Corporate finance is the area of finance dealing with monetary decisions that business enterprises make. When finance is talked about in the context of business decisions, it is called corporate finance (technically, corporate finance deals only with corporations, while managerial finance deals with all types of companies, but we will use the terms interchangeably). There are other branches of finance such as personal finance (individuals taking care of their money) and public finance (the finances of the government).
The primary goal of corporate finance is to maximize shareholder value. Maximizing shareholder value can be done over the long-term or the short-term, so the job of the finance department is to determine how best to do both. Sometimes, the goals may appear to be in competition with one another. For example, a company can choose to pay dividends (a small payment to each person who owns a stock of a company), which increases short-term shareholder wealth. However, paying dividends means that the money is not being invested in long-term investments, which may cause the stock price to increase more in the future, and thereby increasing long-term shareholder wealth.
The technique behind maximizing shareholder value is the management of assets. This means that the finance department figures out how to best invest its money.
For example, a company could have two proposals from the R&D department to develop different products, but only enough money to fund one . The finance department will project out the future revenues and costs of each product and figure out which one, if either, is worth the money.
Source: Boundless. “Role of Finance in an Organization.” Boundless Finance. Boundless, 03 Jul. 2014. Retrieved 14 Mar. 2015 from https://www.boundless.com/finance/textbooks/boundless-finance-textbook/introduction-to-the-field-and-goals-of-financial-management-1/introducing-finance-22/role-of-finance-in-an-organization-144-3870/