Found 1120 Articles for Banking & Finance

The major differences between stock market and commodity market are as follows −Stock marketHave same security in same grades.All securities have same face value and characteristics.Doesn’t deteriorate over a period of time.Derive its value from an underlying asset.Supply is fixed.Commodity marketHave several grades/varieties of products/commodity.Grade may vary from other lots in same grade.Greater implications for buyers and sellers.Has basic role in future market.Supply is not fixed.

The major differences between stock market and stock exchange are as follows −Stock marketStock exchange will take place through different parkways.Without stock market, trades would have no motivation to exist.OTC, ECN, Stock exchange are types.Doesn’t work as cleaning house.Common for all form of stock trading.Conducts trading activities.Stock exchangeOrganisations have precise stream of stock purchasing and offerings.Without stock exchange, organisation have no formal system to rundown offers.NSE, BSE, DOW JONES, NYSE are types.Works as clearing house.Made up by an organization to promote stock trading.Operate under a profit motive.

The major differences between CAPEX and OPEX are as follows −CAPEXBenefits organization more than one year.Also called as capital expenditure, capital expense.One-time purchase.Long term tenure.They are depreciated or amortized over the time.Listed as property or equipment.Earns profits slowly/gradually.Lending institutions act as source of finance.CAPEX comes in balance sheet.Examples − buying of fixed assets, expansion of buildings, purchasing vehicles etc.OPEXOngoing expenses to run day to day operations.Also called as operating expenses, operating expenditure, revenue expenditure.Pay as you go.Relatively shorter term tenure.Fully deducted in the accounting period in which they were incurred.Listed as operating cost.Earned profits for shorter time.Personal saving act as ... Read More

The major differences between present value and future value are as follows −Present valueCurrent value of cash flow in future.Current value of an asset or an investment at starting of a particular time period.Inflation is considered.Discount rate and interest rate are considered.Helps investors in decision making.Discounted process/method is followed.Present value = (cash flow)/ (1 + r)^n.Future valueValue of future flow after certain future period.Value of an asset or an investment at the end of a particular time period.Inflation is not considered.Only interest rates are considered.Least considered by investors in making investment decisions.Capitalization process/method is followed.Future value = (present value) or ... Read More

The major differences between present value and net present value are as follows −Present valueSum of discounted value of cash flow at a particular discounting rate.Measures future cash flows today.Does not measures additional wealth.Does not provide any information about incremental value of a project/investment.Present value = Future value / (1 + r)^n.Calculates present value of future cash flow.Easier to use.Uses time value of money concept.Decision making by individuals.Net present valueSum of discounted value of future cash flows net of initial investments made by the company.Measures value of a project.Calculates additional wealth generated.Calculates incremental value.Net present value = present value of ... Read More

The major differences between invoice and bill are as follows −InvoiceWill have detail list of purchased products, their quantity, price, taxes (if any) etc.Handed over by seller to buyer at any time (before/after service or product).Advanced has to be paid.Records all the items placed.Invoices may arrive along with the goods or after they arrive.If invoice bills arrive late, it serves as a record to cross-checked the contents with the buyer.Examples − amazon, bike showrooms etc.BillServes as request for payment.Handed over directly to buyer from seller.Payment is made immediately.Records sold items, their price, total cost, services etc.For online goods, there will ... Read More

The major differences between private equity and venture capital are as follows −Private equityInvestments made in those companies which are not publicly listed on any stock exchange.Buys from mature and public companies.Focus will be on all kind of industries.Want to acquire almost full stake of the company in an LBO.Combination structure (debt + equity).Investments made in few companies.Mainly focus on corporate governance.Less risk involved.Venture capitalFinancing small business.Invest mostly in start-up or early stage companies.Focus on technology, biotech and clean tech companies.Acquires minority stake (

The major differences between American Depository Receipt (ADR) and Global Depository Receipt (GDR) are as follows −American Depository Receipt (ADR)Main purpose is to acquire resources in USA.Main objective is to attract investments from foreign companies.Issued by US domestic capital market.Foreign companies can trade in US markets.US dollar as currency.Listed in The New York Stock Exchange (NYSE) or NASDAQ.Retail investor market.Negotiation done in US only.Legally complicated.Onerous disclosure of terms.Global Depository Receipt (GDR)Main purpose is to acquire resources in different parts of the world.Main objective is to invest in different parts of the world.Issued by European capital market.Foreign companies can trade anywhere ... Read More

The major differences between financial leverage and operating leverage are as follows −Financial leverageOperating leverageUse of capital structure to earn better returns and to reduce taxes.Tells about capital structure of the firm.Measures financial risk.Relates EBIT and EPS.More the financial leverage, more financial risk.Preferred high.DFL = EBIT/EBT.Rise to financial risk.Degree of financial leverage relates to liabilities side in balance sheet(different source of finance).Firm ability to use fix costs to generate more returns.Tells about fixed cost of the firm.Measures operating risk of the business.Relates sales and EBIT.Higher the operating leverage, more operating risk.Preferred low.Rise to business risk.DOL = Contribution/EBIT.Degree of operating leverage ... Read More

The major differences between leasing and financing are as follows −LeasingFinancingLegal agreement between lessor and lessee.Ownership is with lessor.Principal and interest component is considered.Risk is with lessor.Very affordable.We can use the asset.Monthly payments are low.Choice of buy the asset or return to the lessor is available.Partial amount is paid to buy the asset.Ownership is with the borrower.Down payment or instalments are considered.Risk is with borrower.Restricts affordability.We can own the asset.High monthly payments, when compared to lease.Own the asset after fully payment is made.