Financial modelling is a process of creating company’s financial performances in a spread sheet or excel sheet. It is created based on historical performances and assumptions about future. Various numerical models and theories will be used by the financial analyst to forecast the future earnings of the company.Objectives of financial ... Read More

Non-financial performances have great impact on non – tangibles of a firm. Many of these performances will not focus on the money generation, but they will have positive impact on finances related to business organisations.Some of them are explained below −Developments of new services/productsResearch and development goals will help goals ... Read More

Organisations need different set of objectives, to attain their success. These objectives give a plan or directions to the organisation to meet their long term goal.Some of the objectives are explained below −RevenueRevenue generation is the main objective of an organisation. It plays an important role in project life cycle. ... Read More

William Sharpe, a financial economist developed Capital asset pricing, model in 1970. According to his book, “portfolio theory and capital markets”, he defined risk as systematic risk and unsystematic risk.Systematic risk is related to interest rates, recessions etc., where perils of investing can’t be diversified. Whereas, unsystematic risk is related ... Read More

Financial strategy tells about how to gather funds and how to utilise the funds. The main purpose is adequate supply of funds to meet present and future needs of business activities. The main aim is to maximise financial value of a firm.Evaluating financial performances − Firm financial performances can be ... Read More

There are 3 types of accountsReal account − It relates assets and liabilities; it does not include people accounts. They carry forword every year.Personal account − Connects individuals, firms and associations accounts.Nominal account − Relates all income, expenses, losses and gains accounts.Golden rules of accountingDebit the receiver, credit the giverIf ... Read More

ADR means American Depository Receipt. ADR is a certificate issued by an American Bank which states that number of shares of another country firm can be traded in U.S. markets. JPMorgan a British departmental store created first ADR in 1927. According to Securities and Exchange Commission (SEC), instead of foreign ... Read More

GDR stands for Global Depository Receipts. It is an instrument in which a company in one country issues its shares or convertible bonds in another country. It is a depository receipt, where the security certificate is issued by financial intermediaries (like depository bank), purchases the security and then creates bank ... Read More

Source of finance can be simply explained as follows −Based on timeLONG TERMMEDIUM TERMSHORT TERMBASED ON TIMEEquity sharesPreference sharesTrade creditPreference sharesDebenture/BondsWC loansInternal accrualsfinancial institutesgovernmentcommercial banksFixed deposits (period of 1 year)Debentures/bondsAdvances from customersTerm loansCreditorsVenture fundinglease financePayablesAsset securitizationHire purchase financeFactoring servicesInternational financeBill discountingBased on ownership and controlOwnedBorrowedBased on ownership and controlEquity capitalLoans ... Read More

The term breakeven point in terms of accounting is nothing but, in a particular accounting period the firm revenues is exactly as same as expenses. This is denoted as BEP (Break Even Point). It tells about number of units to be sold to meet the expenses. It also helps in ... Read More