Finance

Definition: A dividend policy can be defined as the dividend distribution guidelines provided by the board of directors of a company. It sets the parameter for delivering returns to the equity shareholders, on the capital invested by them in the business. While taking such decisions, the company has to maintain a proper balance between its debt and equity … [Read more...] about Dividend Policy

Definition: A break-even point is that position where a business entity can recover its cost through the revenue it generates from the sales. Here, we can say that the company is now able to meet its expenses through its sales revenue. Break-even analysis is the means to identify the effect of variation in sales volume on the cost, revenue and profitability of a project or a … [Read more...] about How to Calculate Break-Even Point?

Definition: Break-even analysis is a tool used by the business organizations to find out the minimum number of units it needs to sell or the amount of sales revenue it has to generate for meeting up the total cost incurred. It is the initial judgement on whether the project is viable or not. Break-even analysis is an essential tool for any business. All the initial decisions … [Read more...] about Break-Even Analysis

Definition: A financial market is a marketplace where trading or exchange of various financial instruments and assets takes place. The price of these assets is dependant on its demand and supply in the respective market. All the financial and economic activities in a country are dependent upon these markets Example The most common financial market is Real Estate … [Read more...] about Financial Market

Definition: Capital budgeting is the method of determining and estimating the potential of long-term investment options involving enormous capital expenditure. It is all about the company's strategic decision making, which acts as a milestone in the business. For Example; Let us now consider capital budgeting for buying a new printing machine by a publishing house. The … [Read more...] about Capital Budgeting

Definition: The foreign exchange market or the 'forex market', is a system which establishes an international network allowing the buyers and sellers to carry out trade or exchange of currencies of different countries. A forex market can be stated as one of the most liquid financial markets which facilitate 'over-the-counter' exchange of currencies. In New York, advanced … [Read more...] about Foreign Exchange Market

Definition: Stock split is a corporate strategy to divide each share of the company into a particular number of shares by reducing the share price proportionately without changing the market capitalization or company's net worth. It is usually done when the share prices become too high, restricting the small investors from investing in these stocks. A stock split is a … [Read more...] about Stock Split

Definition: Capital structure refers to an arrangement of the different components of business funds, i.e. shareholder's funds and borrowed funds in proper proportion. A business organization utilizes the funds for meeting the everyday expenses and also for budgeting high-end future projects. Computation of capital structure involves a lot of analytical thinking and … [Read more...] about Capital Structure

Definition: Capital asset pricing model (CAPM) is a tool used by investors, financial analysts and economists to study the relationship between the expected return from the investment and the systematic risk involved (measured in terms of Beta coefficient), by taking into consideration the expected overall market return and the risk-free rate of interest. Whenever an … [Read more...] about Capital Asset Pricing Model (CAPM)

Definition: Cash Management refers to the collection, handling, control and investment of the organizational cash and cash equivalents, to ensure optimum utilization of the firm's liquid resources. Money is the lifeline of the business, and therefore it is essential to maintain a sound cash flow position in the organization. Receivables Cash Management Any amount which the … [Read more...] about Cash Management