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FM Assignment2

Finance can be both an art and a science according to Khan and Jain. As an art, finance requires analytical skills to understand situations and make good financial decisions. As a science, finance provides theoretical and mathematical knowledge. Managing personal finances for needs like paying bills requires both analyzing budgets (art) and doing computations (science). Starting a business also requires both skills like SWOT analysis (art) and inventory and capital funding methods (science).

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Eloisa Monato
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268 views

FM Assignment2

Finance can be both an art and a science according to Khan and Jain. As an art, finance requires analytical skills to understand situations and make good financial decisions. As a science, finance provides theoretical and mathematical knowledge. Managing personal finances for needs like paying bills requires both analyzing budgets (art) and doing computations (science). Starting a business also requires both skills like SWOT analysis (art) and inventory and capital funding methods (science).

Uploaded by

Eloisa Monato
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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MONATO, Eloisa Karen October 14, 2020

19-02078-2020 Financial Management

BSBA Financial Management 2 Mr. Jairus Kent B.


Sanchez

Assignment #2

According to Khan and Jain, “Finance is the art and science of managing money.”

How can finance be an art and science? Provide examples or situations.

According to Khan and Jain, “Finance is the art and science of managing money.
Meaning to say to say finance is both art and science finances and art as it requires major
analytical skills to fully understand and make a good decision in managing money. On the
other hand finances science because it provides knowledge related incentive areas such as
statistics and mathematics. Finance as a science, involves theoretical frameworks, scientific
method, and etc.

In today’s life finance plays a major role in our life. Finance as a personal money,
and capital funds has own role. Personal money as your money in everyday life. The money
you use for buying needs and wants or desire . Capital funds are finance use in starting a
business. For example, I just received my salary and I want to buy a new cellphone, but I
need to pay electric bill and buy a groceries. In this situation, finance as an art and science
will apply. As an art, I will analyze and think how I budget my salary, and as a science, I will
do a budget computation so that I will know how I budget my money practically. On the
other hand, for example in capital funds, I as a person who want start a business, I should
need to know and consider the strength, weaknesses, opportunity and threats (SWOT
Analysis) of the business I choose to build. And the next thing, it is necessary to make
inventory for the product I will choose so that I will know how I spend my capital funds. In
given examples, analysis and understanding skills is the art, while computations and
methods are the science.

Finance as an art and science of managing money is important to know as a


knowledge of being a financial manager or analyst.

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