7 Factors Affecting the Working Capital

Factors Affecting the Working Capital In addition to the working parameters peculiar to a company that determines the quantum of required working capital, the following factors affecting the working capital are also equally important: Profit Levels A company earning huge amounts of profits can add to the working capital pool a larger quantum of funds. … Read more

6 Sources of Risk

Risk in Finance Risk and return go hand in hand in investments and finance. One cannot talk about returns without talking about risk, because, investment decisions always involve a trade-off between risk and return. Risk can be defined as the chance that the actual outcome of an investment will differ from the expected return. This … Read more

8 Factors Affecting Dividend Policies and Relevance Theories

Relevance of Dividend Theories Because empirical tests (real-world tests) of the above three theories have been inconclusive, academicians cannot tell corporate managers with any degree of precision how a change in dividend policy will affect stock prices and capital costs. Thus, actually determining the optimal dividend policy is extremely difficult. Dividend policy should also reflect … Read more

3 Major Financial Decisions

Financial Decisions There are three broad areas of financial decision making viz, Capital budgeting, capital structure, and working capital management: Capital Budgeting The first and perhaps the most important decision that any firm has to make is to define the business or businesses that it wants to be. This is referred to as strategic planning … Read more

8 Objectives of Financial Management: Meaning, Definitions, Nature, Functions

Meaning of Financial Management The term financial management can be defined as the management of flow of funds and it deals with financial decision-making. It encompasses the procurement of funds in the most economical and prudent manner and the employment of these funds in the most optimum way to maximize the return for the owner. … Read more

Asset Liability Management ALM: Principles, Process, Tools

What is Asset Liability Management? Asset Liability Management is the ongoing process of formulating, implementing, monitoring, and revising strategies related to assets and liabilities to achieve financial objectives, for a given set of risk tolerances and constraints. Asset Liability Management (ALM) is a part of the overall risk management system in the banks. It is … Read more

Risk Management in Banks: Types, Credit Risk Tools

What is Risk in Banks? The word “Risk” has been derived from the Latin word Rescum. Risk is the potentiality that both the expected and unexpected events may have an adverse impact on the bank‘s capital or earnings. Risk arises due to uncertainty or unpredictability of the future due to changes in internal and external … Read more

WTO: Meaning, Objectives, Advantages and Disadvantages

What is WTO? After the Second World War, many countries planned down to be together to work on ways and means to promote international trade. The result was the signing of (the GATT) General Agreement on Tariffs and Trade by 23 countries in 1947. India was one of the founding members of GATT. GATT was … Read more

EXIM Policy: 1997 to 2002 and 2002 to 2007

What is EXIM Policy? In India, economic reforms took place in 1991 with the introduction of the LPG (Liberalization, Privatization, and Globalization) Policy. In order to liberalize imports and boost exports, the Government of India for the first time introduced the Indian EXIM Policy on April I, 1992. In order to bring stability and continuity, … Read more

International Trade: Features, Importance, Advantages, and Disadvantages

What is International Trade? External trade is also called International Trade. It implies buying and selling of goods or services between two or more countries. For instance, If Mr. A who is a trader from Delhi, sells his goods to Mr. B another trader from China then this is an example of foreign trade or … Read more