The primary limitation of financial statements is its heavy reliance on historical costs, indifference to inflation, prone to frauds, easily manipulated, etc. Financial statement limitations are relatable with current …
What is Secured Loan? Secured loans are defined as loans where the lender extends loans only against deposition of some asset as security. Assets could be any asset ranging …
Value of a Firm – Definition A firm’s value, also known as Firm Value (FV), Enterprise Value (EV) is an economic concept that reflects the value of a business. …
What is Working Capital Management? Working Capital Management is a strategy framed and adopted by business managers to monitor working capital (working capital means current assets and current liabilities) …
Meaning of Agency Theory Agency theory examines the relationship between the agents and principals in the business. In an agency relationship, two parties exist – the agent and principal, …
What is Debt Financing? Debt financing is a means of borrowing money from retail or institutional investors. Such funds are raised through the issue of bonds, bills or securities …
Why are Loans Important? Any business will require a reliable stream of funds to operate profitably. More often than not, relying only on retained earnings and profits for furthering …
What is Long Term Finance? The funds which are not paid back within a period of less than a year are referred to as long term finance. Certain long …
Equity financing refers to raising capital by giving away some “ownership” of the company. The firms generally raise equity finance by selling the common stock of the company to …
Equity Valuation – Meaning Equity valuation is a process of determining the fair market value of an equity security. There are many methods of equity valuation mainly categorized in …
