Definition: Money Market acts as an essential part of economic development. It is concerned with that portion of the financial system where trading of the short-term fund is done for a period of less than 1 year. It is a product of the capital market, which is treated as a channel of short-term debt capital. Although it is undoubtedly distant from the capital market, money … [Read more...] about Money Market
Finance
Shares
Definition: Shares are the smallest unit of the company's capital or can be said as a unit of equity. The holder of such shares in a company is known as "Shareholders" (the owners of the company). These shares can be issued to the public for raising the funds of the company for its expansion. The market used for trading of shares is known as “Share Market” which deals in … [Read more...] about Shares
Lease
Definition: A lease is a legal agreement amongst two parties known as lessor (owner) and a lessee (occupant). Lessor grants a temporary possession to the lessee to use his/her property or asset such as land and building against some monetary compensation for a certain period as mentioned in an agreement of lease. Lease facility is generally used by the entities who want an … [Read more...] about Lease
Debentures
Definition: Debentures are the certificate or the creditorship securities issued by the company to the public when there is a need of capital for expansion and development, but the company don’t want to uplift their share capital. They are the liability of the company which has to be repaid in a specific time period; however, a feasible alternative of term loans for … [Read more...] about Debentures
Net Present Value (NPV)
Definition: The Net Present Value (NPV) is a means of evaluating the actual long-term profitability of an investment or a project through the initial outflow, future cash flows and time value of money. Also known as the discounted cash flow method, it backs the capital budgeting decisions of a company. It is an effective means of forecasting the future outcome of a … [Read more...] about Net Present Value (NPV)
Tax Holiday
Definition: Tax holiday refers to the temporary period when the government reduces or provides complete relaxation on tax payable on a specific range of products, income or property. It generally lasts for a day, or two days or a week. Some of the most prominent kinds of taxes included under this holiday initiative are sales tax, property tax, income tax and GST (Goods and … [Read more...] about Tax Holiday
Decision Tree Analysis
Definition: Decision tree analysis is a powerful decision-making tool which initiates a structured nonparametric approach for problem-solving. It facilitates the evaluation and comparison of the various options and their results, as shown in a decision tree. It helps to choose the most competitive alternative. It is a widely used technique for taking crucial decisions like … [Read more...] about Decision Tree Analysis
Corporate Spinoff
Definition: Corporate spinoff refers to the dissolution of a subsidiary business entity from its parent company to form a new though smaller independent organization. The subsidiary company's shares are majorly allotted to the existing shareholders', as per their holding (pro-rata basis) in the parent company. The new entity so formed has an individual identity and acquires … [Read more...] about Corporate Spinoff
Dividend Policy
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
How to Calculate Break-Even Point?
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?