Capital structure decisions are very important for companies to make. But there are always some other factors which firms take into consideration while making capital structure decisions. These factors are given below: Sales Stability:…
For the establishment of a target capital structure, the firm analyzes certain factors such as; mix of debt, preferred stock and common equity. The specific capital structure changes according to the conditions. The change in…
Calculation of annuities is an important topic of basic finance and requires simple calculation to find the present or future value of any amount. one can value an annuity with two ways. It is therefore…
Any decision maker or analyst should first understand the unique characteristics and environment of the respective industry in which it functions. For example manufacturing or wholesalers tend to have lower current ratio than retailers. The…
The current ratio measurement tells us about the ability of the company’s short term debt paying. This ratio is computed by dividing total current assets by total current liabilities. Current ratio shows whether the current…
Working capital is an important financial measurement used to analyze the financial position or strength of the company. Working capital is mostly used to find out the relationship between current liabilities and current assets. Actually,…
Amount today is worth more than amount tomorrow. In many cases it becomes important to know the present value of accumulated return of an investment. This gives a clear idea to the investors about the…
The basic difference between simple and compound interest is that the simple interest is only calculated on the principal amount and does not contain the accumulated interest from prior periods. On the other hand compound…
Future value of multiple cash flows can be calculated with the help of a simple problem. Usually people plan to save some amount each year for the purpose of meeting future needs and requirements. Suppose,…
“The new paradigm for financial markets: the crash of 2008 and what it means” is one of the latest books of George Soros. He has written eight other books on various subjects related to the…
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