Financial Management
A firm has transaction exposure whenever it has contractual cash flows (receivables and payables) whose values are subject to unanticipated changes in exchange rates due to a contract being denominated in a foreign currency. To realize the domestic value of its foreign-denominated cash flows, the firm must exchange foreign currency for domestic currency. As firms negotiate contracts with set prices
Continue reading Foreign exchange risk (also known as FX risk, exchange rate risk or currency risk) is a financial risk that exists when a financial transaction is denominated in a currency other than that of the base currency of the company. Foreign exchange risk also exists when the foreign subsidiary of a firm maintains financial statements in a currency other than the
Continue reading Financial management can be defined as the management of the finances of an organisation in order to achieve the financial objectives of the organisation. The usual assumption in financial management for the private sector is that the objective of the company is to maximise shareholders’ wealth. Financial targets may include targets for: earnings; earnings per share; dividend per share; gearing
Continue reading CAPITAL STRUCTURE AND FINANCE COSTS (F3): LEARNING OBJECTIVES I.THE CAPITAL STRUCTURE OF A LIMITED LIABILITY COMPANY II.ORDINARY SHARE CAPITAL III.RIGHTS ISSUES IV.BONUS ISSUES V. DIVIDENDS VI. LOAN NOTES ( LOAN STOCK) VII. PREFERENCE SHARES VIII. OTHER RESERVES IX. INCOME TAX ……………………………………………… I. THE CAPITAL STRUCTURE OF A LIMITED LIABILITY COMPANY Finance is provided by the capital invested in the business.
Continue reading In finance, the net present value (NPV) or net present worth (NPW) is a measurement of the profitability of an undertaking that is calculated by subtracting the present values (PV) of cash outflows (including initial cost) from the present values of cash inflows over a period of time. Incoming and outgoing cash flows can also be described as benefit and
Continue reading Financial management refers to the efficient and effective management of money (funds) in such a manner as to accomplish the objectives of the organization. It is the specialized function directly associated with the top management. The significance of this function is not seen in the ‘Line’ but also in the capacity of ‘Staff’ in overall of a company. It has
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