Corporate finance is a specific area of finance dealing with the financial decisions corporations make and the tools as well as analysis used to make these decisions. The primary goal of Corporate finance is to enhance corporate value, without taking excessive financial risks.
The discipline may be divided among long-term and short-term decisions and techniques.
Capital investment decisions comprise the long-term choices about which projects receive investment, whether to finance that investment with equity or debt, and when or whether to pay dividends to shareholders.
Short-term corporate finance decisions are called working capital management and deal with the balance of current assets and current liabilities; the focus here is on managing cash, inventories, and short-term borrowing and lending (e.g., the credit terms extended to customers).