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Economic Value Added is an important measurement tool which used by organizations to determine whether existing or proposed investment contribute positively to the owner's wealth. Economic value added is calculated by by subtracting the cost of funds used to finance an investment from its after-tax operating profits. Positive EVA adds value to the owner's wealth whereas, Negative Value decrease owner's wealth. So, EVA having positive Value is considerable or acceptable . For example, the EVA of an investment with after-tax operating profits of $410,000 and associated financing costs of $375,000 would be $35,000 (i.e., $410,000 $375,000). Because this EVA is positive, the investment is expected to increase owner wealth and is therefore acceptable

There are following three types of Businesses. 1. Sole Proprietorship 2. Partnerships 3. Corporations Types of Businesses 1-      Sole  Proprietorship A sole proprietorship is a business owned by one person who operates it for his or her own profit. About 75 percent of all business firms are sole proprietorship. The typical sole proprietorship is a small business, such as a bike shop, personal-trainer, or plumber. The majority of sole proprietorship are found in the wholesale,retail, service, and construction industries. Typically, the proprietor, along with a few employees, operates the proprietorship.He or she normally raises capital from personal resources or by borrowing and is responsible for all business decisions. The sole proprietor has  unlimited-liability ; his or her total wealth, not merely the amount originally invested, can betaken to satisfy creditors. کاروبار کی جو پہلی قسم ہے اس کو ہم واحد ملکیتی کاروبار کا نام دیتے ہی...

Major Areas of Business Finance Major Areas of Business Finance is divided into two parts Financial Services  Managerial Finance Financial services  is concerned with the design, delivery of advice and financial services to individuals, business, and government. It includes a variety of interesting career opportunities within the areas of banking and related institutions, personal financial planning, investments, real estate, and insurance. Managerial Finance Managerial finance is concerned financial manager's duties in the business firm. Financial managers actively manage the financial activities  of businesses both financial and non-financial activities, private and public, large and small, profit-seeking and not-for-profit seeking. They active participate in financial planning, credits to customers and organizations, evaluate and also identifying fund raising opportunities for the organizations.

The Role of Business Finance  The importance of business finance is increasing day by day as businesses are expanding across the boundaries. Companies are trying to attract new business opportunities. Business Fiance guides the investors, organizations and companies how they can achieve maximum by investing their money in different sectors, BF guides them how they can save their investment and how they can compete in the emerging markets.  Businesses typically invest in real assets such as land, buildings, plant and inventories (or stock), though they may also invest in financial assets, including making loans to, and buying shares in, other businesses. People are employed to manage the investments, that is, to do all those things necessary to create and sell the goods and services in the provision of which the business is engaged. Surpluses remaining after meeting the costs of operating the business - wages, raw material costs, and so forth – accrue to the investors. Of c...