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Business and Faith Integration Assignment:
Managerial Finance, Financial Planning, Corporate Finance, and Estate Planning:
An Integration of Principles with Biblical Insights
David Williamson
Department of Business, Liberty University
BUSI 530: Managerial Finance
Ken Roberts
October 6, 2024
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Finance is a highly technical, nuanced subject ranging from managerial finance to
financial planning, corporate finance, and estate planning. All of these fields contribute to the
success of helping people and companies control their money, make the right decisions, and meet
financial targets. But they’re usually even more valuable when grounded in moral principles and
deep truths far beyond the standard advice. In this essay, we will take a look at the foundational
elements of these money ideas and how they can intersect with biblical ideas to promote an all-
encompassing philosophy of money management.
Managerial finance is the branch of finance that concerns the management of a firm’s
financial activities. It involves the planning, directing, monitoring, organizing, and controlling of
a firm’s monetary resources. Because of the importance of financial decisions, managerial
finance plays a critical role in the performance of a firm since it deals with the financial aspects
of how a firm achieves its objectives. There are some crucial functions of managerial finance,
such as capital budgeting – this function requires the firm to determine which projects to
undertake, and working capital management – this function consists of all the planning and
control techniques used by business owners to manage their company's most liquid short-term
assets and liabilities.
Stewardship is of Biblical origin. Christians are directed to view the world and all its
resources as having been put into their hands by God for their care and management. Therefore,
everyone, whether individual or corporate, should approach every element of financial planning
and stewardship with the careful consideration that comes from being a responsible steward. For
example, Proverbs 21:5 tells us: “The plans of the diligent lead to profit as surely as haste leads
to poverty.” It might all sound pious, but what does it really mean for stewardship, or any other
Biblical instinct, to matter in the collection of operating principles? Fooshee (2021) states, “I
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believe that one of the major themes of the Bible is obedience to the Lord. These financial
principles are real, and obedience to them demonstrates that Christians are trusting God in
another area of their lives.”
Financial planning generally refers to a process of setting goals for one’s financial
situation, and figuring out what to do in order to reach such goals – the specifics could range
widely, from drawing up a budget, to putting aside savings, to investing money, or planning for
retirement. At heart, good financial planning entails understanding one’s financial situation,
setting realistic goals, and coming up with a strategy for how to reach those goals.
Plans are important: The Bible emphasizes the importance of planning. Consider Luke
14:28-30: “For which of you, intending to build a tower, does not sit down first and count the
cost, whether he has enough to finish it?” Once again, by suggesting that planning is necessary
so that projects have the best probability of success, Jesus is giving implicit advice about
financial planning.
The area of corporate finance covers the financial decisions of corporations and also how
the long-term and short-term financial planning along with different strategies of a corporation
can increase the shareholder value. A wide range of topics is covered in the subject of corporate
finance including the capital investment, funding decision and dividend policy.
Corporate finance also works through moral foundations. Often, questions of business
ethics and integrity are addressed in the terms of integrity and character. In Proverbs we read:
“The Lord detests dishonest scales, but accurate weights find favor with him.” (Proverbs 11:1)
Accurate data and integrity are hallmarks of corporate financial reporting. This verse is also
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relevant, for its concern with the nature of good corporate governance. Deals, in the business
landscape, should be honest, sound and ethical.
Estate planning is a legal process that organizes the ownership or disposal of a person’s
estate during life and at death. The determination or range of estate planning includes the
drafting of a will and other estate planning documents such as trusts. The process takes into
consideration taxes, inheritance, the disposal of assets, life events and many other circumstances
and events. Good estate planning results in a final plan with the goal that the estate’s wishes are
honored and beneficiaries, whether family or charity, are cared for.
The Bible goes on extensively about charitable giving and legacy. Proverbs 13:22 reads:
“A good person leaves an inheritance for their children’s children, but a sinner’s wealth is stored
up for the righteous”. This is an explicit suggestion of a duty to future generations, and planning
for your inheritance. And there’s an injunction for generosity of heart in 2 Corinthians 9:7: “Just
as you excel in everything – in faith, in speech, in knowledge, in complete earnestness and in
your love for us – see that you excel in this act of grace also.” So, we’re told to give what we
have decided in our heart to give, not grudgingly or under compulsion.
While managerial finance, personal budgeting, corporate finance and estate planning
primarily seek to ‘make money’ or at least help a business or individual do so, in many instances
and by considering several parameters, they could be greatly enhanced by integrating ethical and
moral paradigms derived from Biblical ethics. Here are some selected overlaps:
Stewardship vs. Profit Maximization:
Managerial finance likewise provides another version of the classical Biblical curriculum’s
variant, but different, tale of good stewardship: act in the administration of God’s stewardship of
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His material gifts to you with prudence and efficiency. Such a combination can result in ethics
paying off, increasing the possibility of prosperity not for the next quarter, but forever.
Diligence in Financial Planning:
Financial prudence is planning ahead, and Biblical guidance about being diligent and
making provisions for the future reinforces the importance of good planning. Caring and ethical
financial planning efforts usually result in good outcomes not only for the planner but also for his
or her neighbors and family.
Transparency in Corporate Actions:
In corporate finance, the objective is for the business to operate in such a manner as to
maximize value. According to the Biblical worldview, if organizations are steered well, they can
ensure fair conduct, and conduct based on high ethics and transparency, leading to more trust and
stronger relationships with key stakeholders.
Risk Assessment:
Risk assessment and management is critical to everything we do in finance. Corporate
finance involves planning for market fluctuations; personal planning can mean insuring your
assets or diversifying your portfolio investments. Prudence and financial wisdom are found in
many biblical teachings, akin to risk assessment and mitigation strategies; for example, Proverbs
21:20 advises wise resource allocation: “The wise store up choice food and olive oil, but fools
gulp theirs down.”
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Cash-flow Management:
Cash-flow Management is how individuals and companies survive and even grow. The
equivalent of financial planning, which involves cash-flow management for current outlays and
income and preparation for the future. Tithing (tithe), which encourages giving back a
percentage of one’s income as a form of savings, is a Biblical principle of CFO (chief financial
officer) living. Living within one’s means; being a ‘cheapskate’ is a form of CFO living that
normally assures cash-flow health.
Legacy and Stewardship:
Family estate planning reinforces the importance of stewardship, seeking to distribute
one’s wealth in ways that reflect one’s values, and are consistent with one’s past actions. This
can include the donation of wealth to foundations or trusts crafted for these organizations
according to the giver’s personal interests and beliefs. Similarly, corporate social responsibility
(CSR) in firms aims to make a positive contribution to the communities in which staff live,
similar to the biblical injunction to ‘love thy neighbor’ and aid the poor. When summarizing our
responsibilities regarding stewardship and the legacy we leave behind, let us consider the words
of David Black (2023): “Many Christians act like God owns the 10% they tithe and they own the
other 90%. The truth is that God owns 100%! The fact that God owns it all and we are managing
His money ought to change our perspective on how we spend, save, invest, and give the money
He’s entrusted to us.”
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References
Black, D. (2023). 6 Biblical Principles of Financial Planning. Beacon Wealth Blog.
https://www.beaconwealth.com/6-biblical-principles-of-financial-planning/
Fooshee, G. (2021). 10 Financial Principles That Are Biblical. Back to the Bible.
https://www.backtothebible.org/post/10-financial-principles-that-are-biblical
Holy Bible, New International Version. (2011). Zondervan.
