Running head: BUSINESS AND FAITH INTEGRATION
Business and Faith Integration Paper
Shuqi Li
Liberty University
BUSI-530
March 1, 2021
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BUSINESS AND FAITH INTEGRATION 2
Business and Faith Integration Paper
Introduction
The Bible is a book of justice and order, and many religions use it as a guide to their daily
activities and behaviors, which also reflect at their workplaces. The Bible talks about various
virtues, including respect, good governance, justice, transparency, morality, fairness, and
accountability. These and other concepts form the foundation of successful businesses. The Bible
directs business people to embrace the ethical code of conduct in the Bible (Brown, 2019). The
modern economy requires CEOs to achieve the organization's financial goals and earn socially
responsible and ethical profits. Shareholders are considering leaders who can act as good
stewards and provide honest results. Looking at these organizations' management reveals that
they follow many of the business principles stipulated in the Bible. This paper will discuss how
the Bible relates to some business concepts.
Net Present Value, Discounted Cash Flow, and Project Analysis
Net present value refers to the variation between the current value of cash inflows and
cash outflows over some time. Net present value assesses a project's profitability or investments
in capital investment and budgeting (Warren & Jones, 2018). The net present value makes use of
discounted cash flows in the assessment, making it more accurate than other capital budgeting
methods because it looks at both time and risk variables. It ensures that individuals can invest for
the future as advised in Proverbs 21: 5 that the diligent people's plans lead to profit while haste
leads to poverty (King James Bible). A net present value analysis entails various assumptions and
variables. It assesses a project's predicted cash flows by discounting them to the present using the
organization's weighted average cost of capital and the project's period. These tools help the
organization determine whether to invest in a project. The Bible stresses the importance of
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investing but making sure that one thinks long-term when doing so. In Luke 14:28, the Bible
says that if one wants to construct a tower, it is essential that they first estimate the cost and see if
they can afford it (King James Bible). Therefore, the Bible stresses the importance of evaluation
before an investment.
Capital Budgeting and Weighted Average Cost of Capital
Capital budgeting refers to the exercise of evaluating the profitability of anticipated
business investments, such as launching a new product. The weighted average cost of capital is
the first capital budgeting component (Warren & Jones, 2018). The weighted average cost of
capital is the amount an organization needs to gain every year from its investments to sustain its
present overall value. For the organization's future project to be successful, the project's internal
rate of return should be higher than its weighted average cost of capital. The Bible encourages
people to keep records and budget. Proverbs 24:3-4 reveals that a house is built through wisdom,
established through understanding, and precious and pleasant riches shall fill the chambers
through knowledge.
Corporate Financing, Debt Policy, and Venture Capital
Most organizations require financing to achieve their short-term or long-term goals.
Some organizations also need to source funding to acquire capital for their venture. Venture
capital refers to a type of financing that investors give to small organizations with long-term
growth potential (Warren & Jones, 2018). How an organization chooses to finance its
organization's venture can have an immediate effect on its value. An organization's debt policy
gives it a choice to can decide to mix debt with equity financing. The Bible stresses that people
should avoid unnecessary debt because borrowing makes them lose a portion of their freedom.
According to King James Bible, Proverbs 22: 7 says the rich rule over the poor, and a person
BUSINESS AND FAITH INTEGRATION 4
who borrows becomes a slave of the lender. Therefore, it is always essential to have proper plans
so that people do not sink into debts.
Long-Term Financial Planning and Payout Policy
A financial plan refers to what the organization needs to do to achieve its goals. Financial
plans comprise the combined capital budgeting analyses of each organization's projects. Long-
term financial planning is essential in the implementation of decisions that have long lead times.
A long-term financial plan should determine whether the organization will source internally or
externally to meet the required finances (Grozdanovska et al., 2017). A long-term financial plan
can also consider dividend policy, the retirement of debt, the repurchase of stock, and the target
capital structure. Payout policy refers to how an organization returns capital to equity investors,
which could be in dividends or share reputation. The Bible emphasizes that people should plan
so that they can be successful. Proverbs 21:5 says the diligent people's plans lead them to make
profits while haste leads to poverty. In Proverbs, 24:27, the Bible says that one should get
everything ready for their field and later build a house (King James Bible). It shows a long-term
financial plan to build a house after the field produces enough funds to complete the house's
construction. Therefore, planning is crucial to ensure that people complete their desired projects
with ease.
Short-Term Financial Planning and Working Capital
Organizations come up with short-term financial plans to achieve investment and budget
goals within one fiscal year. Short-term financial plans are more specific compared to long-term
financial plans. Organizations also use short-term financial plans to manage short-term cash
deficits (Grozdanovska et al., 2017). In most organizations, elements of working capital have an
immense impact on their short-term cash flows. These elements include cash, debtors, raw
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BUSINESS AND FAITH INTEGRATION 5
inventory, and creditors. Working capital refers to the difference between the organization's
current assets and inventories of raw material and finished goods. In Proverbs 13:16, the Bible
says that a wise person thinks ahead, but a fool does not and even brags about it (King James
Bible). The Bible emphasizes that people should not only plan for today but also for tomorrow.
Therefore, understanding their possessions ensures that they do not acquire excess debts that
could lead them to poverty.
Conclusion
The Bible is a useful guide for organizations on how to conduct their businesses. The
Bible emphasizes fairness, transparency, morality, justice, and accountability. The Bible has over
2000 verses about work, investment, planning, money, and possessions. The Bible encourages
people to have long-term and short-term plans so that they can succeed in their business. Most
organizations in the modern era require financing to achieve their goals start-up their businesses.
The Bible also encourages people to avoid unnecessary debt that they may be unable to pay.
Being in debt makes one lose a portion of their freedom and become a slave to their lender. The
Bible also encourages people to diversify their investment, not to put too much risk in one
basket.
BUSINESS AND FAITH INTEGRATION
References
Brealey, R. A., Myers, S. C., & Marcus, A. J. (2020). Fundamentals of corporate finance with
Connect (10th ed.). Boston, MA: McGraw-Hill.
Brown, T. (2019). Biblical Foundations in Business Pedagogy Modeling Christ-Centered
Professorship: Perspectives of Rwanda MBA Students.
Grozdanovska, V., Bojkovska, K., & Jankulovski, N. (2017). Financial management and
financial planning in the organizations. Financial Management, 9(2).
King James Bible. (2017). King James Bible Online. https://www.kingjamesbibleonline.org
(Original work published 1769).
Warren, C. S., & Jones, J. (2018). Corporate financial accounting. Cengage Learning.
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