FINANCIAL MANAGEMENT FOR PUBLIC AND PRIVATE ORGANIZATIONS

Finance is a study that examines the science of how a private or government organization can generate more value in managing collected funds at low cost and as efficiently as possible and used for organizational purposes to achieve company goals. Related to funds used for organizational purposes, what is meant is that funds are used for both short-term and long-term operational assets as well as investment decisions and banking transactions related to the organization.

Financial experts apply Adam Smith’s theory to the current state of companies, stating that the primary goal of corporate finance should be to maximize shareholder welfare, which means maximizing the value of its shares. This is related to the free enterprise system, but it is the best
economic system for society as a whole. Through the free enterprise framework, companies develop desired products and services that benefit society. However, several limitations are required, namely that companies must not cause air and water pollution, or engage in unhealthy labor practices. fair, or create a monopoly that exploits consumers (Brigham & Houston, 2020)