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Posts published in “Corporate finance”

Better Business Economics and Banking

Better Business Economics and Banking 1) The main function of economics is to study ________. A) the exchange of goods and services between individuals, businesses, and nations B) the exchange of cultural information in a diverse society C) the stock exchange D) the exchange of diplomatic relations between nations E) the exchange of ideas about motivation and behavior in the workplace Answer: A Explanation: A) Economics is the study of how individuals and businesses make decisions to best satisfy wants, needs, and desires with limited resources. It is about businesses making goods or supplying services that we want or need…

Ch03 Budgeting Process

Corporate Finance – Semester 2 BUDGETING PROCESS The following topics will be discussed in this lecture. Budgeting process Purpose / functions of budgets Cash budgets – Preparation & interpretation The Budget Process The Budget process allows the company to: set its fiscal objectives in respect of revenue, expenditure, debt repayment and investment; maintain an effective fiscal control and plan for the coming year and beyond; allocate the available resources, consistent with the Company’s strategic objectives and priorities; fulfill the legislative requirements for the Budget; and Seek authority from Parliament for spending. All Managers have a key role in the budget…

Ch02 Time Value of Money

TIME VALUE OF MONEY Time Value of Money offers an overview of the information required to calculate the future and present values of individual cash flows, ordinary annuities, due perpetuities and investments with uneven cash flows. TVM is based on the concept that a dollar that you have today is worth more than the promise or expectation that you will receive a dollar in the future. Money that you hold today is worth more because you can invest it and earn interest. After all, you should receive some compensation for foregoing spending. This hand out has been divided into following…

Corporate Finance – Problems associated with High gearing and dividend policies

Corporate Finance Semester 2 PROBLEMS ASSOCIATED WITH HIGH GEARING & DIVIDEND POLICIES The following topics will be discussed in this lecture. Problems associated with high gearing Bankruptcy costs Optimal capital structure Dividend policy Types of dividends and important dates Dividend policies Factors influencing dividend policy Irrelevance of dividend policy Problems associated with high gearing A general term describing a financial ratio that compares some form of owner’s equity (or capital) to borrowed funds. Gearing is a measure of financial leverage, demonstrating the degree to which a firm’s activities are funded by owner’s funds versus creditor’s funds. The higher a company’s…

FINC 421 Discussion Board Post 5

1. Prepare a critical analysis of the statement of cash flows in the Form 10K report for the company that you selected for the Company Analysis Project.  Using actual financial data, explain the strengths and weaknesses of the company’s cash flows over the past (most recent) 3 years? 2. Calculate the most important cash flow ratios for the company that you selected for the Company Analysis Project for the past 3 years and compare the ratios to the firm’s principal competitors?  What strengths and weaknesses are noted in the analysis? 3. For the company that you selected for the Company…

Corporate Finance: Ch01 Introduction

Corporate finance INTRODUCTION Corporate finance is the study of planning, evaluating and drawing decisions in the course of business. Let’s take a simple example to determine the scope of our subject. This would cover around 85% to 90% of scheme of studies of corporate finance. Suppose you intend to kick start a business. Three up-front questions that hit our top of the head are: What type of investments do we need? In other words, what type of assets will be required to support the intended business? Where the money will come from? Sources of investments to be determined in black…