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Ownership Securities
Business Funds: Understanding Equity, Preference, and Other Share Types Businesses require a continuous flow of funds to operate and grow. These funds can be categorized based on time period, ownership, control, and source of generation. This document will foc...
Debentures and Bonds
Understanding Debentures and Corporate Bonds Debentures Definition: A debenture is a formal document issued by a company that serves as an acknowledgement of a debt. Think of it as a loan certificate or an "IOU" from the company to the lender (debenture holde...
Ploughing back profits and loan financing
Understanding Ploughing Back of Profits and Loan Financing This document explores two important concepts in corporate finance: the ploughing back of profits and the merits and demerits of loan financing. These are fundamental strategies that impact how busines...
Capitalization and its theories
Understanding Capitalization in Business Introduction Every business aims to maximize its value. To achieve this, both finance managers and individual investors need to understand the concept of capitalization. Capitalization essentially refers to the total va...
Other sources of finance
Bootstrapping is the process of starting and growing a business using your own resources, rather than relying on external funding like investors or loans. It's a common path for many early-stage startups, and it offers a lot of control and flexibility. What i...
Over capitalization and Under capitalization
Over-Capitalization Concept of Over-Capitalization Over-capitalization is a situation where a company's total capitalization is greater than the real value of its assets. The earning capacity of the company is lower than what its capitalization would suggest....
Watered stock, under trading and over trading
Watered Stock Watered stock is an illegal practice where a company issues shares at a value that is much higher than the actual value of the company's assets. It is a way to fraudulently inflate the value of the company. It typically happens by overstating the...
Capital Structure: Meaning, Importance, and Determinants
What is Capital Structure? Think of a building's framework. It's not made of just one material; it's a blend of steel, concrete, and wood to provide strength and stability. Similarly, a company needs a well-planned capital structure, which is the way it raises...
Capital gearing and theories of capital structure
What is the Capital Gearing Ratio? The capital gearing ratio, also known as the debt-to-equity ratio, is a financial metric that indicates the proportion of a company's capital that comes from debt compared to its equity. Essentially, it shows how much a compa...
Effect of capital structure on EPS, EBIT-EPS Analysis
The Link Between Capital Structure and EPS As we've discussed before, a company's capital structure – the mix of debt and equity it uses to finance its operations – has a significant influence on its Earnings Per Share (EPS). EPS, a key measure of profitabilit...
Point of Indifference
Understanding the Point of Indifference The point of indifference, in the context of capital structure, represents the specific level of Earnings Before Interest and Taxes (EBIT) at which two different capital structures will result in the same Earnings Per Sh...
The Buyer Decision Process and Business buyer decision process
The Buyer Decision Process in Marketing The buyer decision process is a fundamental concept in marketing, outlining the steps a consumer goes through when deciding to make a purchase. Understanding this process allows marketers to target their efforts more eff...
Core Marketing Concepts
Core Marketing Concepts Needs, Wants, and Demands Needs: Basic human requirements or states of felt deprivation. Examples: Air, food, water, clothing, shelter, recreation, education. Wants: When needs are directed to specific objects that might satisfy ...
Capital Budgeting and Time Value of Money
Capital Budgeting: Simplified Notes What is Capital Budgeting? Capital budgeting is basically deciding which long-term investments a company should make. Think of it like this: you have a limited amount of money (capital) in Rupees (₹) and lots of opportunitie...
Capital Budgeting: Process, Methods, and Problems
Capital Budgeting: Process, Methods, and Problems This document explains the capital budgeting process, traditional and modern project appraisal methods, and provides practical examples with solutions. Capital Budgeting Process (4 Steps) The capital budgeting ...
Primary and Secondary Markets
Primary and Secondary Markets Initial Public Offering (IPO) When a company seeks to list its shares, it may: Become listed or quoted Float on the stock market Go public Make an Initial Public Offering (IPO) Primary Market The marketing of new shares in a c...
Depositary receipts, world stock markets, indices and settlement systems
Depositary Receipts What are Depositary Receipts? Financial instrument representing ownership of a foreign company's shares. Allows indirect investment in foreign companies without directly purchasing shares. Various forms: American Depositary Receipts (ADRs...
Money market, Property and FX
Money Markets Wholesale/institutional markets for cash. Issue, trading, and redemption of short-dated negotiable securities. Maturity up to one year (typically three months or less). Instruments issued at a discount to face value. Money Market Funds Money m...
Global Financial Services
1. Budgeting Definition: Creating a plan for how to spend your money. Purpose: Track income and expenses. Identify areas to save. Achieve financial goals (e.g., buying a house, retirement). Avoid debt. Key Steps: Calculate Income: Know your net incom...
Regulation and Ethics
Regulatory Principles, Financial Crime, Ethics: Course Notes 1. Need for Regulation Protect Investors: Ensure fair markets and prevent fraud. Maintain Market Integrity: Promote transparency and prevent market manipulation. Promote Financial Stability: Pre...