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Finance Management Articles
Page 61 of 96
What is Comorian Franc (KMF) and how does it work?
The Comorian Franc (KMF) is the main currency in circulation in the island country of the Union of Comoros, which is situated in the Indian Ocean between Madagascar and Mozambique and has a population of around 400, 000 people. The KMF is divided into 100 cents. Originally linked to the French franc, the Comorian franc will be fixed to the euro as of 2020, replacing the French franc.Key Points BrieflyKnown as the Comorian franc, this currency is often used to refer to the African island country of Comoros.It enjoys a good exchange rate and is linked with the Euro. It ...
Read MoreWhat is an "Account in Trust" or "Trust Account" and how is it managed?
A trust account is an account that is managed by a trustee who acts on behalf of a third party. The trustees are selected by the investors and they have to act their best for the best results to the beneficiary. Parents often open trust accounts for their children. The parents act as fiduciary in such cases.Types of Trust AccountsThere are various types of Trust Accounts −Living Trusts − These trusts are revocable when the trust owner is alive. For example, the parents in the example above have full control while they are alive.Testamentary Trust − These trusts are enforceable ...
Read MoreWhat are A-shares and how are they traded?
China A-shares or simply A-shares are the stocks that are traded in Shanghai and Shenzhen stock exchanges. They are also called domestic shares because the Chinese currency Renminbi is needed in the trades.These shares are heavily restricted by the Chinese government and accessing them is almost impossible by foreign investors. However, the authorities have allowed some Qualified Foreign Institutional Investors (QFII) to deal in A-shares since 2003.China A-shares and China B SharesFor the foreign investors, there are B-shares that deal in Dollars. The idea is to keep foreign investors away from getting a share in Chinese companies while also allowing ...
Read MoreExplain horizontal integration in strategic management
Horizontal integration is a process when a company acquires/merges/takes over another company, who are in the same product line or its competitor.Company will go for horizontal integration to increase its size and capacity, to reduce its risk and competition, increase its market share and to expand its geographical area.ReasonsThe reasons to opt for horizontal integration are as follows −Growth in industry.Due to lack of expertise.To manage operations effectively.AdvantagesThe advantages of horizontal integration are as follows −Increase in product features and market reach.Increase its global presence.Cost reduction.DisadvantagesThe disadvantages of horizontal integration are as follows −Legal restrictions (depends on country legal laws).No ...
Read MoreState the differences between copyright and patent
In simple words a patent is nothing but securing an invention and copyrights are nothing but securing original ideas. Both are governed by different rules and regulationsCopyrightsThe main objective of copyright is to secure the original idea or expression of idea of an artist. An artist's work can be a computer program, music, song, movie or any original work. Example − a book written by a cook.Others can't reproduce the same book or without permission of the book but however they can use the recipes used in it. To get copyrights, the artist first has to register with the respective ...
Read MoreDifferentiate between trademark and copyright
Copyright and trademark comes under intellectual property. Although both look the same, sometimes it creates confusion in the readers' mind. Let us give brief idea about copyright and trademark and difference between themCopyrightThe main objective of copyright is to protect the artist's original work. Work may be a photo, book, painting, software code; article etc. copyright gives the owner a right to reproduce their work or profit off their underlying work.The principle involved is pretty simple "if you create something new or original work, you have to choose what to do". To get the copyrights you have to register first ...
Read MoreExplain various types of intellectual properties
The term property means an individual or an organization owns it and it is protected by means of law. Intellectual properties are intangible assets of a business or a person. It can be a book, article in a magazine, a new design etc. which comes under intellectual properties.TypesThe types of intellectual properties are explained follows −PatentsA patent protects innovative ideas. It gives special rights to the respective owner/organization in making, selling and using the product or service period. A government authority or license conferring a right will be issued. An individual or an organization will approach the patent authority, submit ...
Read MoreExplain intellectual property valuation in mergers and acquisition
Intellectual property is a type of intangible asset owned by a company and it is legally protected from outside use without company consent.In other words, intellectual property is an asset, which has the same protective rights just like a physical asset. It includes patents, copyrights, trademarks, trade secrets etc.Intellectual property valuation matters due to the followingTime and amount spent for intellectual property registration.It involves legal costs and other costs.Amount spent for advertising brands etc.Areas that require intellectual property valuation are as follows −Licensing.Transfer pricing.Purchase/sale of assets.Financial reporting.Corporate financing.Litigations.Methods of intellectual property valuation are as follows −Factors to be considered for ...
Read MoreExplain market approach (relative value) in mergers and acquisitions
In market approach, valuation of business (intangible assets, ownership interest, etc.) are determined based on market price of similar assets/business that are sold in recent times/available in market.Sales, book value and P/E (price to earnings) are used as price indicators. After comparing with similar assets/business adjustments to qualities, quantities and size will be made.MethodsThe methods in market approach are as follows −Public company comparableThis method uses valuation metrics of publicly traded companies. Direct comparability is hard to attain in major situations. Selecting, adjusting and applying are complex processes, and need highly skilled, and experienced people to handle it. Guideline companies ...
Read MoreExplain cost approach in mergers and acquisition
Cost approach has natural appeal. If merger/acquisition of two or more companies takes place then, new company value is the difference between asset and liabilities of its combined value.This analysis has similarities to the balance sheet. In this, the cost basis balance sheet is converted to required value. This approach in breakdown of components of value, facilitate structure deal and post-sale purchase price.Specialists identify all assets and liabilities including those which are not included in the balance sheet. After identification, they assign value for each, based on fair value.Contingent liabilities, pending litigations etc. are not included in the balance sheet.Another ...
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