PART B

ABOUT THE SUBJECT:

INTRODUCTION TO FINANCE

Finance is a system that involves the exchange of funds between the borrowers and the lenders and
investors. It operates at various levels from firms to global to national levels. Thus, there are many
complexities involved in it related to markets, institutions, etc. An introduction to finance will provide a
basic idea of how the finance sector in general works in India.

MEANING OF FINANCE

Basically, finance represents money management and the process of acquiring needed funds. Finance
also encompasses the oversight, creation, and study of money, banking, credit, investments, assets, and
liabilities that make up financial systems

DEFINITION OF FINANCE

Webster’s Ninth New Collegiate Dictionary has given two definition of finance.

The first one says,

“Finance is the money resources, income, etc. of a nation, organization, or person.”

The latter one is,

“ Managing or the science of managing money matters, credit, etc.

Simon Andrade defines the term finances of the following ways:

1.“Area of economic activity in which money is the basis of the various embodiments, whether stock
market investments, real estate, industrial, construction, agricultural development, so on.”

2. “Area of the economy in which we study performance of capital markets and supply and price of
financial assets.”
In the finance system, credit, money, and finance are used as a medium for various exchanges.
So, they work as a known value for which the services and goods are exchanged.

Thus, in modern systems, banks financial instruments, financial markets, and services are
included. Also, this system allows for the funds invested, allocated, and moved within a smooth
process.

There are various components of financial systems. They are:

Financial Institutions

Financial institutions include banks and other non finance banking institutions. It is a company
that is engaged in the business of dealing with monetary and financial transactions like loans,
deposits, and investments.

It comprises various banking operations like trusting the companies, brokerage firms, insurance
companies, and dealers. A bank is a financial institution that is legally allowed to borrow and
lend money.

Along with these banks also provides financial services like an exchange of currency, wealth
management, and safe deposits. Generally, banks are categorized into 2 types. Investment
banks and commercial banks. While non-banking financial institution or NBFCs do not have a
banking license.

Furthermore, they are not supervised by any national or international regulatory body. NBFCs
generally function services such as risk management, market borrowing, investment, etc.

Financial Services
The economic services that are provided by financial institutions and covers a broader aspect of
money like managing money, banks, credit cards, debit cards are called financial services.

Also, the other financial services that are offered by the institutions are consumer finance, stock
brokerage, investment funds, and many more.
Financial Markets

Financial markets consist of 2 types of market, primary market, and the secondary market. This
is a broad term used to describe a marketplace where equities, currencies, and bonds are
traded. So, in the primary market, the exchange for the government, companies, are done by
the new companies. Thus, this is done through equity-based or debt-based securities.

Also, this process is facilitated by the investment banks that have set a beginning price and are
overseeing a sale for its investors. Once the sale is completed, it is further overseen by the
secondary market.

The secondary market comes after the primary market. Also, this is a marketplace where
investors buy and sells the securities that are already owned by them.

Financial Instruments
Financial instruments are the assets which can be traded in the market. They can also be a form
of package which is traded. Most financial instruments provide an efficient flow to facilitate the
transfer of capital.

Thus, this asset can be of any form from cash to a contractual right to receive and deliver the
cash. They are usually monetary contracts between the two firms. Also, these instruments can
be modified, traded, or settled.

The cash instruments are the instruments whose value is directly determined by the market.
They can also be securities which are tradable and transferable.

This includes deposits and loans. While for derivative instruments, the value is derived from
more than one underlying commodity, currency, precious metals, bonds stocks, etc.

AREAS OF FINANCE

Personal Finance :

Personal Finance is defined as “Mindful planning of monetary spending and saving, while also
considering the possibility of future risk.”
Personal finance may involve paying for education, financing durable goods such as real estate
and cars, buying insurance, investing, and saving for retirement. Personal finance may also
involve for paying for loan or other debt obligations.

The main areas of personal finance are considered to be income, spending, saving, investing and
protection.

The following steps, as outlined by Financial Planning Standards Board, suggests that an
individual will understand a potentially secure personal finance plan after:

• Purchasing insurance to ensure protection against unforeseen personal events;

• Understanding the effects of tax policies, subsidies, or penalties on the management of
personal finances;
• Understanding the effects of credit on individual financial standing;
• Developing a savings plan or financing for large purchases (auto, education, home);
• Panning a secure financial future in an environment of economic instability;
• Pursuing a checking and/or a savings account;
• Preparing for retirement or other long term expenses.

CORPORATE FINANCE

Corporate finance deals with the sources of funding and the capital structure of
corporations, the actions that managers take to increase the value of the firm to the
shareholders, and the tools and analysis used to allocate financial resources. Short
term financial management is often termed "working capital management", and relates
to cash, inventory and debtors management. In the longer term, corporate finance
generally involves balancing risk and profitability, while attempting to maximize an
entity's assets, net incoming cash flow and the value of its stock. This entails three
primary areas:

• Capital budgeting: selecting which projects to invest in (here, accurately determining value is

crucial as judgements about asset values can be "make or break”
• Dividend policy: the use of "excess" capital;
• Sources of capital: which funding is to be used.

The latter creates the link with investment banking and securities trading, in that the capital
raised will generically comprise debt, i.e. corporate bonds, and equity, often listed shares.
While corporate finance is in principle different from managerial finance, which studies
the financial management of all firms rather than corporations alone, the main concepts
in the study of corporate finance are applicable to the financial problems of all kinds of
firms. Although financial management overlaps with the financial function of
the accounting profession, financial accounting is the reporting of historical financial
information, whereas as discussed, financial management is concerned with increasing
the firm's Shareholder value and increasing their rate of return on the investment. In this
context, Financial risk management is about protecting the firm's economic value by
using financial instruments to manage exposure to risk, particularly credit risk and market
risk, often arising from the firm's funding structures.

PUBLIC FINANCE

Public finance describes finance as related to sovereign states, sub-national entities, and
related public entities or agencies. It generally encompasses a long-term strategic
perspective regarding investment decisions that affect public entities. These long-term
strategic periods typically encompass five or more years. Public finance is primarily
concerned with:

• Identification of required expenditure of a public sector entity;

• Source(s) of that entity's revenue;

• The budgeting process;

• Debt issuance, or municipal bonds, for public works projects.

Central banks, such as the Federal Reserve System banks in the United States and Bank of

England in the United Kingdom, are strong players in public finance. They act as lenders of
last resort as well as strong influences on monetary and credit conditions in the economy.
INTRODUCTION TO BUSINESS ANALYTICS

Business analytics uses data to create mathematical models to help organizations make decisions that
bring value or are in their best interest. There is much data out there for organizations to use, though what
data they choose and why they use it will vary from industry to industry. 

Data is such an essential tool for organizations because the data itself is objective, grounded in fact. It’s
this objectivity that can be most helpful for organizations in determining what decisions they need to
make to create the most value for them. 

Types of Business Analytics:

There are a few types of business analytics, all of which use data to accomplish a goal.
• Predictive analytics is focused on identifying probable outcomes.
• Prescriptive analytics recommends actions to an organization to help reach organizational trends.
• Descriptive analytics identifies an organization’s historical trends.
Most business analytic professionals use either predictive or descriptive analytics. 

What a business analytics professional does

Working in the field of business analytics, at its core, means collecting and analyzing data in a way that is
useful to your organization’s decision-making process. 

There are many avenues a business analytics professional can follow. Business analysts, data analysts,
and market research analysts are just a few. What about data science? Think of data science as a section
of business analytics that spends more time in more in-depth, more complex algorithms of the data than
other areas of business analytics.

It’s also important to know that data analytics is basically the same as business analytics. But data
analytics is focused on analyzing data and making predictions, while business analytics is also concerned
with making decisions from that data and predictions. 

Future of business analytics

People Analytics:
People analytics isn’t new. But it’s starting to gain traction in organizations. And it’s precisely what it
sounds like; it’s using data to understand and improve the people side of the organization. In theory,
intelligently used people analytics can help decrease turnover, make better hiring decisions, testing
employee policies for effectiveness, or figuring out what your organization needs in terms of employees
in the future. 

Business analytics tools will continue to improve in terms of their usability. This means that more users,
not just those trained in analytics to create reports or extract data. As more and more organizations place
an increasingly heavy value on data, the benefits of having a self-service analytics platform widely
available to their employees are becoming even more critical. 
“A STUDY ON BUSINESS ANALYTICS WITH REFERENCE TO TATA CONSULTANCY
SERVICES”

About TCS analytics & insights

TCS’ Analytics & Insights (A&I) service line helps organizations view, understand, and reimagine
their businesses through an intelligent data-centric approach. We design innovative solutions for
superior business outcomes and help customers execute effective data-driven strategies. The A&I
unit researches key emerging trends, including Artificial Intelligence, immersive analytics, mobility,
cloud computing and social networking to develop innovative, practical, and powerful applications to
deliver business results.

The founding principles of A&I unit are to provide Business Stakeholder Advocacy, Full Services
Play, and IP-based Value Realization and the NextGen strategy is powered by D3:

1. DATOMTM- an advisory framework to develop the right data, analytics and AI strategy aligned
to the customer’s business goals.

2. DAEzMOTM - is an end-to-end solution framework that leverages TCS’ Machine First™

approach to modernize the data and analytics estate across decision operations covering
EngineeringOps, DataOps and AIOps.

3. Decision FabricTM- is a state-of-the-art inclusive framework that brings together the power of
AI and immersive analytics to build innovative business solutions that deliver value.

Our powerful team of data scientists, statisticians, and domain experts supports multiple clients
across industries through our global delivery centers, and provides transformational solutions to
critical business needs. With our solutions, customers can realize benefits that include:

1. Up to 10% increase in sales

2. Up to 200% increase in campaign response rate

3. Up to 70% reduction in cost of customer acquisition

4. Up to 20% reduction in marketing spend

Awards & recognitions:

1. TCS Positioned as a Leader in the 2021 Gartner Magic Quadrant for Data and Analytics
Service Providers

2. TCS Positioned as a Leader in the Everest Group PEAK Matrix® for AI Services
Assessment 2021

3. TCS Positioned as a Leader in HFS Top 10 Triple-A Trifecta services 2020

4. TCS Wins the CIO100 Special Award for Business Transformers

5. TCS Wins 2021 Data Breakthrough Award for AI-Powered Software Suite

6. TCS was recognized with Global HR Excellence Award 2021 at the World HRD Congress for
Excellence in HR Analytics

We believe this recognition is a testament to our vision, strategy, and execution capabilities.