A Finance Manager is a professional who manages the financial functions of an organization. As such, the financial manager is a top-ranking official in the business and he or she plays a vital role in making the business become successful. In the past, financial managers were not considered for the ... Read More

There is more than one definition of capital recovery in finance. When someone makes an investment on a company or an asset, he or she gets a negative return until the whole amount is returned. The RIO (Return on Initial Investment) made in such cases is called capital recovery.There can ... Read More

Many businesses in the corporate world tie too much of their value in assets which are inventory, real estate and equipment of the firm. Although, having assets is an important part of organizations, having too low cash in hand could be catastrophic for all businesses. This, short term cash held ... Read More

Net Present Value (NPV) is the value of a fund that would mature in the future. The NPV method is used for financial analysis and to determine the feasibility of a project. It is the value of future cash inflows and outflows in relation to initial investments made by an ... Read More

Agency costs are costs incurred to handle agency problems. These problems occur due to conflicts between the shareholders (principal) and managers (agents). The agency costs are used to mitigate the conflicts. Usually, there should be no conflicts between principals and agents in a company setting but if shareholders think that ... Read More

Firms raise funds for a variety of reasons, such as growth, expansion and research, and development. Some firms also raise funds to pay the debts back to the creditors and to fend off competition. Seeking lenders and investors to invest in the company is far more favorable than using the ... Read More

What is Profit Maximization?As the term suggests, Profit Maximization is a philosophy to maximize the profits from a business concern. In the free economy, there is always profitability if the goods and/or services are good. So, firms selling good products and services increase the prices of goods to generate more ... Read More

A financial manager plays a pivotal role in keeping the businesses intact and on track. By applying his or her knowledge, he or she builds the businesses should accept for profit maximization. He or she must also be a team player in order to coordinate the communication from the financial ... Read More

A Sinking Fund is a special fund that is created by depositing fixed payments each period to gain an estimated and fixed amount after a specific period. In other words, a sinking fund is an account that earns compound interest into which a fixed payment is made periodically for a ... Read More

The interest rates paid annually by financial organizations on an annual basis are known as Nominal Interest Rates. In such an arrangement, the interest is paid at the end of each year. If compounding is done, that will also be covered under this arrangement in one shot.However, there are arrangements ... Read More