Finance!

Finance is a field related to investment research. This involves dynamics of assets and liabilities over time, under more or less uncertain and dangerous circumstances. Money is also called science of money management. Finance aims to evaluate assets based on the level of risk and expected returns. Finance is divided into three subcategories: public finance, corporate finance, and personal finance.

Corporate Finance!

Corporate finance discusses the source of financing and the capital structure of the company, measures to promote the improvement of the shareholder value of the company, tools and evaluation used to allocate resources. This principle differs from the management of financial analysis of financial management of all companies, not just corporations, but the basic concept of corporate finance of financial statements is applied. Problems of all kinds of companies. Corporate finance usually involves balancing risk and profitability while maximizing corporate assets, net cash flow and inventory, and three general business development areas. , In the first step "investment budget", management should choose the "project" (if any) to be implemented. In the budget budget you can also use the general valuation method or extend the actual payment option. See Financial Modeling. The second "capital source" is provided by shareholders in the form of self funds (individuals or IPOs) for investment funds, with respect to the method of financing investments. Savings Bank) Creditors often have the form of securities and the operation (cash flow) of business. Short-term funding or capital is usually provided by the bank that provides the credit card. The balance of these elements forms the capital structure of the company. The third "Dividend Policy" requires management to determine whether unpaid earnings (surplus funds) should be retained for future investment / management needs or should be shared with shareholders. In what form The long-term financial management is often called "working capital management" and is related to the management of money, stocks and debtors.

It also includes business finance to invest in business analysis, inventory management or investment management. Investment is to acquire assets in hopes of maintaining or increasing value over time and the rate of return when paying dividends will be high. Investment Management - Portfolio Selection - Using financial analysis, you need to decide what, how much, when to invest. To do this, companies need to do the following:

Identification of relevant objectives and constraints: review of individual agencies or objectives, deadlines, risk assessment and taxation systems;

Identify the appropriate approach: active vs. passive hedge strategy

• Measure portfolio performance

Finance Services!

Companies whose revenue exceeds expenditure can lend or invest excessive profits to gain future profits. Even companies whose revenue is below the cost can also sell credits and stocks to capitalize, reduce costs, and increase revenue. A lender can find a borrower, a financial intermediary such as a bank, or purchase bonds or corporate bonds (corporate bonds, government bonds or mutual obligations) in the bond market. The beneficiary receives interest, the payer pays higher interest than the borrower, and the financial intermediary deducts the difference in loan settlement.

Banks combine the activities of many borrowers and borrowers. Banks receive deposits from borrowers who pay interest. The bank lends these deposits to borrowers. Banks allow borrowers and borrowers of various sizes to organize their activities.

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Budget!

Budget is a financial plan for a specific period (usually one year). It also includes anticipated sales and volume, resource volume, costs and costs, assets, liabilities and cash flows. Companies, governments, families, and other organizations are used to publish strategic plans for activities and events in measurable terms. 

Budget is the amount allocated for a specific purpose, the sum of the estimated cost, the way it approaches it. This could result in a good budget that will provide money for future use, or a deficit that exceeds your revenue.

 Etymology!

Budget (derived from old French word Boob, Wallet) is a quantified financial plan for the next two years. 

Budget is an important microeconomic concept that uses budget lines to describe considerations between two or more products. In other words, the budget is an organization plan stated in money.

 Purpose!

The budget helps you plan the work on site. This allows executives to think how events change and what actions must be taken. In addition, administrators can also coordinate the activities of an organization by examining the relationship between their work and other services. Other budget requirements are as follows.

• Resource management

• Tell the plan to the various managers of the center manager

• Encourage instructors to achieve budget objectives

• Check driver performance

• Make the company's performance visible

• About responsibility

In summary, the purpose of the Budget tool is as follows.

1. The tool provides predictions of revenue and expenditure, which is a model of business funding when specific strategies, events, plans are realized.

2. You can use the tool to measure the actual financial activity of the company in forecast.

3. Finally, the equipment identifies the project, program, or operational cost constraint.

Corporate!

Although the company's budget is announced every year, it is usually not a final budget that requires much effort, but it is a plan for the near future. In principle, hundreds of people, if not hundreds, are deployed in various fields (operations, personnel, IT, etc.) to determine expected income and expenditure.

Event management!

If the actual budget figure is consistent with the budget, this indicates that the manager understands his activities and makes it successful in the direction of want. On the other hand, if the number deviates from the budget, the signal "Uncontrollable" will be sent, possibly reducing the price of the action. The campaign planner enters two types of costs into one campaign. Initially it is the number of staff needed to plan and execute the campaign. The second type of cost planning is that the cost of the campaign itself is high.

Budget is a basic tool for predicting with reasonable accuracy whether an event results in revenue, loss or damage. The budget can also be used as a price tool.

Budgeting has two basic methods or philosophies. The strategy tells about mathematical models and other people.

The first thing to look at the school is that if the financial model is developed properly, we can predict the future. Variables focus on inputs and outputs, managers, and so on. Investment in time and money is to complete these models that are often used in a kind of financial calculation.

The idea of ​​other schools is that they are people, not models. Regardless of how sophisticated it is, the best information comes from business people. Therefore, it is aimed to involve business leaders beyond the budget process.

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Leverage!

In finance, leverage (sometimes referred to as gearing in the United Kingdom and Australia) are strategies involving the use of funds borrowed by purchasing assets, and after taxes the assets and borrowing costs are assets. Typically, funders limit the amount of risk you want to execute, limit the amount of leverage that is permitted, and require assets to be secured as collateral for the loan. For example, in the case of residential real estate, financial institutions can provide 80% of the market value of real estate. You can borrow 70% for commercial real estate and 60% for some acts for stocks. Leverage will double revenue and loss. On the other hand, there is a risk that stocks will lead to losses. It seems that the financial cost exceeds the revenue from the asset or the value of the asset is declining.

Source!

Lifting can occur in many situations such as:

• Individuals use savings when they purchase a house by financing a part of the purchase price of the mortgage.

• Individuals lend brokerage fees and provide exposure to financial investment.

• Securities such as options and futures are transfers between borrowed parties whose principal was explicitly borrowed at a very low interest rate from the T account [2]

• The business owner lends a part of necessary financing to the company and uses the investment. The more people will lend, the less necessary justice, the less profitable and the loss, the more expanding in proportion to the higher foundation. 

• Enterprises shift activities with a fixed input cost when revenue needs to fluctuate. An increase in revenue results in a significant increase in revenues.

• Leveraged funds may tax assets by procuring a portion of the portfolio with short-term cash flows from other positions.

• EBIT means profit before interest and tax.

• DOL is the level of functional consumption

• LDF is the level of finance activity

• DCL is the level of interoperability

• RO returns to court

• ROA is an asset

Risk!

If the return on the asset exceeds the loan amount, the income increases, so stocks may increase losses. Companies that lend too much money may bankrupt or collapse with business ventures, but small businesses can survive. Investors who buy shares at a margin of 50% suffer a loss of 40% when stocks decline by 20%.

This risk may be due to the loss of the amount of guaranteed assets. The broker needs to add funds when the amount of securities declines. If the real estate amount is the subject of the loan, the bank can not change the mortgage. Cash flow and income are sufficient to maintain ongoing borrowing costs, but loans may be necessary.

This can occur exactly if there is a small liquid market and the price of other people 's sale is a depressed price. This means that if the bad things go wrong, the increase will increase, the loss will increase while things are over. This can quickly worsen even if the decline in asset returns is low or temporary.  Risk can be mitigated by organizing the rules of behavior, storing unused coins for additional loans, and lifting only liquid liquids.

On the other hand, extreme level behavior of Forex trading is relatively low risk per unit because of the relative stability compared to other markets. Compared to other trading markets, foreign exchange traders need to exchange more units of units to obtain real benefits. For example, many brokers can use 100: 1 investors. In other words, people who manage $ 1,000 can manage $ 100,000

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Issued Share Capital!

The share capital that has been issued to shareholders. This is a part of the company's authorized capital (the maximum amount of capital that can issue legal conditions). The part not yet issued is called free capital. 

Total number of shares held by shareholders. The company can grant new shares to all approved shares of the stock at any time. Register capital is also registered, registered capital is also registered. 

The shares will only share the amount that shares the company's shares actually offering investors. The share of the common stock is generally equal to the amount of the subscribed capital, but it is not worth more than the approved amount. 

Amount of eligible share capital provided by joint holding company to increase capital. This amount is disclosed in our balance sheet. 

Issued share capital shows the initial investment made by the company's shareholders, but this investment often increases when profits are retained in the company and are added to RESERVES rather than being distributed as dividends. Since the market value depends on the price currently being sold at STOCK MARKET.

Amount of eligible share capital provided by joint holding company to increase capital. If an entity shares shares under terms of payment, the amount of payment capital may be less than that of short-term stock. See SHARE-EXPENSES. 

Issued share capital is the amount of the nominal value of shares owned by shareholders. This is the nominal number of shares issued to shareholders. The share capital and the issuing premium provided represent the amount invested by the company's shareholders. It is also called stock capital or registered stock of shares (US distribution capital). 

Capital (shared capital) is comprised of shareholders' equity and is growing. Shares redeemed or repurchased by the Company for holding in consolidated revenue funds do not form part of share capital. 

Previously , issued capital comprised common equity shares as well as all preferred shares However, when sharing a shared share, only the appropriate items are displayed. 

Issued capital consists of shares sold to shareholders in cash or other considerations. For example, if a company sells 100,000 shares with a face value of $ 1 per share, the company gives the share capital of $ 100,000. 

The issued share capital may change. Some companies offer new stocks to existing shareholders or new shareholders. Additional shares will increase the amount of stock. Some companies even even sell their shares. This will reduce the amount of issued shares capital. 

We must assume that a given issued share capital is not affected by market prices. The amount of capital stated in the financial statements is the only number of shares calculated as multiplied by the nominal value of each party. In the case that the Company provides 100,000 shares at a par value of 1 dollar per share, each party's market value is 2 dollars and the share capital is $ 100,000 ($ 200,000). 

The issued share capital may differ from authorized shares of stock. Approved share capital is the highest capital that companies can issue to shareholders. The issued capital may be smaller than the authorized capital but can not exceed it.

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Authorized Share Capital!

Authorized share capital is the number of shares that may be issued in the article of the company or company organization stated in the memorandum of establishment. Authorized share  capital is often insufficiently used by management to create space for the issuance of additional inventories in the future if companies need to quickly acquire capital. Another reason to manage the shares of the Treasury's company is to maintain the company's majority shares.

The authorized  capital share of a corporation (capital, capital, nominal capital, sometimes also called capital in the United States) is the maximum capital that corporations are authorized to issue by statutory documents) to shareholders. Some of the permitted capital remains (and periodically) unrecognized. Approved capital can be reconsidered by approval of shareholders. The portion of approved capital issued to shareholders is called the company's share capital.

We permitted the capital of the shares to change the ability of the directors to limit the issuance of new shares or to affect the management of the company or to change the control among shareholders. The issuance of shares to new shareholders may change the balance of income distribution, for example, when new shares are allocated not by market value but by nominal value.

It is essential for companies to withdraw legitimate capital from Australia in 2001 and to abolish it under the Companies Act 2006.

According to the court, approved authorized share capital is also called "permitted stock", "permitted stock" or "stock of permitted stock". For a complete understanding, the approved share of capital should be reflected in the context related to compensation payment, subscription capital and capitalized capital. Even if all these words are related, they are not synonyms.

Authorized share capital is the broadest term used to describe corporate capital. It consists of one part of each category that you can publish business as needed or as needed. Later share capital represents a portion of approved capital that a potential shareholder has agreed to purchase from the company's Treasury. Paid-in capital is part of the share capital that we receive payment of subscribers. Finally, the given capital is the share that the company really gives to shareholders.

For example, a corporation may have $ 1 million common stock with a value of $ 1 and a total capital of $ 1 million. However, actual given capital is only 100 thousand shares and we can use 900 thousand for the company's finances due to future problems.

In the case of startups, the authorized capital may be very high, but the actual capital is low to enable financial support of the treasurer.

The listed company shares common stock (common stock) and shares listed by offering preferred stock (capital stock).

The approved capital of the company is the maximum amount of securities limited to shareholders by a limited liability company. The capital paid is the nominal capital amount shared by shareholders.

 Calculation:

Authorized capital = Number of shares approved * Nominal value

 Example:

For example, assuming that a company owns 50,00,000 rupees of authorized capital, you can issue shares of 50,00,000 rupiah to shareholders and you can not outsource external items. However, if we are offering 25,000,000 rupees of shares, the remaining capital will be held as unused capital and we can use it at any time.

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Working Capital!

Working capital is a measure of business efficiency and its short-term financial soundness. Employment capital is calculated as follows.

Working Capital = current assets - current liabilities

The working capital ratio indicates whether there are enough short-term assets to cover short-term borrowings. All less than 1 indicate negative W / C (working capital). Those exceeding 2 mean that the company does not invest any excess assets. Most people think that a ratio between 1.2 and 2.0 is sufficient. It is also called "net working capital".

Working capital (WC) is a financial indicator that represents the liquidity available to a company, organization, or other entity, including government agencies. In addition to tangible fixed assets, ,working capital is considered part of working capital. Total working capital equals current assets. Working capital is calculated as current assets less current liabilities. If current assets are smaller than current liabilities, the project is called lack of working capital, lack of working capital.

Companies may have assets and profitability, but liquidity will be insufficient unless assets can easily be converted into cash. Working capital is necessary to ensure that you have sufficient funds to meet both short-term borrowings and future operating expenses. Working capital management is management of inventory, receipts, accruals and cash.

If the current assets of the business do not exceed the current liabilities, there is a possibility that it will be terminated in a short period of time. The worst situation is bankruptcy. A decline in the working capital ratio over a long period may be a red flag that may be a better test. For example, the number of sales companies may decline, and as a result, accounts receivable may decrease or decrease. The acquisition of capital also informs investors of the operational effectiveness of the underlying business. The amount related to the stock or money that the customer pays to the company can not be used to repay the company's obligation. Therefore, if an enterprise does not operate with the most efficient way (slow recovery), it will occur as an increase in working capital. It can be seen by comparing the working capital from time to time. Late collection may indicate problems around the operation of the project.

Things to keep in mind:

• If the ratio is less than 1, it has negative working capital.
• A high working capital ratio is not necessarily a good thing. It may indicate that there are too many shares or not investing surplus cash.

What is "Working Capital Management"?

Working Capital management refers to a corporate management strategy designed to track and utilize the two parts of working capital, short-term assets and current liabilities and is most effective for companies that guarantee financial transactions. The primary objective of working capital management is to continue to ensure sufficient cash flow for the Company to cover short-term operating expenses and short-term obligations.

 Management of capital operations is generally an income ratio consisting of monitoring cash flows, assets and liabilities, based on analysis of the ratio of key operating cost items including working capital ratio, relief rate and relief rate. Effective management of working capital helps smooth the company's financial management and it also helps improve profitability and profitability. Working capital management includes inventory management, accounts receivable management and accounts receivable management.

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Drawing Account!

Drawing accounts are accounting records used to track funds withdrawn by employers. Drawer accounts are mainly used for businesses that are taxed as the sole owner or partnership. Exclusive remuneration for an entity that is taxed as a separate entity should generally be provided as a reward or dividend.

The drawing account is a capital account. However, by reducing the amount of the owner's refund account, the debit balance is forecast in the account number. Debit and credit are included in each deal and the cash withdrawal requires a cash account credit, so the invoice must have the same amount of debit. On the other hand, the owner's primary capital account requires a credit balance.

Drawing accounts are accounting records used in businesses organized as standalone owners or partnerships and list all the benefits for business owners. These are actually signs of funds from companies (so name). Taxes on these withdrawals are paid by individual partners, so there is no tax effect related to withdrawal from business prospects.

The standard accounting transactions displayed in the drawing account are cash account and debiting account debit. The withdrawal account is a stock account. This means that withdrawing the account is a counter-commodity account, resulting in a decrease in total capital in the business. Therefore, reducing the budget deficit reduces the asset's outstanding balance and at the same time reduces the capital aspect.

Creating an account is not a cost, but rather a reduction in business participation. Account withdrawal is aimed at evaluating the profit to the owner within one year. After that, it is closed (by credit) and the balance is transferred to the owner's stock account. Next, we will consider the allocation in the future using the drawings of the accounts of the following year. This means that the drawing of the account is a temporary account, not a permanent account.

You can create a drawing account calendar containing a summary of the benefits and details paid to each trading partner and make final payment at the end of the year and each part follows the terms of the correct partnership agreement, It is important if there is a risk of misunderstanding about the amount of funds to be distributed to.

Companies that are organized as companies are redeemed by salary or dividend, so accounts are not used. In the corporate environment, you can also pay to the owner by resetting shares in cash transactions. However, if only the shareholder who purchased shares again, the relative ownership ratio will also decline. If all stockholders' shares are repurchased under equal terms, there will be no impact on the family property post.

Example of drawing out an account:

The ABC partnership distribution provided $ 5,000 per month for each of the two partners and signed the deal with a $ 10,000 cash account and a $ 10,000 debit account. By the end of the year, this took out a total of $ 120,000 from the partnership. The accountant transfers this balance to the capital account and posts a $ 120,000 debt to the $ 120,000 credit account and the capital account.

Record transaction in Drawing Account:

Normally, the transactions displayed in the drawing account are credit with cash and withdrawal account debit. Withdrawing an account will reduce participation in the company. Since the withdrawal account provides the owner of the distributor within a year, the account is closed with credits and the balance is transferred to the capital account of the owner of the account. It is scheduled to be used for pickup for the distribution of next year's baptism. Because leaving tax is paid by individual partner, there is no tax effect related to company withdrawal funds.

To create a calendar from a drawing account, display details and summary of distribution with each business partner. Proper final payment can be made at the end of the year, ensuring that each partner receives the appropriate part of the company's income according to the partnership agreement.

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