There are mainly two types of working capital–gross working capital and net working capital. Although many people tend to use the two alternatively, there are some stark differences between the concepts of working capital. Therefore, it is important to know the differences so that no confusion arises while considering the ... Read More

To measure a company’s success is to measure the growth of the company. There are a host of manners in which a company’s growth potential can be assessed.Assessment of Company’s Growth PotentialFollowing methods are the most significant ones to calculate the growth potential of a company −Revenues and EarningsRevenues and ... Read More

What is Sustainable Growth?The sustainable growth of a company is the growth that it achieves without having to finance its projects externally. In other words, the sustainable growth rate is the maximum rate of growth a company can achieve with its own funds.For example, a company may use retained earnings ... Read More

What is a Long-Term Financial Plan?A long-term financial plan is a projection of the business’s doable things to reach the financial goal of the organization. The business, therefore, must create the plan so that it acts as a warning, showing the pitfalls of cash flow dips, pinpointing the best time ... Read More

Businesses often make short- and long-term goals that are defined by financial plans. Financial plans may be both short- and long-term depending on their tenure. Short-term plans are usually of a year or less while long-term plans have tenures of more than one year.Both short- and long-term plans are inevitable ... Read More

Both financial forecasting and financial planning can be applied to businesses and individuals, depending on the needs of the companies and the people, respectively. While financial forecast is made on a future date, financial planning is used to reach the goal on the set date in a step-by-step manner.Financial Forecasting ... Read More

What do you understand by Financial Planning?The financial planning process is a systematic process of planning and forecasting. The finance managers usually take into account various inputs, place them in the modeling, and derive the outputs. Financial planning is an unavoidable process for every firm in order to face stiff ... Read More

What is Financial Planning?A company’s ultimate objective is to grow its sales and revenues and earn as many profits as possible from the markets. For this, it must have assets, such as equipment and machinery in its possession. The company must incur expenses to buy raw materials in order to ... Read More

The ultimate aim of a company is to earn profits and the financial managers play a big role in this by utilizing their skills and knowledge.Some of the major implications of the finance theory which can be summarized as follows −Wealth maximization as the Primary ObjectiveShareholders’ wealth maximization is the ... Read More

The roles and responsibilities of a financial manager were very limited in the past, about three to four decades back. However, in the modern day, the finance managers not only control the spending and the accounts, but they play a major role in directing the organization’s efforts to synchronize all ... Read More