What is corporate finance?

[Verena]

I keep seeing the term what is corporate finance in business and investment discussions, but I’m still not fully clear on what it actually covers. From what I understand, corporate finance deals with how a company manages its money — including decisions about raising funds, budgeting, investing in projects, and managing risks. But I’m curious how this works in real situations. For example:

• How does a company decide whether to borrow money or issue shares?
• Who makes these financial decisions?
• Does corporate finance also include things like mergers and acquisitions, or is that separate?

 

[liam]

Corporate finance involves how a business manages and expands its money, how to finance the business (with debt or shares), where to invest and how to make significant changes such as budgeting, risk management and mergers or acquisitions and is generally headed by finance managers and executives.

 

[Thaddeus]

Corporate finance is the area of finance that focuses on how companies manage their money, investments, and financial decisions. It involves raising capital, budgeting, managing cash flow, and planning long-term financial strategies to increase a company’s value. Key activities include deciding how to fund operations, whether through debt or equity, evaluating investment opportunities, managing risks, and ensuring profitability and sustainable growth. The main goal of corporate finance is to maximize shareholder value while maintaining financial stability.

 

[Elisa]

Corporate finance is the area of finance that focuses on how companies manage their money—specifically how they raise capital, invest in projects, control risks, and maximize value for shareholders. It covers decisions about budgeting, funding, profitability, and long-term financial strategy.