Finance is defined as the management of money and includes activities such as investing, borrowing, lending, budgeting, saving, and forecasting. Finance is important for businesses as it is responsible for acquiring funds, managing funds within the firm, and planning expenditures. There are 5 key reasons why finance is important for modern businesses: it allows businesses to exist, ensures adequate funds are available, facilitates cash flow management, keeps long term goals in mind, and provides financial planning value and importance. Proper financial management is crucial for any business to meet its objectives.