Found 1120 Articles for Banking & Finance

The major differences between company and firm are as follows −CompanyRegistration is mandatory to establish as a company.They have legal entity and can be sue/sued under its name.It requires minimum capital of 1 lakh for private company and 5 lakhs for public limited.It is certificate of incorporation and commencement.Maximum number of members for a private company are 200 and for a public company the maximum number of members are unlimited.There will be legal formalities when a company decides to wind up/dissolve.For a company management of concern are its Directors.There is a perpetual succession.FirmThere is no mandatory registration is required for ... Read More

The major differences between corporate strategy and business strategy are as follows −Corporate strategyIt helps the business to operate a whole organisation.Its main aim is to elevate profits and making company grow faster.It is formed by top level management.It deals with operations of total business organisation.It is long term strategy.It is formulated at organisation level.Examples − expansion, etc.Business strategyIt is concerned with ameliorating the overall performance of an organisation.Its main aim is to compete with other products in the market.It is developed by middle level management.It deals with particular unit/division of a business.It is short term strategy.It is formulated for ... Read More

The major differences between National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) are as follows −NSENational Stock Exchange was founded in 1992.Its vision is “Continue to be a leader, establish a global presence, facilitate the financial well-being of people”.It is largest stock exchange in India.It is 11th largest stock exchange in the world.It facilities trading equity, equity derivatives, debt and currency derivatives segmentsbenchmark index is nifty.It is also called as The Largest Stock Exchange.The number of companies in this index are 50.More than 5000 companies are listed in NSE.It has high trading volume.BSEBombay Stock Exchange was founded in 1875.Its ... Read More

The major differences between NBFC and Bank are as follows −NBFCProvides banking services without holding banking license.Incorporated under companies Act 1956.Demand deposits are not accepted.100% foreign investments are accepted.Maintenance of reserve ratio are not compulsory.No deposit insurance facility is available.They don’t create credit creation.No transaction services are provided.BankIt is an authorised financial intermediary to provide banking services.Incorporated under banking regulation Act 1949.Demand deposits are accepted.Allows up to 74% for foreign investments in private sector.Maintenance of reserve ratio is compulsory.Deposit insurance facility is available.Banks create credit creation.Transaction services are provided.Read More

In a company, there are two types of reserves namely Capital Reserve and Revenue Reserve. The basic difference between the two is that, capital reserve is the fund created for non-trading activities, whereas the revenue capital is the fund created for trading activities. In this article, we will discuss all the important differences between capital reserve and revenue reserve. But before that, let's start with some basics of capital reserve and revenue reserve so it will become easier to understand how they are different from each other. What is Capital Reserve? The type of reserve that is created from the ... Read More

Provisions are used in financial accounting to set aside funds to provide for a future excepted loss/liability. It is compulsory for companies to make Provisions to meet their future expenses. Reserves, on the other hand, are the surplus funds that a company sets aside in order to invest in future projects. Read through this article to find out more how Provisions and Reserves are used in Financial Accounting.What is Provisioning in Accounting?A Provision is the amount which kept aside to cover future expenses. It is a separate fund which is kept aside to cover certain expenses. Note that a provision ... Read More

Accruals and Provisions are concepts in Financial Accounting that are used in different types of situations. Provisions are done for expenses that have not been occurred yet, while Accruals are funds kept aside to clear the unpaid dues. In this article, we will have a detailed look at how Accruals and Provisions are used in Accounting.What is Accrual in Accounting?The Accrual Principle is a concept in Accounting where the financial transactions are recorded during the same time period in which they occur, however the actual cash flow may occur at a later stage. For example, suppose a company supplies goods ... Read More

The major differences between book value and market value are as follows −Book valueReal value of an asset.Reflects firm’s equity.Not related to financial market.Depreciation is taken into account.Book value = (assets – liabilities)/ number of outstanding shares.Book value = cost of asset – (depreciation + amortization).Frequency of fluctuations happens at periodic intervals.Accounted in balance sheet based on historical cost, amortized value or fair value.Market valueMaximum value of an asset/security which can be bought/sold in the market.Reflects current market price.Market value is dependent on financial market.In most cases, depreciation is not accountable.Market value = market price per share * number of ... Read More

The major differences between equity and commodity are as follows −EquityCommodityInvestment/capital invested in a firm/entity to acquire ownership.Known as shareholder.Have ownership of that particular firm.Less volatile.Long term investments.Less risk compared to commodity trading.They get dividends.Better liquidity.Very few regulations, free market.Don’t need margin.Risk is not diversified.Do not have lot size.Traded on stock exchanges.long duration.Infosys, reliance etc.Refers to undifferentiated product on which traders can invest.Known as an option holder.No privileges are available.Highly volatile.Highly risky.Not eligible for dividends.Low liquidity compared to equity.Supervised by SEBI, derivative market.High margins required.Risk is diversified.Traded in lot size.Short term trades.Traded on commodity exchanges.They have time frame because they ... Read More

The major differences between investing and trading are as follows −InvestingCreates wealth over a long period of time.Buying and holding.Market fluctuations has no effect.Add on benefits − bonus, dividends etc.Fundamental indicators are EPS, price to earnings, current ratio etc.Long term period.Creates wealth by compound interest and dividends.Low risk.Industry, economics, financials, competitors etc. will be affected.Very few brokerage charges.Makes sound investments.TradingGenerates profit frequently.Buying and selling of stocks.Daily market fluctuations will effect.No add on benefits.Technical indicators: moving averages, stochastic oscillators etc.Short term period.High risk.Psychology of market, money management, risk rewards etc. will be affected.Have brokerage charges.Requires active environment.Read More