Future Value of Money
Concept of Future Value of Money Future value refers to the amount of cash that will be received at a certain time in the future if a certain amount of money is invested somewhere at a certain rate. Example: i) Johnson deposits $1,000 in a bank today at 10% interest. How much money will he […]
Concept of Time Value of Money
$100 today and $100 1 year from now are not worth the same. Today’s $100 is worth more. This is the concept of time value of money. From the point of view of finance, the value of money received in the future changes as time changes. This change in value of money over time is […]
Share Market
Where the securities such as shares, bonds, debentures etc. of the company are traded is called stock market. Stock market plays an important role in raising capital of the companies. Companies issuing shares and investors need an intermediary to facilitate the purchase and sale of shares. Such an organization is called stock exchange. Stock exchange […]
Concept of Financial Market
Scenario 1: Red Bull owns a grocery shop; He needed a loan of $100,000 to set up another new shop to expand his business. Which he will repay the loan for 10 years.Scenario 2: “X” company in manufacturing business for long; presently they need to build a new factory to increase their production; Company “X” […]
Capital Market
Capital markets consist of individuals or institutions engaged in the collection and distribution of capital.
Goal of Finance
The main purpose of running a business is to make profit. In this case it can be said that 2 things are considered as the main goals of financing: – 1) Profit Maximization 2) Wealth Maximization 1. Profit MaximizationIncreasing the profit of an organization is called profit maximization. In general terms, after deduction of total […]
Relation: Finance and Macroeconomy
Macroeconomics is the overall discussion of the country’s financial system rather than individual or a particular institution. The main goal of macroeconomics is the overall analysis of the economic system. Macroeconomics discusses how the general price level is determined by aggregate demand and aggregate supply in a monetary system.Total production of the country, total national […]
Functions of Finance
The organizational structure of a business is divided into various departments such as management department, purchasing department, sales department, accounting department and finance department etc. All the business functions of the organization are managed through the coordination of these departments. But among these departments the most important department is finance department, it has communication with […]
Principles of Finance
Principle of Finance Knowledge of principles and techniques of financial management and their proper application is very important for achieving the main goals of any business organization. A financial manager has to consider these principles of financing while making investment decisions and performing other financing tasks. Some important principles of financing are highlighted. Principle of […]
Nature of Finance
The scope of financing is very wide. Finance directly plays an important role in our personal, family, social and state activities. The financing process is as important for a business organization as it is for a non-business organization. Each institution is involved in a different financing process. This process takes different forms in different organizations. […]