Opportunities and Major Areas of Finance
With the right major areas of financing, companies can invest in new projects, which help expand their business and increase profits.
Wealth Maximization
Wealth maximization is the process of increasing the income and wealth of the shareholders by increasing the profits of the organization.
Goals/Objectives of Financial Management and it’s Importance
Profit maximization: Increasing the profit of the organization is one of the main objectives of financial management.
Business Funding: Types, Sources and Management
Proper arrangement of money and management of that funds is very important for running business activities.
Interest on Loan
Concept of Interest Interest is a financial transaction in which a borrower is obligated to pay an additional amount to a lender in return for borrowing a certain amount of money (principal). This extra money is called “Interest”. Basically interest rate is fixed as per the contract. The process of charging interest on debt applies […]
Present Value of Money
Concept of Present Value of Money The two aspects of time value of money are present value and future value. Present value refers to today’s value of money which will received in the future. Determining the present value of money is very important in making financial decisions. Let’s say, you want $5,000 after 3 years […]
Classification of Cash Flow
Generally, cash flow statement divided into three parts.(a) Cash Flows from Operating Activities(b) Cash Flows from Investing Activities(c) Cash Flows from Financing Activities (a) Cash Flows from Operating ActivitiesOperating activities refers to activities related to production and sales. Operating activities are revenue generating activities. In other words, the transactions related to the determination of profit […]
Cash Flow Statement
Cash flow refers to the inflow and outflow of cash. Cash inflows and outflows occur through various activities of a business organization. In business, cash outflow occurs through purchase of goods and cash inflow occurs through sale of goods. Cash flow is directly related to the purchases and sales of an organization. Fixed assets like […]
Key of Financial Analysis
Financial analysis is the process of identifying a company’s strengths and weaknesses by analyzing the relationships between the various components of its financial statements (income statement, balance sheet, and cash flow statement). Principal Tools of Financial Analysis 1. Comparative Financial Statement 2. Common Size Financial Statement 3. Ratio Analysis 4. Analysis of Cash Flow 5. […]
Financial Analysis – Basics
At the end of a specific accounting period, an income statement is prepared to determine whether a business has made a profit or a loss, and a financial statement is prepared with assets, liabilities, and capital to understand the financial status. However, the users of financial information can’t find all the details they need from […]