Any type of business or occupation requires money at every stages of its operation. Whether it is a small business or large, manufacturing or trading or transportation business, money is an essential requirement for every activity. Money required for carrying out business activities is called business finance. Finance is needed to establish a business, to run it, to […]
Every Company makes investment in fixed and current assets. Fixed assets like e.g., plant and machinery, land and building, vehicles, etc, remains in the business for more than one year. On the other hand, Current assets like inventories, debtors, bills receivables, etc. get converted into cash or cash equivalents within one year. Some part of these, current assets
One of the important decisions under financial management relates to the financing pattern or the proportion of the use of different sources in raising funds. Most companies plan to raise funds for their capital needs using a judicious mix between owners funds (equity) and borrowed funds (debt). This mix of equity and debt actually used by a
Making decisions has been identified as one of the primary responsibilities of any manager. Decisions may involve allocating resources, appointing people, investing capital or introducing new products. Decision-making is at the core of all planned activities. Decision-making is a process of selection from a set of alternative courses of action which is thought to fulfill
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The cost of capital is the cost of a company’s funds (both debt and equity). In words of Solomon Erza “The cost of capital is the minimum required rate of earnings or the cut-off rate of expenditure”. From Investor’s point of view, it is the rate of return, that must be received by the firm on its investment projects, to attract
