The Sinking Fund Method of Depreciation is a contingency fund which assures the availability of funds for asset replacement upon completing its useful life. It is also known by a variety of names like: Depreciation Fund Method Amortisation Fund Method Every fixed asset has a specific useful life, after which it needs replacement. With each passing year, the … [Read more...] about Sinking Fund Method
Reverse Stock Split
Definition: Reverse Stock Split merges companies' stocks into fewer units in the Financial Market. It is the complete converse of the Stock Split. Moreover, it is the company's strategic decision to convert the number of existing shares to fewer yet more valuable ones. The split takes place based on a predetermined ratio. It is also known as Stock Consolidation, Share … [Read more...] about Reverse Stock Split
Meta Market
Definition: Meta Market is a customer-centric virtual market that offers closely related products or services belonging to the same industry or diverse set of industries. It strives to cater for the similar needs of diversified customers under one roof. Moreover, we can understand it as a platform that develops and maintains exchange relationships. These relationships exist … [Read more...] about Meta Market
Types of Logistics
Do you know the majority misinterprets logistics with transportation? Besides being the backbone of logistics, transportation is just a part of it. Logistics has a significantly wide scope. In this post, we will discuss various types of logistics available at our disposal. Logistics is the integration of several activities. These activities are not universal but … [Read more...] about Types of Logistics
Make or Buy Decision
Definition: Make or Buy Decision is a tactical decision-making technique wherein the business concerns choose between – Inhouse Manufacturing and Subcontracting. It is popularly known as the 'Outsourcing Decision'. In the key phrase, 'Make' signifies carrying out production within the firm. Whereas 'Buy' refers to outsourcing the complete product or its … [Read more...] about Make or Buy Decision
Valuation of Goodwill
Valuation of Goodwill is estimating the company's monetary worth besides its asset built over the years by exceptional business practices or dedicated efforts towards customers. But, you might be thinking that why is goodwill valuation necessary? Despite being an intangible asset, we can trade goodwill. But one can only realize it through sale/purchase considerations … [Read more...] about Valuation of Goodwill
Statement of Affairs
Definition: A Statement of Affairs is a financial statement that summarizes the position of assets and liabilities to ascertain the profit or loss for the financial year under the Single Entry System. It is also known as the 'Capital Comparison' or 'Net Worth Method'. Moreover, this statement is used to calculate the Opening and Closing Capital. For this, we prepare the … [Read more...] about Statement of Affairs
Multinational Capital Budgeting
Definition: Multinational Capital Budgeting (MCB) is the decision-making process wherein financial managers evaluate long-term projects based on foreign lands worthy of investment. Multinational companies (MNCs) aspire to invest outside their geographical boundaries. This is because they want to make the best use of their valuable resources. If we split the keyphrase, … [Read more...] about Multinational Capital Budgeting
Capacity Planning
Definition: Capacity Planning is a systematic approach to determine the production capacity required to satisfy current and future business requirements. In operations management, it deals with the planning and control of capacity in production units. The production process is made up of several components that possess some kind of capacity. Thus, organizations strategically … [Read more...] about Capacity Planning
How to calculate Goodwill?
Goodwill is that segment of the total purchase consideration that is left after evaluating the fair value of assets. However, the determination of the price or value of goodwill is quite challenging. This is because it deals with the intangible components. The simplest way to calculate goodwill is to estimate the business's overall value. Besides this, there are some … [Read more...] about How to calculate Goodwill?