficiency of
    financial resources to obtain the highest
    profitability.Differences between public
    finance and private financePrivate financing
    and public finance correspond to one of the most
    common ways of classifying this matter. Although
    all branches of finance are complementary, it
    could be classified that public finance and
    private finance have great differences between
    them that even make them seem like antonyms. It
    is for this reason, that below, we present a list
    of the main differences between public and
    private finance

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  • The objective of public finance is the welfare of
    a state, while private finance has the purpose of
    seeking profit for organizations and private
    persons.Public finance has a macroeconomic
    impact, that is, it handles finance from a
    perspective that includes several factors such as
    all the people, goods, or companies in a country.
    Private finance has a micro economic impact, that
    is, it handles finance focused on an individual
    organization.In private finance, the
    maximization of profits is sought through the
    optimization of investments, expenses, and costs.
    Public finance cannot always minimize its
    expenses or costs because its intention is social
    welfare.

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  • Private finance is based on the application of
    any necessary measure to maximize the
    profitability of a company or private person.
    Instead, public finance is based on the
    application of laws and regulations based on the
    public policies of a government.
  • For private finance, it is easier to carry and
    present the results through the financial
    statements. In public finance it is much more
    complicated to issue financial reports due to its
    large volume.In summary, the applications and
    purposes of public and private financing are very
    different. The first of them, what they are
    looking for is the management of public financial
    resources to achieve social welfare. Instead, the
    second is dedicated to maximizing the wealth and
    profitability of organizations and private
    individuals.

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