Articles on Finance

Equity Valuation: Definition, Importance and Process

Throughout finance, one rule always holds true. The general belief is that the value of any asset or security is...

Introduction to Finance in Sports Management

The business of sports is one of the largest businesses in the world today. Across the world, there is a...

Financial Management: Meaning, Scope, Objectives & Functions

Meaning of Financial Management Financial Management means planning, organizing, directing and controlling the financial activities such as procurement and utilization...

What is Financial Modelling?

Planning is the cornerstone around which business empires are built. Businesses which survive and thrive in the long run are...

Financial Trends in The Retail Industry

The retail industry has already been undergoing a massive change since a long period of time. This industry has seen...

What are Fixed Income Securities?

Fixed income securities used to be a relatively obscure part of the financial markets. Up until the late 1970s, bond...

Introduction to Forex Markets

The term “Forex market” is used very frequently in the media as well as in day to day life. It...

History of Corporate Taxation

In 2019, President Donald Trump created outrage when he decided to lower the tax rates of corporations. Donald Trump was...

History of Modern Banking

Banking in old times was not the tightly monitored and tightly regulated business that it is today. Instead, earlier banking...

Infrastructure Finance: An Introduction

Traditional economists are of the opinion that infrastructure is the heart of the economy. Empirical data clearly shows that given...

Introduction to Financial Markets and Institutions

There are certain types of financial markets and financial institutions that are found in almost every country in the world....

What is Investment Banking?

The topic of investment banking is fascinating. This is because some of the biggest banks in the world i.e., Barclays,...

What is Job Order Costing?

In earlier time, prices used to be driven by costs. This meant that the firms would consider the amount of...

Money Market – Definition, Participants and its Types

Retail investors across the world do not have a high level of knowledge when it comes to money markets. This...

Why are Pension Funds Important?

Individual investors are well aware of the existence of pension funds. Retail investors who earn their income in the form...

The Importance of Personal Finance

There is no shortage of education in the field of finance. There are various academicians who work tirelessly in the...

Portfolio Management – Meaning and Important Concepts

It is essential for individuals to invest wisely for the rainy days and to make their future secure. What is...

What is Ratio Analysis ?

Ratio analysis is one of the oldest methods of financial statements analysis. It was developed by banks and other lenders...

Seed Funding – Introduction

Creating a successful startup business can be a daunting task. This is because a startup business needs a viable idea...

The Stages of Descent into Bankruptcy

Bankruptcy is a common phenomenon in the business world. There have been many cases wherein the stalwarts of yesterday, the...

Strategic Financial Management – Meaning and Its Functions

The study of financial management is imperative for anyone trying to make a career in the industry. However, traditional financial...

What Are Derivatives ?

If you are connected to any kind of financial market or watch the financial news even for 5 minutes every...

What is Accounting? – Meaning and Important Concepts

Accounting has been hailed by many as the “language of business”. There are many quotations like “A pen is mightier...

What is Commercial Banking?

The banking industry is a highly specialized field. To the layman, it may appear like all banks perform the same...

Behavioral Finance – An Introduction

As investors, we are often perplexed by the behavior of the markets. For instance, we may find a stock to...

Introduction to Commodities Investing

Ever since the beginning of history, humans have been using commodities. This has created a necessity to trade commodities. However,...

What is Corporate Finance? – Meaning and Important Concepts

Corporate finance is one of the most important subjects in the financial domain. It is deep rooted in our daily...

Cryptocurrencies: A Primer

Cryptocurrencies have taken the world by storm. In the past few years, the cryptocurrency market has transformed into a mainstream...

Different Asset Classes in which Pension Funds can Invest

Pension funds have a very large amount of money at their disposal. However, that does not mean that the management...

Financial Investment – Meaning, its Need and Different Types of Investments

It is human nature to plan for rainy days. An individual must plan and keep aside some amount of money...

Financial Planning – Definition, Objectives and Importance

Definition of Financial Planning Financial Planning is the process of estimating the capital required and determining it’s competition. It is...

The Functions of a Financial System

Financial resources are scattered across the economy. This is the reason that there is a need for a financial system...

Heuristics and their role in Finance

Traditional financial theories assume that finance is a scientific field. This means that just like in a scientific problem, a...

History of the Forex Market: The Gold Standard

The word “money” has not always meant what it means today. Today when we use the word “money” we refer...

How to Invest In Commodities Markets

There is more than one entry route if one wants to gain an exposure in the commodities market. Positions can...

Infrastructure as an Asset Class

As asset class is a group of assets that have similar investment characteristics amongst themselves. At the same time, their...

Market Value, Intrinsic Value and Investment Value

Equity valuation or the valuation of any asset is an art. Valuation is not a perfect science and there is...

The Need for Derivatives

In the previous article, we discussed as to how derivatives contracts can be dangerous and can pose a systemic risk....

Nominal and Real Value of Money

The previous article was an introduction about the two basic decisions that corporate finance helps a corporation in making. Prima-facie,...

Objectives of Financial Modelling

Financial modeling enables key personnel to make better decisions. These models are used for various types of decision making. Hence,...

Process of Financial Planning

The financial goal of most people is to become wealthy. This is the reason why a lot of people are...

Types of Products Offered by Commercial Banks

In terms of products and service coverage, the commercial banking ecosystem is much larger than the retail banking ecosystem. Corporations...

Pros and Cons of Money Markets

We already know that money markets are amongst the biggest sectors within the fixed-income securities market. The money market is...

Techniques Used in Ratio Analysis

Ratio, as the name suggests, is nothing more than one number divided by the other. However, they become useful when...

Relationship Between Types of Costs and Inventory

The relationship between when cash is spent and when it is recognized as an expense is fairly complex in job...

Sports Management Companies: Sources of Financing

There are many sports management companies across the world that can be classified as large corporations. Many of these corporations...

Principles of Strategic Financial Management

The field of strategy is not an exact science. This is because strategies are made based on the assumptions that...

Types of Fixed Income Securities

When the term “fixed income securities” is mentioned, investors immediately conjure up images of bonds in their heads. However, this...

Why is it Difficult to Raise Seed Funding?

In the previous article, we have already learned what seed funding is and the various sources from which it can...

Why must corporations be taxed?

We live in a capitalist world today. This is the era of multinational corporations. Today, there are many companies that...

History of Accounting

One can never really understand a subject, unless they know where it came from. Therefore, a short history of the...

Advantages of Using Cryptocurrency

The popularity of cryptocurrency has exploded over the past few years. Statistics clearly suggest that cryptocurrencies are one of the...

Central Banking in the United States

The United States is economically the most powerful nation in the world today. This is what makes the study of...

Changing Cost Structure in the Retail Industry

The retail industry has undergone a lot of changes in the recent past. Each of these changes have been strategic...

The Components of an Investment Bank

As mentioned earlier, investment banks have been in operation for several years now. This is the reason why, for many...

The Conceptual View of Organizational Decline

The bankruptcy of an organization is the end result of many years of organizational decline. It is not an event...

Disadvantages of Using Cryptocurrencies

In the previous articles, we have read about the meteoric rise of cryptocurrencies. We know that investments in these currencies...

Documents Required for Startup Financing

Setting up a startup company can require a lot of paperwork. It is common for startup founders to spend a...

External Causes of Organization Decline

Many theorists believe that organizational decay is caused by external factors. In fact, some have gone far enough to suggest...

Finance Functions – Investment, Financial, Dividend and Liquidity Decisions

The following explanation will help in understanding each finance function in detail Investment Decision One of the most important finance...

The Financial Life Cycle

A lot of young people are not aware of what their financial goals ideally should be. Most of them fall...

What is a Financial Market

A market is a place where two parties are involved in transaction of goods and services in exchange of money....

Financial Systems and Economic Development

Financial institutions and markets are together called the financial system. This financial system is the backbone of the national economy....

Functions of a Central Bank

The modern banking system is two tiered. This means that at the bottom there are commercial banks i.e. the banks...

Two Fundamental Rules of Corporate Finance

Corporate finance is based on two fundamental rules. All tools and techniques of corporate finance are mere ways and means...

History of Derivatives

Derivatives may have found their way into the media in very recent times. However, they have been used by mankind...

How Corporate Taxes Impact Corporate Behaviour?

Corporate taxes form a significant portion of the expenses borne by multinational corporations. These corporations are almost obsessed with efficiency....

How do Investment Banks Make Money?

Investment banks perform a wide variety of activities. As we have explained in previous articles, the work performed by investment...

How Variable Lease Works in Retail?

Leasing has traditionally been one of the biggest expenses related to the retail industry. This expense is incurred by almost...

Infrastructure Finance Projects: Major Sources of Funding

It is a known fact that the world is in great need of infrastructure projects and, therefore, infrastructure finance. Developing...

Market-Based Vs Bank-Based Financial Systems

Commercial banks do make some money by providing services such as transaction processing and payroll processing to their clients. However,...

Steps to Create a Financial Model

Financial modeling is not a perfect science. In fact, it would be fair to say that financial modeling is part...

The Strategic Financial Planning Process

The strategic financial planning process is different in the sense that it combines the functions of strategy formulation as well...

Types of Costs to be Allocated in Job Order Costing

Companies incur a variety of costs in their day to day operation. These costs are very different from one another...

Types of Coupon Rates in Fixed Income Securities

Fixed income securities are important to investors’ portfolios since they provide regular income in the form of coupon payments. However,...

Importance of Different Ratios to Different User Groups

As we have seen earlier that there is a wide variety of financial ratios available. They fall into many categories...

What is Sports Franchising?

We all know that professional sports teams are run like a business across the globe. This means that these sports...

Why Managing Liquidity is Important for Pension Funds?

Pension funds have traditionally been viewed as long-term investors. They are an investment vehicle in which individuals invest over the...

Why to be Bullish on Commodities ?

Commodities are like stocks and other securities. There values could theoretically go up and down over the long term. Some...

Objectives of Accounting

Every activity that a business firm does must be done for a reason and accounting is no exception. Accounting helps...

Applications of Equity Valuation

“Valuation” or the process of assigning a fixed numerical value to the present and potential of a business is considered...

Advantages of Behavioral Finance

The problem with traditional financial theories is that they tend to operate in an ideal world! The underlying assumptions are...

Bretton Woods Agreement and Smithsonian Agreement

The transition of the world monetary system from gold standard to the modern Forex markets was anything but smooth. Governments...

Characteristics of Money Market

In the previous article, we have already learned that the money market is a market for assets that can act...

Financial Modelling Heuristics

A heuristic is a technological term for what is known as a “thumb rule” in common parlance. In the previous...

Functions of the Money Market

Money markets are large and liquid markets. They exist in almost every country which has a developed financial system. The...

How Co-Founders Split Their Equity?

Beginning a startup can be quite an overwhelming process. This is because of the fact that founders need to make...

How do Commercial Banks Help in Processing Payments?

Timely payments are very important to any corporation. Only if a corporation is able to keep its word and make...

Impact of Liquidity on Pension Funds

Liquidity management has become an important buzzword in the pension fund industry. This is because of the fact that recessions,...

Internal Causes of Organization Decline

External causes are considered to be the number one reason behind the organizational decline. However, they do not work in...

Is Corporate Tax Progressive?

Taxes can be classified based on which class of the population pays the most. The purpose of taxation is to...

Present Value and Future Value of Money

Value of Money Depends Upon Time In the previous article we learned about the concept of nominal and real values...

Limitations of Ratio Analysis

Ratio analysis, without a doubt, is amongst the most powerful tools of financial analysis. Any investor, who wants to be...

Regulatory Role Performed By the Central Bank

The two tiered system puts the central bank in control of the commercial banks. Therefore, the government authorities have delegated...

The Role of the Finance Function in Organizational Processes

The Finance Function and the Project Office Contemporary organizations need to practice cost control if they are to survive the...

The Role of Government in Financial Systems

In the previous articles, we have already established that the financial system of any country is the key to its...

Shares and Stock Market – An Overview

An organization in order to raise money divides its entire capital into small units of equal value. Each unit is...

Anatomy of a Sports League Franchise Agreement

We have already discussed that sports leagues across the world follow the franchise model. Franchising is at the core of...

Advantages of Strategic Financial Management

The field of strategic financial management has become increasingly popular in the past few years. This has been because of...

The 4 Basic Types of Derivatives

In the previous articles we discussed about what derivative contracts are and what are the uses of such contracts? However,...

Three Types of Income

Financial theorists and practitioners all seem to agree on one basic principle, i.e., diversification is the most important tool which...

Types of Investment Banks

The investment banking industry is often referred to as if it were homogenous. However, this is not true at all....

Five Reasons Which Make Cryptocurrency a Bad Investment

The incredible rise in the price of cryptocurrencies in the past few months has caught the interest of almost every...

Why Do Commodities Exchanges Exist ?

Modern commodity exchanges are huge financial markets. Their daily transaction volumes run into billions of dollars to say the least....

Why Doesn’t the Private Sector Invest In Infrastructure Projects?

As explained in the previous articles, the infrastructure sector is facing a significant funding gap. There is an urgent need...

Limitations of Accounting

Although accounting may be heralded as being the language of the business, it is definitely not error-free. This has been...

Advantages and Disadvantages of Currency Pegs

Advantages of Currency Pegs Currency pegs have become extremely popular in the post Bretton Woods monetary world. About one fourth...

Advantages and Disadvantages of Variable Lease

In the previous article, we have already seen what a variable lease is and how it is different from traditional...

Allocating Overheads in Job Order Costing

Tracking direct labor and materials that have been used in a job can be done with a fair degree of...

Assumptions Used In Equity Valuation

Equity valuation is about guessing what the value of an organization is expected to be a decade from now or...

Limitations of Behavioral Finance

The theory of behavioral finance has become exceedingly popular in the past few years. This is largely because of the...

Cash Flow Types in Fixed Income Securities

The first thing that any investor related to fixed income markets first notices about the market is the sheer variety...

Financial Modelling: Advantages and Limitations

Financial models are used by corporations almost every day. These models help while making several key strategic decisions. For instance,...

Fraud Prevention Using Positive Pay

As we have already seen in previous articles, corporations all over the world have started automating their payments. Unfortunately, a...

Green Pensions

The amount of money that is managed by pension funds is huge. Since pension funds have large amounts of money...

How Reserve Requirements Work ?

Reserve requirements are one of the most important features of modern central banking. We hear about reserve requirements almost every...

Important Regulations in Investment Banking

Most of the investment banks in existence today have been around for several decades. For much of this time, the...

Market Indicators For Commodities Investing

All kinds of investing is driven by market sentiment. These sentiments in turn are driven by certain market indicators. Investors...

Misconceptions about Personal Finance

The importance of financial planning at an individual and family level cannot be overstated. For years, people and even governments...

Net Present Value Calculations

The net present value (NPV) is the most important concept in corporate finance. It is on the basis of this...

Paper-Work in Job Order Costing

Quotation: The job begins with a quotation given to a client. For the client, all that matters in the quotation...

Predicting Bankruptcy in Organizations

Bankruptcy is a state in which firms are not able to meet their obligations to internal as well as external...

Proof of Concept

In the previous articles, we have already read about why entrepreneurs require seed funding and how they obtain this seed...

Qualitative Issues While Conducting Equity Valuation

Equity valuation focuses on estimating what the likelihood of the company being a successful enterprise in the future is. Now,...

Retail Companies and Lease Accounting

Retail companies have traditionally been one of the largest users of real estate in the world. It is common for...

Revenue Sharing in Sports Leagues

The economics of sports leagues is quite complicated. This is because of various factors. However, two of the most important...

The Rise of Flat Tax

Governments all over the world generally levy graduated taxes on their population. This means that as the income being taxed...

Risks Involved in Derivative Contracts

Derivatives are considered to be extremely risky. The market is divided in two fronts when it comes to the opinion...

Role of a Financial Manager

Financial activities of a firm is one of the most important and complex activities of a firm. Therefore in order...

The SPV Structure in Infrastructure Finance

The Special Purpose Vehicle (SPV) or Special Purpose Entity (SPE) is one of the most used tools in infrastructure financing....

Disadvantages of Strategic Financial Management

There is no philosophy in the management domain which has not been criticized. The strategic financial management philosophy is no...

Who Uses Accounting Data ?

Financial reporting is used by a wide variety of users for a wide variety of purposes. For this reason it...

What are Market Indices ?

Stock market indices are ubiquitous. People come across these indices almost every day. However, many are not aware about their...

FAQ’s About Behavioral Finance

Behavioral finance is a fairly recent phenomenon. The development of this branch of finance is not more than a few...

Link Between Blockchain and Cryptocurrency

When a new investor enters the world of cryptocurrency, they often use two terms mentioned together. These two terms are...

Bond Indentures and Covenants

When an investor thinks of bonds, they often think about the financial agreement between the investors and the borrowers. However,...

Capital Structure Ratios – Meaning and Importance

Capital structure ratios are very important to analyze the financial statements of any company for the following reasons: Same Business...

Commercial Paper: A Primer

In the previous articles, we have discussed that the money market has various sub-sections. One of the most important sub-markets...

Common Terminologies Used in Forex Markets

Financial markets have their own terminologies. The Forex market has a number of terms which it shares with other financial...

Comparing Different Financial Systems

Economists all over the world are of the opinion that markets are the best system for allocating scarce resources. However,...

Debt to Equity Ratio – Meaning, Assumptions and Interpretation

The debt to equity ratio is the most important of all capital adequacy ratios. It is seen by investors and...

Entity Concept in Financial Accounting

The entity concept is one of the central tenets of accounting. An understanding of the same is therefore of paramount...

Financing Needs of Infrastructure Projects at Different Stages

Infrastructure projects typically last for many years. It is not uncommon for these projects to last for decades. These long...

The Flow of Funds in a Financial System

The economy of any nation can be viewed from the point of view of fund flow. This is a unique...

Forex Trading vs. Regular Trading

Trading foreign exchange is markedly different from trading other financial assets in the market. There are certain unique features of...

Macro-Economic Factors and their Effect on Personal Finance

Personal finance is defined in such a way that it is supposed to be linked with the financial decisions of...

Impact of Rising Interest Rates on Retail Sector

The retail industry has been financially struggling for a significant amount of time now. This struggle has been exacerbated by...

Interbank Lending Markets and Repurchase Agreements

Banks have to lend money in accordance with the amount of reserves that they have on hand. However, there is...

Job Costing and Service Firms

Law Firms: Law firms all across the world practice job costing. Most law firms charge an hourly rate to their...

Minimum Viable Product

We have already learned about the technique of proof of concept in the previous article. However, proof of concept isn’t...

Pension Funds and Fiduciary Duty

Whenever investors pool their resources together in order to create a fund that then invests in other assets, the concept...

Profit Maximization vs. Wealth Maximization

When the management of companies is encouraged to change their paradigm from traditional finance to strategic finance, they notice a...

The Promise and Perils of High Frequency Trading or HFT

What is HFT or High Frequency Trading ? HFT or High Frequency Trading is a process where trading in equities,...

Proof of Work Mechanism in Cryptocurrency

Investors who are new to cryptocurrencies tend to find the entire ecosystem confusing and deceptive. When investors try to educate...

Prospect Theory

Prospect Theory is probably the most important piece of literature in behavioral finance. The conclusions made in prospect theory underlie...

Shortcomings of the Bankruptcy Prediction Models

In the previous article, we have studied how bankruptcy prediction models have come a long way. It is true that...

Types of Covenants

In the previous article, we had a closer look at the concept of covenants as well as indentures. However, we...

Intrinsic Value and Mispricing

The whole objective of equity valuation is to find mispriced securities. Investors can make abnormal profits when they find securities...

Understanding Tax Terminology: Tax Base

Many students often find tax policy confusing. This is probably because it uses complex terms. The tax base is one...

Why is Financial Modelling so Complex?

Finance itself is a complicated field. It is difficult to understand the nature of relationships between various financial variables which...

The Anatomy of Commodity Indices

Movements in the stock markets are easy to track. This is because instead of looking at the movements in the...

Asset-Backed Commercial Paper

In the previous articles, we have already read about commercial papers and why they are an important segment of the...

Capital Structure – Meaning and Factors Determining It

Meaning of Capital Structure Capital Structure is referred to as the ratio of different kinds of securities raised by a...

Check Printing and Mailing Services offered by Commercial Banks

Corporations all across the world make a wide variety of payments via checks. This includes statutory payments, payments to utility...

Issues in Revenue Sharing in Sports Leagues

A sports league becomes profitable when it is successfully run over many years. This means that almost all the teams...

Commonly Used Terms in Derivative Market

The derivative market can seem like a world unto itself. The market is so large and so different from the...

Compounding Intervals and Interest Rate

Theoretically there are two types of interest rates, simple and compounding. However, in finance the word interest usually refers to...

Conflict of Interest in Investment Banking

Investment banking institutions are engaged in multimillion-dollar transactions. This means that if an investment bank is perceived to be operating...

Debt Ratio – Formula, Meaning, Assumptions and Interpretation

The debt ratio is the second most important ratio when it comes to gauging the capital structure and solvency an...

Different Types of Contracts for Infrastructure Projects

Private-public partnerships are a common mechanism used while creating infrastructure projects. In general, a public-private partnership involves a joint venture...

Essential Vs Non-Essential Retail

The retail sector is often considered to be a part of a single industry that has similar characteristics. However, this...

Euro Commercial Paper

In the previous articles, we have already studied about regular commercial paper as well as asset-backed commercial paper. However, there...

Exchange Traded Derivatives

Now since we have a basic idea regarding what derivatives really are and the function that they perform, it time...

The Future of Financial Modelling

Financial modeling is an intensive technology process. This means that at the present moment also, financial models use the latest...

Going From Financial Goals to a Financial Plan

The process of financial planning is a bit more organized compared to the traditional saving and investing approach. During financial...

How Loss Aversion Affects Investment Decisions

Behavioral financial analysts have conducted a significant amount of research in order to understand how investors process loss. In the...

How Salary Caps Work in Sports Leagues?

It is common knowledge that sports leagues all over the world rake in billions of dollars when it comes to...

Mining Pools in Cryptocurrency

In the previous article, we have already learned about the “Proof of Work” mechanism which underpins Bitcoin and many other...

What Are Negative Interest Rates ?

The Bank of Japan has recently decided that it will cut its rate below the zero percent mark. Bank of...

Pension Funds and Taxation

With the passage of time, more and more pension funds are moving from a state-controlled pension fund regime to one...

Portfolio Management Models

Portfolio management refers to the art of managing various financial products and assets to help an individual earn maximum revenues...

Reverse Factoring – Meaning and its Benefits

The purpose of commercial banking is to help corporations meet their funding needs in a better manner. Commercial banks help...

Strategic Capital Budgeting

The capital budgeting process is at the heart of the financial decision-making which takes place in any organization. However, up...

Understanding the Trading Cycles in Forex Market

Trend Is Your Friend Forex trading systems are what we often call “reactive systems”. There are many factors at work,...

Different Types of Entities in a Business

Businesses may all look the same when you look at the building in which they operate, the employees they hire...

Types of Products in Commercial Banking

Commercial banking has traditionally been the backbone of banking. Banking was created to funnel idle resources in households to productive...

The Uglier Side of Fracking

The press releases by the United States oil companies will have you believe that fracking is the best thing that...

What is Prototyping?

In the previous articles, we have already studied about the proof of concept as well as the minimum viable product...

Understanding Tax Terminology: Tax Rates

In the previous article, we discussed about how tax base calculations work. However, tax base calculations are just one part...

Advantages of Job order Costing

Possible To Appraise The Job: Job order costing is the only way that companies can appraise the jobs that they...

Bankruptcy as a Strategy – Part 1

When the word bankruptcy is used, the immediate image conjured is that of a company that is trying hard to...

Capitalization in Finance

What is Capitalization Capitalization comprises of share capital, debentures, loans, free reserves,etc. Capitalization represents permanent investment in companies excluding long-term...

The Case for a Bank Based Financial System

Most economists in the world believe that the market system is the most efficient way of allocating resources. However, there...

Challenges to Investment Banking Business

Investment banking has traditionally been a lucrative business. Investment bankers have always been in the news for the excessive amount...

Common Restrictive Covenants in Fixed Income Securities

It is important for investors investing in fixed-income securities to be aware of restrictive covenants. This is because restrictive covenants...

Defined Benefit Pension Plans

Whenever a person from the baby boomer generation hears the term pension plan, they refer to defined benefit pension plans....

The Design of the Central Bank

The banking system is an integral part of the financial system of many countries. In fact, as we have discussed...

Disadvantages of Job Order Costing System

Paperwork Intensive Job order costing systems have a massive paper trail. They function on the basis of this paperwork. This...

Distribution of Risks in an Infrastructure Project

Infrastructure projects tend to have a lot of financial risks. In many cases, the risks are poorly managed. In fact,...

Embedded Options in Fixed income Securities

Options and derivatives are generally associated with equity securities. It is for this reason that most investors are not aware...

Equity to Fixed Assets Ratio – Meaning, Assumptions and Interpretation

Formula Equity to Fixed Assets Ratio = Equity / Total Fixed Assets Equity includes the retained earnings Total Fixed assets...

Financial Goal – Profit vs Wealth

Every firm has a predefined goal or an objective. Therefore the most important goal of a financial manager is to...

How Are Exchange Rates Determined ?

The Foreign exchange market is far more complicated as compared to stock or bond markets. Predicting the foreign exchange rate...

How Credit Rating Works ?

It may seem like the banking business is about money. However, the banking business is really all about information. Until...

How Investment Banks Source Deals?

Investment bankers are intermediaries in the capital-raising process. This means that most of the time, the deals which go through...

Choosing a Valuation Model

Now, since we are aware that there are actually multiple models that can be used to value any given company...

The Impact of Shrinkage on Finance in the Retail Industry

The retail industry is unique in many ways. There are several financial and operational concepts which are more relevant to...

Margin Mechanism in Exchange Traded Derivatives

When it comes to exchange traded derivatives, one of the first things that need to be understood is the margin...

Multi-Currency Accounts

In the globalized world of today, it is common for a business to go international. Almost any company which has...

Concept of Profit Booking and How It Affects Stock Markets

If you have regularly observed the stock market, you may have noticed that a lot of time when the market...

Proof of Importance in Cryptocurrency

In the previous articles, we studied proof of work as well as proof of stake. We learned that the proof...

Roles and Responsibilities of a Portfolio Manager

A portfolio manager is one who helps an individual invest in the best available investment plans for guaranteed returns in...

What is Strategic Budgeting?

The budgeting process is an integral part of any business. The budgeting process is ubiquitous and underlies almost every decision...

The Sunk Cost Fallacy

In the previous article, we learned about how certain psychological factors make a huge impact on our decision-making about financial...

Different Types of Accounts in a Business

The entity concept separates the concerns of the owners from the business. An extension of the same concept is the...

Advantages of Salary Caps

In the previous article, we have already discussed what salary caps are and what are the objectives behind implementing them....

Arguments in Favor of Tax Competition

Before the advent of globalization, every country in the world was working in a vacuum when it came to taxes....

What is Asset Light Business Model, Its Advantages and Disadvantages

It is common knowledge that the world’s largest cab service Uber does not own any vehicles. Similarly, one of the...

Banker’s Acceptance – Meaning, Advantages and its Disadvantages

In the previous articles, we have discussed some of the financial instruments which are commonly used in the money markets....

Bankruptcy as a Strategy – Part 2

In the previous article, we have already studied that all bankruptcies are not involuntary. In many cases, the shareholders and/or...

Components of a Financial Plan

Financial planning is often confused with investment planning. Although investment planning is a major part of financial planning, it does...

The Consequences of Negative Interest Rates

Warren Buffet once told that interest rates are like gravity. If there is no gravitational pull on asset values, then...

Creating a Revenue Model

A financial model is often called a “model of models.” This is because there are several parameters which go through...

Debits and Credits – Building Blocks of Double Entry Accounting System

Debits and credits are the building blocks of the double entry accounting system. Many accounting students find the usage of...

Disadvantages of Salary Caps

In the previous couple of articles, we have tried to understand what salary caps are. We also know the different...

The Endowment Effect

The endowment effect is another important psychological barrier that helps people from realizing the full potential value of their investments....

Examples of Exchange Traded Derivatives

In the previous article, we studied about exchange traded derivatives. We studied their defining features and found out the reason...

How Bankruptcy Affects Personnel Contracts

When a firm declares bankruptcy, this decision has an impact on all the contracts signed by the firm. The law...

Opportunity Cost of Capital – Alternate Uses of Money

Opportunity cost of a capital is a term unique to economics and finance. It is unique in the sense that...

Personal Financial Statements

It is common practice for businesses to prepare financial statements. This is because they need to get these financial statements...

A Primer on Private Placements

When we think about investment banks, as well as the activities that they undertake, we tend to think about initial...

Procedure of Job Order Costing

Before the Job The first four stages are done before the job is being performed. The final purpose of this...

Profit Maximization Criticisms

Many economists have argued that profit maximization has brought about many disparities among consumers and manufacturers. In case of perfect...

Proprietary Ratio – Meaning, Assumptions and its Interpretation

The proprietary ratio is not amongst the commonly used ratios. Very few analysts prescribe its usage. This is because in...

Pros and Cons of a Fixed Benefit Pension Plan

Today, the defined benefit pension plan is viewed as being a relic of the yesteryears. Most of the plans offered...

Risks Faced By Infrastructure Projects in Emerging Markets

Infrastructure projects are most needed in developing nations. These are the countries where infrastructure projects are able to create the...

Selecting the right Portfolio Manager

What is Investment ? It is essential for every individual to keep aside some amount of his income for a...

Strategic Finance and Capital Structure

The capital structure decision has been considered to be a purely financial decision for a very long time. However, in...

Sum of the Parts Valuation

Equity valuation is usually conducted for an entire enterprise. For instance, if we are trying to come up with a...

Technology and Banking Delivery Channels

Technology has touched every aspect of our lives in the recent years and banking has been no exception. Huge strides...

Treasury Bills – Meaning and its Characteristics

In the previous articles, we have studied various money market instruments as well as how they are traded in the...

Treasury Management Services

The role of commercial banks is to act as trusted partners to their corporate associates. Over the years, the degree...

Types of Quotations in Forex Market

Forex quotations can be quite complex for the average person. It takes some training and knowledge to understand that these...

Why are Banks Closely Regulated?

The banking system forms the bedrock of any financial system and even the entire economy. This is because the banking...

Why Timing the Market is a Bad Idea ?

Stock market investments can be akin to gambling depending on the procedure used for making these investments. If the investments...

Zero-Coupon Bonds: Pros and Cons

Zero-coupon bonds are those bonds that are sold at a deep discount to their face value. This means that these...

Arguments against Tax Competition

Proponents of the free market generally believe that competition is good for the economy. They argue in favor of the...

Cash Burn Rate: The Basics

The startup and entrepreneurship game has undergone a lot of changes in the recent past. Earlier, having a free cash...

Causes of Shrinkage in the Retail Sector

In the previous article, we have already understood the concept of shrinkage. We now know how shrinkage is calculated and...

What is Cost Modelling?

In the previous article, we have discussed how important revenue modeling is and the techniques which are used by companies...

Understanding Cryptocurrency Forks

When a new investor enters into the cryptocurrency market, they are often confused by different quotes for what appears to...

Bank Loans vs. Bonds: Debt Financing in Infrastructure Projects

Debt financing is the most important source of finance for infrastructure projects. In most infrastructure projects, the majority of the...

The Deepening Insolvency Theory

Timing is everything when it comes to bankruptcy claims. Any company facing the threat of bankruptcy has a duty to...

Golden Rules of Accounting – 3 Main Principles

While the system of debit and credit is the foundation for maintaining balance and accuracy, it can often feel overwhelming...

Time Correction: How Markets Tacitly Reconcile Bulls and Bears!

Booms and busts have now become a normal part of the business cycles. Due to monetary inflation, the value of...

Important Decisions Influenced by Cost Modeling

In the previous article, we studied the cost modeling process. We understood the various steps which have to be undertaken...

Interbank Market – Meaning, Importance and its Functions

The banking system is the bedrock upon which the modern financial system stands. The banking system is highly integrated with...

Interest Coverage Ratio – Meaning, Assumptions and Interpretation

The interest coverage ratio is a number that has a lot of importance for the creditors of the firm. This...

Intermediaries to a Credit Card Transaction

In the past couple of decades, banks have started providing a new type of product called the credit card. The...

Alternative To Salary Caps: Luxury Tax

The effectiveness of salary caps in meeting the stated objectives has always been a topic of debate. There are many...

Managing the Cash Burn Rate

The concepts of cash burn and cash burn rate are relatively new to the investor as well as to the...

3 Modern Financial Management Techniques that Will Change Your Business

Whether you’re a business or an individual, you have to find a way to manage your finances now and in...

Precedent Transaction Analysis

Investment bankers use several different types of methodologies while arriving at the valuation of a company. One of the most...

Primary Markets vs. Secondary Markets

The buying and selling of financial securities is a complex process that has evolved over many years. Each security represents...

Regret Aversion Bias

In order to be successful at investing, an investor not only needs to have mastery over their numbers, but they...

Remote Deposit Capture (RDC)

Commercial banks have been relying on a wave of digitization in order to provide the best-in-class service to their customers....

Securitization: The Making of an Exchange Traded Derivative

The modern financial system is all about innovation. The system and its proponents believe that financial jugglery can solve almost...

Spoilage and Rework in Job Order Costing System

What Is Rework? Rework is that part of the final produce which has not been accepted by the client because...

Step Up Bonds: Pros and Cons

Step-up bonds are special types of fixed income instruments. They help investors partially offset the risks of rising interest rates....

Strategic Finance and Competitive Advantage

Globalization has led to increased competition. Artificial boundaries no longer stop competitors from entering markets and even dominating them. This...

Tax Co-operation: A Primer

The modern world is globalized. This means that free movement of goods, services, people as well as capital is allowed...

Types of Orders in the Forex Market

Why Orders are Important in Forex Markets ? There is a need for some form of automation in the Forex...

Valuing Cash Flows in Different Periods

Cash flows vary from project to project. In some cases cash flows will occur evenly over time. There might be...

What are Bonds? – Characteristics and Different Types of Bonds

Why Investment is Important ? Every individual needs to put some part of his income into something which would benefit...

What are Soft Forks?

In the previous article, we have already read about cryptocurrency forks. We now know that a cryptocurrency system is basically...

Why do Retail Restructurings Fail?

The retail sector has been under significant financial distress in the recent past. An alarmingly large number of retail companies...

Advantages and Limitations of a Budget

In the previous article, we learned about the three financial statements. We also learned how income statements and balance sheets...

Advantages of Defined Contribution Plans

The past couple of decades has seen tectonic shifts in the way pension plans are being funded. Investors all over...

Dividend Discount Model: Advantages

Dividend discount models are the first type of discounted cash flow models that we will study. The model simply discounts...

Degree of Financial Leverage Ratio

A high debt equity ratio makes the company financed by debt more than by equity. Therefore there are fixed interest...

Disadvantages of Defined Contribution Pension Plans

Defined contribution plans have come under a lot of criticism because of the various disadvantages that they have. Many of...

Dividend Discount Model: Disadvantages

The dividend discount model also has its fair share of criticism. While some have hailed it as being indisputable and...

Elasticity of Taxes

In the previous article, we have studied the concepts of the tax base and tax rate individually. Now, it is...

Fee Based Banking Services

Banks earn their income in two parts. One type of income is generated by undertaking risk i.e. by lending their...

Financial Intermediaries – Meaning, Role and Its Importance

Introduction A financial intermediary is a firm or an institution that acts an intermediary between a provider of service and...

Financial Modeling: Important Metrics

Financial modeling can be considered to be the science of making informed decisions regarding a company based on data simulations....

Fundamental Principles of Accounting

Following are the basic fundamental principles of Accounting: Monetary Unit Accounting needs all values to be recorded in terms of...

Indicators That Help in Predicting Stock Market Crashes

The stock market tends to run in cycles. For a couple of years, the market maintains a bullish stance. Then...

Investment Banks and Underwriting

The primary function of investment banks is to help their clients raise equity capital. This is often done by initial...

Key Terms and Conditions in a Term Sheet of Startup Funding

In the previous article, we have already learned that term sheets are the basis on which the entire relationship between...

Merchant Cash Advance in the Retail Sector, Its Advantages and Disadvantages

The retail sector has some unique financial needs. There are various types of retail establishment across the world which use...

Money Markets vs. Capital Markets

Financial markets are markets where financial instruments or securities are traded. Financial markets can be classified based on various parameters....

Notional Value: Derivatives Markets

People often say that the size of the derivative markets is exploding. It is over $700 trillion dollars a year...

Parties Involved in Infrastructure Debt Issuance

Bonds are commonly issued during infrastructure projects. The company holding the equity stake is generally the one issuing the bonds....

Payment in Kind Bonds – Advantages, Disadvantages and its Types

In the past few articles, we have studied about different types of coupon payments. These coupon payments vary from each...

Ratio Analysis in Personal Finance

Ratio analysis is considered to be very important when it comes to making financial investments. There are many retail investors...

Repo Market – Meaning and its Importance

The repo market is probably the largest section of the money market. It is estimated that the daily volume of...

Risks Associated with Remote Deposit Capture

The usage of remote deposit capture has been increasing rapidly in the recent past. This is because the technology is...

Scrap and Job Order Costing

What Is Scrap? Scrap is the waste that arises while manufacturing goods. It may arise because the unit being manufactured...

Security Analysis and Portfolio Management

What is a Security ? Assets with some financial value are called securities. Characteristics of Securities Securities are tradable and...

Self-Control Bias

Investors who have been in the market for a long time know that investing is an emotional activity as much...

Strategic Finance and Sustainability

The concept of strategic finance relates to making decisions that help the firm increase its cash flow in the long...

What are Hard Forks?

In the previous article, we learned about the concept of forking in the cryptocurrency universe. We also understood that we...

What is Perpetuity? – Make Smarter Investment Decisions

Perpetuity is a very important concept in corporate finance. The concept of perpetuity makes it possible to value stocks, real...

Advantages and Disadvantages of Forex Market

Advantages of Forex Market The biggest financial market in the world is the biggest market because it provides some advantages...

Sources of Revenue: Broadcasting Rights

The consistent generation of revenue is important for the success of any sports league. If the organizers of any of...

Costs Associated With Bankruptcy

In the previous article, we have studied about how some companies have started using bankruptcy strategically. This means that they...

Dealer Markets vs. Broker Markets

Markets across the world can also be segregated based on the type of intermediary. Prima facie, it may appear that...

Degree of Operating Leverage Ratio

The degree of operating leverage of a company is very important from an investor’s standpoint. Although it shows the riskiness...

Dollar-Cost Averaging

There are two predominant schools of thought about the stock market. The views of these schools of thought are somewhat...

External Credit Enhancement in Infrastructure Financing

Infrastructure projects continue for a long period of time. Sometimes these projects continue for decades. Hence, they need long term...

Growing Perpetuity

We have seen that a perpetuity represents an infinite stream of future cash flows. However, we have also seen that...

How are Broadcasting Rights Revenue Split Amongst Franchises?

In the previous article, we have already seen the importance of broadcasting revenue. We also know what the shortcomings of...

How does DIP Financing work?

In the business world, Cash is King. Companies that do not have adequate cash cannot survive for very long. This...

How Triparty Repo Works?

In the previous article, we have already learned about the repo market. We learned about how the repo market is...

The Impact of Technology on Pension Funds

Technology is the elephant in the room as far as pension funds are concerned. There is no meeting or conference...

The Importance of Forex Education

Some Forex traders fail because they try to run even before they can walk. You may be passionate about trading...

Over the Counter Derivatives Regulation

The derivatives markets all over the world have been under fire after the 2008 crisis. There is increasing clamor and...

Portfolio Revision – Meaning, its Need and Strategies

What is a Portfolio ? A combination of various investment products like bonds, shares, securities, mutual funds and so on...

Prime Brokers in Investment Banking

Investment banks all over the world have deep relationships with hedge funds. This is because investment banks often become the...

Red Flags that Investors Need to Look out for in Term Sheet

First-time investors are quite anxious to raise funding for their projects. The fact that professional investors are looking to invest...

Role of the Finance Function in the Financial Management for Corporates

The Finance Function in Corporates We often read about how corporates are doing financially with reference to their profits, asset...

Scenario Analysis: A Primer

Scenario analysis is at the heart of financial modeling. In fact, in many cases, a financial model is created solely...

Secondary Revenue Streams in Retail

The retail sector has been in doldrums in the recent past. The entire industry is struggling financially. The financial troubles...

Single Period Dividend Discount Model

To understand the dividend discount model, we need to start from the basics. The simplest way to understand the dividend...

What Are Smart Cards and How are They Better than Credit Cards ?

Credit cards have become an increasingly important part of every consumer’s finances. Banks now have more credit card customers than...

Strategic Finance and Technology

Businesses rely heavily on technology in order to obtain a competitive advantage. In today’s world, most successful companies have a...

Strategies Used by American Companies for Tax Avoidance

America has been the hub of financial and entrepreneurial activity ever since the end of World War 2. However, over...

Treasury Inflation-Protected Securities (TIPS)

Investors who hold bonds generally earn a fixed nominal rate of return. However, the nominal return that they earn is...

Contribution Margin

Rearranging the Profit Equation: The contribution margin is created by rearranging the profit equation to provide the requisite details. The...

Anchoring Bias in Behavioural Finance

The average investor may be able to keep their thinking in check and save themselves from a lot of biases....

What is Bank Guarantee? – Different Types of Guarantees

The scope of trade has been widely expanded in the modern world. There are many kinds of organizations, private and...

A Primer on Bills of Exchange

What are Bills of Exchange? A bill of exchange is a promissory note that is usually issued by the buyer...

Cash vs. Accrual Basis of Accounting

Cash Basis of Accounting Cash Basis of Accounting uses receipts and payments of cash to record incomes and expenses. Therefore,...

Centralized Cryptocurrency Exchanges

The popularity of cryptocurrency is causing investors to make a beeline for buying into the cryptocurrency boom. The trading activity...

Decentralized Crypto Exchanges

Cryptocurrencies are just like other financial assets. This means that they can also be bought and sold in financial markets....

Degree of Combined Leverage Ratio – Formula, Examples and Interpretation

Most firms use both operating leverage and capital leverage to some extent. In today’s business world it is almost impossible...

Financial and Economic Models used in the Equity and Currency Markets

We often read about how electronic and software based trading is the norm in stock or equity markets as well...

Follow On Public Offer

The common perception is that companies need to cultivate relationships with investment bankers only if they are unlisted and need...

How Corporate Dividends are Taxed?

The continuous inflow of capital is vital for any economy to grow in the long run. This inflow of cash...

Major Currency Pairs in Forex Market

The Importance of Major Pairs The Forex market is a place where trading happens in all currencies. However, the volume...

Multiproduct Contribution Margin

Finding the Contribution Margin: It begins with the same old way. Companies have to compute the contribution margin for each...

Over the Counter Markets

Over the counter markets are a particular type of financial market. Generally, financial markets are centralized. This means that there...

Pitfalls of Dollar-Cost Averaging

In the previous article, we learned about what dollar-cost averaging is. We also learned about some of the benefits that...

Pros and Cons of Bank Guarantees

In the previous article, we have already studied what bank guarantees are and how these bank guarantees are provided by...

Pros and Cons of Technology in Pension Funds

In the previous article, we have already seen how fintech is changing almost every aspect of pension fund management. The...

Revenue Bonds and the Cash Trap Mechanism

Infrastructure projects last for many years. As a result, different sources of funding are used at different points of time...

Risk Management in Financial Modeling

Financial models were widely used by corporations, even in 2008. However, the severity of the 2008 crash forced financial institutions...

Risks Faced By Banks

It is often said that profit is a reward for risk bearing. Nowhere is this truer than in the case...

What is Single Entry System ? – Pros and Cons

What is Single Entry System ? Single entry accounting systems record only one side of every transaction. This happens because...

Sources of DIP Financing

As mentioned in the previous article, the financing required by companies in order to keep their operations afloat after filing...

The True Cost of Raising Funds

A startup is considered to be successful when it is able to raise money. The fact that a startup was...

Two Period Dividend Discount Model

The next step towards understanding the dividend discount model is to extend the conclusions derived from the single step dividend...

Variable Rate Demand Obligations

Municipalities use a wide range of financial instruments in order to borrow funds from the money market. This includes the...

What is Annuity? – Meaning and Concept

An annuity, just like a perpetuity, is a shortcut used while making present value calculations. Unlike the perpetuity, which is...

What is Convertible Debt?

The fixed-income security market is mostly composed of financial instruments which offer a fixed stream of income to investors. In...

A Primer on Forfaiting

Forfaiting is an important means of raising short-term finance for companies that indulge in foreign trade. With the increasingly easy...

Why Retail Stores Offer Branded Credit Cards?

The retail industry has become closely intertwined with the finance industry over the years. This is the reason that the...

Why Financial Innovation can be both a Force for Good and Bad ?

Exotic Innovations or Weapons of Mass Destruction ? Anybody who has followed the severe and protracted financial crises of the...

The Perils of the Immediacy Trap and Why we can and cannot do without it

What is the Immediacy Trap and How we can and cannot do without It We are living in a 24/7...

Strategic Finance and the Outsourcing Decision

For a long period of time, the term outsourcing has been associated with cost reductions. Outsourcing is generally considered to...

Common Issues with Revenue Generated from Broadcasting Right

In the previous article, we have already seen that broadcasting rights and the revenue from the sale of these broadcasting...

Confirmation Bias in Behavioral Finance

The vast majority of investors fail to perform well in the stock market because of behavioral and emotional reasons. The...

Retail Banking : Demand Deposit Products

Deposits can be divided into two types. The first type is time deposits in which an account holder gives the...

Digital Media Rights and Sports League Financing

Technology all over the world has been advancing at a breakneck speed. Just a few decades earlier, radio was the...

Dividend Discount Generic Model

In the previous two articles, we saw how information regarding the possible future price, dividends and rate of return expected...

Double Entry Bookkeeping System in Accounts

The double entry system of bookkeeping is said to have revolutionized growth in modern business. It is only because businesses...

Floatation Costs and Investment Banking

Whenever companies need to raise money by accessing the public markets, they have to use the services of investment banks....

Government Sponsored Entities

Money market securities are generally issued by firms that have a very strong credit rating. This is because investors do...

An Introduction to Hedge Funds

The term “hedge funds” have become ubiquitous in the financial markets nowadays. This is a term which incites a strong...

Herd Mentality Bias

Human beings are social animals. For centuries, our brains have been wired to conform to the actions of the larger...

How Buy Now and Pay Later (BNPL) Works in the Retail Industry?

The retail industry has been constantly innovating in order to become financially more viable. There are several innovations which have...

How Do Pension Funds Influence Economic Growth?

Pension funds have witnessed a dramatic increase in the number of assets that they control. This increase has been the...

Managing Revenue Risks in an Infrastructure Project

Equity and debt are the most commonly used sources of funding when it comes to infrastructure financing. However, in many...

Modeling Discounted Cash Flows

Discounted Cash Flow (DCF) analysis is the bedrock of modern-day financial analysis. It is for this reason that financial modelers...

Ordinary Annuity vs. Annuity Due

Annuities can be divided into two types based on the exact time when the payments occur in a given period....

Smart Contracts in Cryptocurrency

Smart contracts is another term that is commonly used within the cryptocurrency community. For the layman, this term can be...

Stock Market Circuit Breakers

The job of a stock market is to provide relatively safe trading opportunities to its participants. Through this efficient process...

A Primer on Tax Deferral

Most multinational companies registered in America have business interests outside of the United States. Since the United States has a...

Types of Market Participants in Forex Market

The $4 trillion dollar Forex market witnesses a lot of market participants. However, all of these participants have different motives....

Valuation of Early-Stage Startups: The Mindset of Investors

The valuation of early-stage startups is a controversial topic. There is no widely agreed-upon valuation methodology that can be used...

Value Averaging Method of Investment

There are many investors who believed that dollar-cost averaging was not a good strategy and that it did not work...

What Different Stakeholders want from a Bankruptcy?

When a company files for bankruptcy, the interests of many different parties are impacted. This is the reason that bankruptcy...

Wholesale Financial Markets

The financial services industry can be divided into two sectors viz, the retail and the wholesale sector. On one hand,...

Advantages and Disadvantages of Convertible Debt

In the previous article, we studied the concept of convertible debt and some of the common terms which are used...

Aspiring for a Career in Finance? Here are Some Things that Would Help You Prepare

The Glitz and Glamour of Finance Beckons Many Many management graduates and those working towards entering business schools often aspire...

Bears in the Bond Market

If certain high profile fund managers and bond investors are to be believed, then the bond market has just slipped...

Introduction to Cash Flow Ratios

Once upon a time, investors and analysts used to believe in ratios that have been calculated based on the earnings...

Constraints and Contribution Margin Analysis

Hidden Assumption: The cost volume profit analysis has a rogue assumption. This rogue assumption believes that the cost volume profit...

What are Corporate Credit Cards? – Different Types of Cards

Credit cards have been a great financial innovation that has revolutionized personal banking. As far as retail banking is concerned,...

Dealing With Special Claims during Bankruptcy

The bankruptcy process takes a long period of time to resolve. During this time frame, the company takes the protection...

Debt Schedule in Financial Modelling

The inability to manage debt is one of the biggest reasons behind the failure of many companies. Just in the...

How do the Derivative Markets Function?

Derivative markets are unique kinds of markets where derivative instruments are traded. As we already know, derivative financial instruments are...

How Hedge Funds Makes Money ?

The inner workings of hedge funds are as elusive as their outward appearance. The general public usually does not know...

Mental Accounting

Traditional economic theory assumes that all money is fungible. The meaning of the word fungible is “interchangeable.” Hence, according to...

Money Market Futures – Meaning and Types

The money market is a full-fledged financial market. Hence, there are many investors who are keen to hedge the risks...

Need for a Uniform and Common Theory of Accounting

Need for a Uniform and Common Theory of Accounting The frequent attempts by experts and professionals on having a “theory”...

Pre Money and Post Money Valuation

Startup valuation is one of the most important issues faced by startup companies in their earlier years. On the one...

Problems in Comparing Pension Fund Returns

Pension funds are present in some form in almost every country of the world. Hence, ideally, there should be comparisons...

Relationship Banking in Commercial Banking

Commercial banking is fundamentally different from retail banking in several ways. One of the main differences between the two types...

The Rent vs. Buy Decision

The rent vs. buy decision is as old as the concept of financial planning itself. There are people who have...

Roadshows in Investment Banking

Roadshows are an important part of the investment banking process. This is because this is the stage where all the...

Sports League Sponsorships: A Primer

Sports league sponsorships are a very important source of financing for many leagues across the world. The revenue derived from...

Want to Become a Financial Professional? Read on for Some Tips on How You Prepare

Are you aspiring for a career in banking and finance and financial services? Do you dream of working in a...

Different Types of Annuity Calculations

In the articles on present value, we learnt that the value of a dollar today is not the same as...

Types of Intervention by Central Banks in Forex Markets

When Do Central Banks Intervene in the Forex Market ? Central Banks do not intervene often in the Forex market....

Dividend Discount Model: Gordon Growth Rate

In the previous article, we became aware that the value of a stock can be split into two parts. One...

Why Amazon and Netflix Pay $0 in Corporate Taxes?

Amazon and Netflix are two of the most profitable firms in the entire world. For instance, last year, Amazon alone...

Retail Banking: Time Deposit Products

In the previous article we studied that there are two types of deposits that banks use to fund their lending...

Accounting for Convertible Debt

In the previous article, we have established the fact that convertible debt is advantageous to some types of companies. We...

Benefits of Buy Now Pay Later (BNPL)

Buy Now Pay Later (BNPL) is the latest buzzword in the retail industry. The media has been full of debates...

Cash Flow to Debt Ratio – Meaning, Formula, Assumptions and Interpretation

Formula Cash Flow to Debt Ratio = Operating Cash Flow/Total Debt Meaning The cash flow to debt ratio tells investors...

Consequences of Incorrect Job Order Costing

Causes of Failure of Job Order Costing: The following is the list of the most probable causes that would cause...

Cost Overruns in Infrastructure Projects

The risk involved in an infrastructure project does not remain the same throughout the life of a project. Instead, the...

Cryptocurrency Wallets – Meaning and Different Types of Wallets

The ownership and storage of cryptocurrencies are quite different as compared to regular currencies. It is for this reason that...

Disadvantages of Buy Now Pay Later Financing

In the previous articles, we have already seen what Buy Now Pay Later (BNPL) financing is, how it is implemented...

Dollar Yuan Peg

China has become the largest exporter of goods in the world. This has been a remarkable feat achieved by the...

Exchange Rate Regimes

International trade is a vital component of the economy of any nation. Also, international trade is highly dependent upon exchange...

What is Financial Modeling and What Purpose does it serve in the BFSI Sector?

What is Financial Modeling and How Does it Help Financial Professionals? Ask any banker or for that matter any financial...

Financing Your Home

Buying a home is a huge financial decision. The effects of this decision are felt throughout the life of an...

Free Cash Flow to Operating Cash Flow Ratio – Meaning, Formula and Interpretation

The free cash flow to operating cash flow ratio is different from other ratios. It is different in the sense...

High Yield Bonds

The international bond market is a large and diverse market. There are various categories of bonds that are issued in...

How a Recession Will Impact Pension Funds?

The post-pandemic economic environment across the world has bearish undertones. During the pandemic, many countries had lowered their interest rates...

How are Losses Treated in Corporate Tax?

Corporate income tax is collected when there is corporate income i.e. when the revenue collected by the corporation exceeds the...

Multiplier Effect: How Fractional Reserve Banking Creates Money ?

The modern banking system is considerably different from what the average person believes it to be. Banks are not institutional...

Managing Assumptions During Financial Modelling

Making assumptions is an integral part of every financial calculation. It is a known fact that if the assumptions are...

Need for a Theory of Accounting to Improve the Accounting Profession

Creative Accounting and the Need for a Theory of Accounting The rise of “creative accounting” practices, an euphemism for hiding...

The Objectives of Reorganization

After a firm has filed for bankruptcy, the court provides relief against creditors and even further lawsuits. However, this is...

Gordon Growth Model: Pros and Cons

The Gordon growth model is a well known and widely known model for valuing equity securities. However, as with every...

Pros and Cons of Relationship Banking

In the previous article, we studied what relationship banking is and how it is different as compared to transactional banking....

Recency Bias

There is a common saying in the investment markets that “In the short run, the markets are a voting machine...

Start-Up Valuation: Advanced Concepts

In the previous articles, we have already studied the basics of start-up valuation. We are also aware of the basic...

Types of Hedge Funds

Hedge funds are simply funds with high leverage and no regulation. They have come into existence in the past couple...

Types of Sponsorships Given to Individual Players

In the previous article, we have already seen that sponsorship is one of the predominant ways in which a sports...

Volatility in Money Markets

In the previous articles, we have learned about how the money market is just like any other financial market. This...

What is Bond Valuation and How is it Calculated ?

One of the Most Important Uses of Discounting The present value of a bond is the sum of all the...

Bridge Loans in Investment Banking

Investment bankers play different types of roles when it comes to capital raising. Most of the time, they are middlemen...

Causes for Cost Overruns in Infrastructure Projects

In the previous article, we explained the concept of cost overrun. We also explained how cost overruns have a negative...

The Economics of Sports Leagues

The discipline of economics is generally valid for all industries across the world. This is because the basic fundamental economic...

The Financial Benefits of Warehouse Automation

Retail organizations across the world face multiple challenges when it comes to managing their business operations. Managing retail warehouses is...

Financial Modeling for Banks

Financial modeling generally does not differ very much from industry to industry. For instance, if a person creates a financial...

Fixed-Rate Mortgage vs. Adjustable Rate Mortgage

We already know that a mortgage is one of the biggest expenses that any investor has. It is also common...

Forex and Labor Arbitrage

Arbitrage was earlier restricted only to commodities that could be traded easily in the markets. It is a phenomenon born...

How do Pension Plans Work?

The main objective of the financial system is to allow the participants to meet their financial goals. One common goal...

How Pre-Revenue Companies are Valued?

Valuation of any company can be a very complex task. However, when it comes to pre-revenue companies, this complexity is...

Leveraged Buyouts in Investment Banking

Anyone working in the investment banking industry for a few years has definitely come across the term “leveraged buyouts.” It...

Operating Cash Flow to Sales Ratio – Formula, Assumptions and Interpretation

Formula The formula for this ratio can be easily judged by its name: Operating Cash Flow to Sales Ratio =...

Overconfidence Bias

Contrary to traditional economic theory, investors are not completely rational human beings. Instead, they are also emotional. This also means...

Point of Sale (PoS) System – Meaning, Importance and Benefits

With the advent of technology, more and more people have started accepting digital payments. This means that corporations have to...

Risks in Money Market Investing

Money market instruments are considered to be very low-risk investments. This is because the money market as an asset class...

The Disclosure Statement

The disclosure statement is a legal document which every company undergoing bankruptcy in the United States is expected to create...

Third-Party Risks in an Infrastructure Project

In the previous few articles, we have come across the various types of risk which are present in an infrastructure...

Valuing Preference Shares Using Dividend Discount Model

The dividend discount model is also used to measure the value of preference equity in addition to forecasting the value...

Why Hedge Funds Fail ?

Hedge funds are considered to be the riskiest of all asset classes. Almost everybody considers hedge funds to be completely...

Does Financial Innovation Benefit the Society?

We live in a world which idolizes innovation. We tend to idolize companies which have produced some products which can...

Tax the Rich Policy: A Critical Analysis

There are few issues which strike through the heart of communists in China and capitalists in America similarly. One such...

Advantages and Disadvantages of High Yield Bonds

In the previous article, we understood about how high-yield bonds have emerged as one of the biggest market segments in...

Alternative Assets in Pension Funds

Pension funds across the world generally invest in traditional asset classes such as debt and equity. However, over the past...

Bond Market Conventions

While calculating present values of bonds, one may observe that some of the information required to compute the present value...

Capital Adequacy Ratio – Meaning and its Importance

Banks in the modern world face an inherent risk of insolvency. Since the banks are so highly leveraged, there could...

An Overview of Contracts and Why They are Important to Business and Society

Contracts govern all transactions whether they are between firms or between firms and private individuals. Indeed, in most of the...

Financial Modelling for Insurance Companies

Financial strategy is at the heart of the business of any insurance company. This is because insurance companies need to...

Hedge Funds vs. Mutual Funds

Hedge funds are both exclusive as well as elusive. They differ from other funds like mutual funds in a large...

The Phenomenon of House Poverty

Homeownership has been at the center of every American dream for the past few decades. The conventional belief is that...

How Changes in Interest Rates Affect Bonds ?

Interest rates are one of the most important factors while determining the bond value. All other factors like payments, number...

How Money Market Impacts Other Markets?

In the previous articles, we have learned that the money market is a very important market in our financial system....

Link between Present Value of Growth Opportunities (PVGO) and Dividend Valuation

Valuing a corporation is a complex exercise. This is partly because there are multiple ways of looking at the same...

Longevity Risk and Pension Funds

Advances in medical science have increased the life span of individuals. It is now common for people to live for...

Market Related Ratios – Meaning and Its Importance

Most investors do not invest directly in the company i.e. they are not promoters of the company. Rather they invest...

Next Day Funding – Meaning and its Benefits

In the previous article, we have already studied how commercial banks help in providing point-of-sale services to their corporate customers....

The Pitfalls of Quarterly Capitalism

Creating the maximum possible shareholder value had always been the cornerstone of capitalism. All economic theories had always been aimed...

Pre-IPO Investing

An initial public offer (IPO) is a method of selling securities wherein the entire lot of securities is offered for...

Preferred Shares: An Introduction

Whenever the topic of fixed income securities is considered, the obvious assumption many investors make is that the conversation is...

Shadow Banking – Meaning, Functions, Advantages & Disadvantages

Banking is perhaps the most regulated industry on the planet. The movement of funds in and out of the banking...

The Solicitation Process

The disclosure statement is only the first step in the bankruptcy process. After the solicitation statement has been approved by...

Types of Warehouse Automation

In the previous article, we have already seen what warehouse automation is. We have also seen various financial benefits that...

Valuation Divergence – Meaning and its Importance

For any startup financing to be successful, the startup company and the investors need to be on the same page...

Vendor Finance in Infrastructure Projects

Debt and equity from investors remain the two conservative sources of funding when it comes to infrastructure financing. However, with...

Why Do Sponsors Fund Teams in Sports Leagues?

In the previous articles, we have already seen that the sponsorship of sports teams can happen at multiple levels. We...

Advantages of a Digital Depository System

In the previous article, we learned about what a digital depository system is and how it functions. We also understood...

Carry Trade and Rollovers

Concept of Carry Trade Carry trade is a kind of trade that is peculiar to the Forex market. In other...

Conservatism Bias

In accounting and in finance, conservatism is generally considered to be a positive quality. However, studies in behavioral finance have...

Data Analytics in Commercial Banking

Commercial banking has traditionally been a relationship-driven business. This meant that the business was primarily driven by human-to-human contact. Over...

Dividend Discount Valuation: H Model

The dividend discount model makes a lot of assumptions. Some of these assumptions are not considered to be viable by...

The Financial Disadvantages of Retail Warehouse Automation

In the previous few articles, we have already seen what retail warehouse automation is. We are now aware of the...

5 Step Retirement Planning

Retirement planning is one of the most neglected fields in financial planning. This is the reason why a lot of...

Framing Bias

Traditional economic theory assumes that investors are completely rational beings. Hence, they react to information in the same way if...

Hedge Funds and Money Laundering

Money laundering is a heinous crime. Although it does not directly lead to loss of human lives, it allows money...

How Do Option Pools Work?

Option pools are synonymous with startups. Founders, investors, and employees expect the company to have some sort of option pool...

How Securities are Priced in the Primary Market

We already know that primary financial markets are used by firms to raise funds from investors. This is done by...

Impact Investing: Where Profit Meets Social Responsibility

Finance as a force for good Even before the 2008 global financial meltdown, finance worldwide was not exactly successful at...

Internet Only Banks

Concept of Internet Only Banks With the advent of internet banking, a large part of the services that are offered...

Longevity Bonds and Longevity Derivatives

In the previous article, we have already seen how pension funds have been adversely affected by an increasing amount of...

The Merger Modeling

The Three statement financial models and discounted cash flow models are considered to be basic from a financial modeling point...

Money Market Reforms

The money market is interlinked with other markets such as the stock market and the bond market. As such, if...

Price to Earnings (PE) Ratio – Meaning, Formula and Interpretation

The price to earnings ratio is the most fundamental of all market related ratios. It has been used for decades...

Reverse Mergers

The profession of investment banking has become quite innovative over the years. Traditionally, raising capital was an expensive as well...

Securitization in Infrastructure Finance

Bank loans are the dominant source of financing for infrastructure projects. This is truer in the case of developing countries...

Concept of Special Drawing Rights (SDR’s)

What Are Special Drawing Rights (SDRs)? Special Drawing Rights (SDRs) were a part of the monetary system that was created...

Common Stock Valuation: The Two Approaches

Ever since the inception of corporation as a separate legal entity, the common stock has become one of the most...

Title Sponsorship and its Disadvantages

We already know that modern sponsorship has evolved into a complex endeavour. Earlier, there used to be just one type...

The Voting Process

After the solicitation, packages are sent out, and the creditors are given all the information that they need, it is...

Advantages and Disadvantages of Preferred Shares

In the previous article, we understood what preferred shares are and also paid attention to their characteristic features. In this...

Stock Valuation – The Discounted Cash Flow Approach in Detail

In the past article we have seen how Discounted Cash Flow (DCF) is the most appropriate method of stock valuation...

Hedge Funds and Regulations

Technically, the term hedge fund does not exist. In fact, the term hedge fund applies to any fund which is...

How Green Bonds Work?

Stakeholders all over the world are concerned about the irreversible damage being caused to the ecosystem of the earth. There...

Impact of Covid on Pension Funds

The coronavirus pandemic was one of the biggest disruptive events that most people will witness in their entire lifetimes. The...

Interest Rates and Forex Market

The exchange rate between two currencies is determined by the interaction of several variables. Some variables have more influence on...

Leasing in Infrastructure Finance

In the previous article, we have studied about how vendor financing is being used as an alternate mechanism of finance...

The ABC of Peer To Peer Credit

The financial world has not witnessed much innovation since the 2008 meltdown. This is because any innovation in this sector...

Phases of Growth and Valuation Models

Dividend discount models are based on the assumption of constant or linear growth. However, a mere look at the empirical...

Price Earnings Growth (PEG) Ratio – Formula, Assumptions and Interpretation

The Price Earnings Growth (PEG) Ratio is one of the first variations that were made to the Price to Earnings...

Retirement Basics: Roth IRA

Roth Individual Retirement Account (IRA) is a retirement account that has been named after Senator Roth, who played an instrumental...

The Role of Commercial Banks In Liquidity Management

Due to increasing globalization in the world economy, a lot of multinational corporations today have their businesses spread out across...

Sale of Assets during Bankruptcy

When a company is facing bankruptcy, it tries to free up as much capital as possible. This freed up capital...

Advantages of Title Sponsorship

In the previous article, we have already understood the meaning of title sponsorship. We also know why it is one...

The Use of Reference Rates in Financial Markets

Debt securities are widely issued and traded in the secondary market. Debt securities could have a fixed interest rate or...

What are Capitalization Tables?

The capitalization table is a very important record for any startup company. These tables provide a clear and unambiguous report...

Stress Testing in Money Market Funds

From the previous articles, we already know that money markets form an integral part of the overall financial system. Also...

Merger Modelling: The Accretion/Dilution Analysis

Merger modeling requires creating many sub-models which enable decision making. The accretion/dilution analysis is one such sub-model. It is one...

Automation in Retail Stores

In the previous few articles, we have already studied the concept of automation as it related to retail warehouses. However,...

Behavioral Portfolios

There is a fundamental difference in the way portfolios are viewed in traditional financial theories and the way in which...

Chinese Walls in Investment Banking

The nature of investment banking is such that investment bankers are supposed to work very closely with their clients. In...

Covered Bonds

Asset-backed securities have become famous all over the world in the past few years. The largest market for asset-backed securities...

Debt to Equity Conversions

Debt to equity conversions is one of the most commonly used tools in the bankruptcy universe. These transactions allow companies...

Exorbitant Privilege: US Dollar

The financial community of the world is at a consensus that the current economic system provides the United States government...

Financial Modelling For Leveraged Buyouts (LBOs)

Just like mergers and acquisitions, modeling for leveraged buyouts (LBOs) also requires special skill and knowledge. In this article, we...

Financial Models for Startups

Planning is an essential function that the founder of a startup company needs to perform. However, this planning is often...

Hedge Funds and Conflict Of Interest

Hedge funds are often looked upon as being unethical in their practices. This is partly because there is public outrage...

Hindsight Bias

There are several cognitive biases that affect our ability to think clearly about financial investments. One such bias is called...

Price to Book Value Ratio – Formula, Meaning, Assumptions and Interpretation

Formula Price to Book Value = Current Market Price / Total Assets – Intangible Assets The value of assets is...

Real-Time Liquidity – Meaning, Importance and Challenges

The liquidity management paradigm in the commercial banking industry has undergone a drastic change. At one time, liquidity management was...

Redlining: Americas Racist Financial Policies

America is a developed country and an inclusive society. It should ideally no longer face the problems of racism and...

Rigging the LIBOR

The British banking regulator FSA has prosecuted Barclays for rigging the interest rates in the market. The regulator termed it...

Dividend Discount Model: Share Repurchase Programs

In corporate finance we studied that companies had an option when it came to compensating their equity shareholders. They could...

Shark Repellent Tactics in Investment Banking

The profession of investment banking has evolved over the years. Earlier, they were only used when companies wanted to issue...

The Concept of Stock Keeping Units (SKU’s)

Companies like Wal-Mart are often credited with bringing in technology to the retail business. Prior to multinational companies introducing technology,...

Strategic Use of Land in Infrastructure Financing

A lot of developing countries do not have the finances required to build large scale infrastructure projects. However, these countries...

Team Sponsorship: Advantages and Disadvantages

In the previous articles, we have already come across the concept of team sponsorship. We have seen how teams can...

Types of Pension Fund Regulation

Pension funds are one of the most regulated financial investment vehicles in the world. Pension funds all over the world...

Assumptions Made During Stock Price Valuation

Estimating the value of equity stock of a company is not an easy proposition. This is because while estimating the...

Auto Loans and Personal Finance

Personal finance gurus seem to have differing opinions on many subjects. Some of them believe that mutual funds are good...

Benefits of In Store Automation

The retail business runs on wafer thin margins. As a result, every additional dollar that the store is able to...

Conditional Pass-Through Covered Bond

In one of the previous articles, we studied about covered bonds. We discussed how covered bonds are considered to be...

Disadvantages of in Store Automation in Retail Stores

The concept of in-store automation is increasingly becoming popular in the retail sector. In the previous articles, we have already...

Earnings Power in Personal Finance

The United States of America is full of people who have huge student loan debt, credit card debt, and mortgage...

The Financial System and Basel Accords

In the previous articles, we have already read about how banks are the main pillars of the financial system. It...

Hedge Funds and Leverage

Leverage is one of the defining features of any hedge fund. Therefore hedge funds have gained expertise in the creation...

What is Illusion of Control Bias and How to Avoid it

Any stock market around the world is huge in size. It is made up of many participants who regularly buy...

The Impact of Bankruptcy on Shareholders

Companies that file for bankruptcy also have a capital structure just like normal companies. This means that their capital structure...

Implied Dividend Growth Rate

We are now aware of the various models that are used for equity valuation like Gordon model, H model, 2...

Key Performance Indicators for Startups

Entrepreneurs as well as people in the general market are often left perplexed about how investors decide to value any...

Living in a Cashless Society

Our monetary system has undergone a sea of change in the past century. If our great grandfathers were to see...

Notional Pooling – Meaning, Advantages and Disadvantages

Commercial banks provide various types of services to their customers. One such area of service is that of liquidity management....

4 Main Objectives of Sponsorships

In the previous few articles, we have already seen that sports sponsorships have been witnessing a significant rise in the...

Price to Cash Flow Ratio – Meaning, Formula and Interpretation

“Cash is King” say the bigwigs on Wall Street. That is why the valuation of shares is done on the...

Prospectus in Investment Banking – Part 1

The job of an investment banker includes enabling the flow of information between the company and its investors. When a...

Responsibilities of Pension Fund Regulators

In the previous article, we have already determined why it is important to closely monitor the workings of pension funds...

Universal Childcare: A Financial Analysis

Universal childcare is amongst the latest of government-funded programs which several Senators across America have started demanding. For instance, Senator...

Why do Investors Hold Fixed Income Securities?

The bond market is much larger in size as compared to the equity markets of the world. This is because...

Advantages and Disadvantages of Freely Floating Exchange Rates

The freely floating currency system is the predominant system of foreign exchange that is prevalent in the world today. As...

Circular References in Financial Modelling

A lot of financial modeling takes place in Microsoft Excel. One of the errors that financial modelers come across during...

Usage of Collateralized Debt Obligations (CDO) in Infrastructure Finance

Infrastructure finance is an extremely complicated and advanced field. There are many complex financial instruments related to infrastructure finance which...

What is Cost of Equity? – Meaning, Concept and Formula

Theoretical Concept The cost of equity concept is very important when it comes to valuing shares on the stock market....

Factors Affecting Selection of Sponsorship of Sports Event

In the previous few articles, we have already studied the pros and cons of sponsorship. However, we have come to...

Financial Modelling in Real Estate

Financial modeling has become an essential part of most real estate transactions today. This is because of the fact that...

Infrastructure Investments in Renewable Energy

When the word infrastructure project is used, it brings to mind images of bridges, railways, and even ports, which are...

Pension Funds and Cryptocurrencies

Pension funds typically cater to people investing for their retirement. When it comes to retirement planning, most people stay conservative....

Price to Sales Ratio – Formula, Meaning, Assumptions and Interpretation

Formula Price to Sales Ratio = Current Market Price / Reported Sales Revenue Many companies state their revenue after removing...

Restricted Stock Options (RSU’s)

In the previous article, we have already studied about option pools. We now know the various advantages that they offer...

Status Quo Bias

Making a choice can be an overwhelming process. This is particularly true if the person making a choice has to...

Structuring a Hedge Fund Business

A successful business is built before there is one. The way any business is structured has very long term implications...

Sustainable Growth Rate: Concept

We have studied the various discounted cash flow valuation models in this module. These different models need to be applied...

Sweeping – Meaning, Need and Types

We are already aware that commercial banks are offering several liquidity management services to their clients. In the previous article,...

What are STRIP Bonds?

STRIP is an acronym that is commonly used to denote Separate Trading of Registered Interest and Principal of securities. This...

What is Book Building – The Book Building Process

Whenever a company wants to sell its shares in the open market, it faces a very important question. The question...

What is Payback Period ?

We have earlier discussed the fact that Net present Value (NPV) is considered to be the gold standard when it...

Zero Based Budgeting System Using Envelopes

Budgeting is the start of all financial planning. Till a person is not able to take full control of their...

Why College Education Should Not Be Free?

President Ronald Raegan had once famously said that “Big government is not the solution to the problem. In fact, big...

Artificial Intelligence and Machine Learning in the Retail Sector

Artificial intelligence (AI) and machine learning (ML) are disrupting the entire business landscape across the globe. The retail industry is...

Asian Financial Crisis of 1997

The Asian financial crisis was another major currency crisis that happened during the 1990’s. The crisis assumed epic proportions. This...

Cashless Economy: Pros and Cons

Governments across the world have stepped up their fight against cash. Cash is being increasingly viewed as a curse that...

The Clearing House System

There is much more to the international financial system than what meets the eye. For instance, if you were to...

Cram Down in Bankruptcy Proceedings

Bankruptcy proceedings are often long drawn processes. The reason behind this is simple. If a company has to come out...

Dividend Yield Ratio – Formula, Meaning, Assumptions and Interpretation

Investors can be classified into types. The two predominant types are growth oriented investors and value oriented investors. Growth oriented...

Dutch Auction

Book building has been one of the most widely used methods in the underwriting process. However, over the years, companies...

What are Black Friday Sales and What are its Economic Impact on Retailers

The retail industry has been rapidly evolving for many years. The industry has adapted to a wide range of changes...

The Federal Wire System

What is the Fed Wire System? The Fed Wire system is a service that is offered by the Federal Reserve,...

The Concept of Financial Freedom

Every activity done by human beings is generally linked to a larger goal, a pursuit to achieve something important in...

How a Cram Up Works in Bankruptcy?

In most bankruptcy cases, senior classes of creditors have more power as compared to junior classes of creditors. This means...

What is Internal Rate of Return (IRR) ?

The Internal Rate of Return (IRR) is another very important metric that can be used to determine whether or not...

The Sinister Motive Behind Cashless Society

Cashless society is the latest buzzword in global finance. At the present moment, only 15% to 20% of the world’s...

Pension Funds and Private Equity Investments

Pension funds have always been considered to be conservative investors. This means that pension funds have generally been associated with...

Risks Associated with Sponsorship from Sponsor’s Perspective

We have already seen in the previous articles that the financial size of the global sponsorship market is increasing at...

Sample Size Neglect

Stock investments are supposed to be made based on rational choices. In this module, we have so far learned that...

Should the Government be an Equity Partner in Infrastructure Projects?

Every infrastructure project around the world needs one or more equity partners. This equity partner acts as an entrepreneur and...

What are Sustainability Bonds?

Finance and sustainable business practices have traditionally been considered to be separate fields. It was common for companies all over...

Veto Rights – Meaning and its Importance

The process of negotiations between startup companies and investors is often hotly debated and contested. There are several points of...

Vulture Funds: The Name Says It All

What Do Vulture Funds Do ? Countries and companies are in turmoil all the time. When entities are close to...

Sustainable Growth Rate and the Du-Pont Analysis (PRAT Model)

We now have a basic understanding of the concept of sustainable growth rate and how it related to the valuation...

Why is Excel Not the Best Tool for Financial Modelling?

Companies all across the world use financial modeling. As we have discussed in several articles in this module, financial modeling...

Automated Intercompany Loans

Liquidity management can be a big problem for several companies. This is particularly true if the company has a large...

Currency Wars: “Beggar Thy Neighbor” Policy

What is a Currency War ? A currency war is a situation wherein devaluation of currency by one country is...

Disadvantages of Black Friday Sales (Deep Discounting)

In the previous article, we have already seen what Black Friday sales or deeply discounted sales are. We also know...

Financial Benefits of Incubators

The use of incubators is fairly common in startup companies. Entrepreneurs across the world use the services offered by incubators....

The Financial Independence Retire Early (FIRE) Movement

In the previous article, we learned about financial freedom or financial independence. However, in the traditional financial planning world, financial...

Freely Falling Currencies

The freely floating currency system may have its advantages and disadvantages. However, it has fundamentally changed the way we look...

Lifecycle of Public Private Partnership (PPP) Projects

In the previous articles, we have undertaken careful consideration of how public-private partnership (PPP) projects work. A lot of details...

Multi Bank Cash Concentration

In the previous article, we studied about the concept of sweeping. We are now aware that commercial banks provide their...

Optimism Bias

The gist of optimism bias is often expressed by using the popular saying “rose-tinted glasses.” In real life, it is...

Pandemic Bonds

The recent coronavirus pandemic has fundamentally changed the way in which individuals, organizations, and even nations manage their finances. Most...

Pension Funds Vs. Mutual Funds

Pension funds are an investment vehicle that has a special focus on retirement. Many people think that pension funds and...

What is Prime Brokerage ?

History of Prime Brokerage The growth in the number of hedge funds as well as the scale of their operations...

Problems With Using Internal Rate of Return (IRR) for Investment Decision Making

In the past article we discussed about the concept of internal rate of return. We discussed how it could be...

Put Call Ratio – Formula, Meaning, Variations and Interpretation

The put call ratio is the only financial ratio that does not compare the current market price to any financial...

Risks Associated with Sponsorship from Sponsored Entity’s Perspective

In the previous article, we have already seen that sponsorship is not really a risk-free activity. We became aware of...

Spreadsheet Modeling: Dividend Discount Model

In the past few articles, we have studied about the various models that are available to help us predict the...

Structuring a Public Issue

One of the responsibilities of an investment banker is to set up the basic ground rules which will have to...

The SWIFT Network

We live in a technological age today and hence are afforded many conveniences which people in the prior generations did...

Testing the Financial Model

The creation of a financial model is like a project which has to be undertaken by the company. This means...

The War on Cash

Governments all over the world are fighting a war on cash. It is a known fact that the governments do...

The World without Bankruptcy Laws

Bankruptcy is one of the natural states which a company may find itself in. Entrepreneurship is primarily about taking risks....

Estimating Future Dividends

We have discussed various types of dividend payout models. We have discussed the Gordon growth model, the H model, one...

The Last Step: Handing Over the Financial Model

Financial models are complex projects which take months or even years to build. It also needs to be understood that...

Level Based Sponsorship (Tiered Sponsorship)

In the previous articles, we have already seen what sponsorship is and what are the various advantages and disadvantages which...

Introduction to Liquidity Ratios

Liquidity can be defined as the ability of a firm to make good its short term obligations. Most businesses function...

Municipal Bonds

We already know that bonds are issued by a wide variety of entities. Bonds are routinely issued by corporations, banks,...

Omnichannel Retailing and its Benefits

The past few years have witnessed the rise of online retail. As a result, there has been a persistent debate...

Payment Mechanisms in Public-Private Partnerships

In every public-private partnership, it is the job of the public party to provide remuneration to the private party. There...

The “Rich Dad Poor Dad” Philosophy

The domain of personal finance is exceptionally wide. There are lots of experts who have differing opinions, who coexist in...

Stress Testing to Manage Risks in Financial Institutions

What is Stress Testing? Stress testing is a type of simulation model which is used to manage risks in banks...

Swingline Loans – Meaning, Need and Its Alternatives

In the previous articles, we have seen the various non-lending-related commercial banking products which are offered by banks. However, at...

Types of Bankruptcy Frauds

In the previous article, we have learned about how corporations use bankruptcy as a strategic tool. However, it is important...

What are Unicorns?

In our day-to-day life, we often use the term unicorn to refer to a mythical horse-like creature. In the year...

Investment Banking Issues: Why Do IPOs Get Underpriced?

Every year investment bankers help several companies raise capital from the markets. They help these companies in issuing securities and...

What is Algorithmic Trading ?

Algorithmic trading was considered to be a bookish concept developed by geeks. Less than a decade ago, mainstream traders at...

Asset Reconstruction Companies

The Indian banking system is reeling under a glut of Non Performing Assets (NPA’s). The unpaid debts of Indian corporations...

Black Wednesday of 1992: The Day the Pound Sterling Came Under Attack

The Black Wednesday of 1992 refers to the momentous day when the British Pound was under attack by currency speculators....

Capital Rationing and Profitability Index

In the previous few articles we have come across different metrics that can be used to choose amongst competing projects....

Challenges Facing Pension Fund Governance

Pension funds are large investment funds that control trillions of dollars worth of investments worldwide. Pension funds exist in almost...

Cognitive Dissonance Bias

All investors have pre-existing beliefs about the way investment markets work. These beliefs are often deep-rooted and subconscious. For example,...

Disadvantages of Omnichannel Retailing

In the previous article, we have explained the concept of omnichannel retailing. We have also seen how it is different...

Extrapolation: The Root Cause behind the Bubbles

They say that there is no smoke without fire. This is true of many things and one of them is...

Why Is Free Cash Flow Approach Better Than Dividend Discount Models?

The dividend discount models assume that the investors have no control over the payout policy of the firm whatsoever. This...

The Green Shoe Option in Investment Banking

In many cases, IPOs are thought of as being underpriced. This means that as soon as the IPO is listed...

Home Country Bias

The activities of most investors have historically been limited to their home country. This is largely because earlier, there were...

Issues With Sponsorship Levels

In the previous article, we have already seen what sponsorship tiers or sponsorship levels are. We have also seen the...

Lockbox Service Provided by Banks

What is a Lockbox ? Lockbox is an additional service provided by banks in the United States. This service allows...

The Mexican Currency Crisis (Tequila Crisis) of 1994

The Mexican peso crisis, which is also known as the tequila crisis was one of the first major currency crisis...

The Pay Yourself First Principle

Millions of well-intentioned people around the world try to save and invest money every month but fail. They are consistently...

Pension Funds and Real Estate

We are already aware that pension funds control a significant amount of investment funds across the world. The total amount...

The Quasi-Government Sector

In most parts of the world, the financial system can be divided into two parts viz. the private sector and...

Types of Capital Rationing

As discussed in the previous article, capital rationing is a form of capital budgeting. In capital rationing we change the...

What are Eurobonds?

The Eurobond market is one of the largest debt markets in the world. It comprises a large portion of the...

Why Startup Companies are Staying Private?

Once upon a time, a successful IPO was considered to be a transition point for a startup company to be...

How to Incorporate Ethical and Social Elements in Financial Modelling

What is Financial Modelling and how it is extremely critical for High Finance In the world of banking and high...

Adjustment Mechanisms in Publich-Private Partnership (PPP) Contracts

A contract is said to be well formed if it is able to cover all the possibilities and provide guidance...

Advantages and Disadvantages of Swingline Loans

In the previous article, we have already studied what Swingline loans are. We now know that such loans are different...

Current Ratio – Formula, Meaning, Assumptions and Interpretations

The current ratio is the most popularly used metric to gauge the short term solvency of a company. This article...

Evaluating the Effectiveness of Sports Sponsorships

In the previous article, we have already seen how multinational companies spend large sums of money in order to buy...

Free Cash Flow to the Firm vs. Free Cash Flow to Equity

Free cash flow models can be further categorized into two types. There are certain kinds of models which pertain to...

Housing Finance

The purpose of financial resources is to mobilize savings. In most cases, these savings are generated by households and are...

Investment Banking and Delisting

It is common knowledge that investment bankers help a company when they want to list their shares on the stock...

Merchant Cash Advance

The commercial banking system has undergone a high deal of innovation in the past few years. A lot of new...

Pension Funds and the Use of Derivatives

Pension funds across the world are meant to be low-risk financial instruments. They are allowed to take slightly more risks...

Personal Finance Lessons from Rich Dad Poor Dad

Most of the lessons taught in the “Rich Dad Poor Dad” book series are somewhat unique. This is because the...

Quick Ratio – Meaning, Formula and Assumptions

The quick ratio is a variation of the current ratio. However, a quick ratio is considered by many to be...

Retail Inventory Method (RIM)

Inventory is a very important part of the retail business. This is because the stock which retail stores hold on...

The South Sea Bubble

The South Sea Bubble is one of the largest asset bubbles that the world has ever seen. In fact, this...

Treasury Operations of Banks

Modern banks are huge entities employing thousands of people in their workforce. However, amongst the various departments present at banks,...

Why Unicorn Companies Fail?

Startup companies typically have a high failure rate. It is said that 90% of all startup companies fail. The percentage...

Yield To Maturity (YTM)

Yield to maturity is a fundamental concept which every bond investor must be aware of. The term yield to maturity...

Early Termination of a Public Private Partnership

Public private partnership is a widely used model when it comes to infrastructure financing. However, it needs to be understood...

Why Do Mutual Funds Lend To Promoters?

After the banking crisis, the Indian capital markets are facing another dire situation. It has recently come to light that...

Availability Bias in Behavioural Investing

All of us have seen movies or have read novels wherein there are several witnesses who are describing the same...

Capital Controls: Meaning, Types, Benefits and Downside

What are Capital Controls ? Capital controls are when the governments of nations restrict the inflow and outflow of capital...

Estate Planning in Personal Finance

The goal of personal finance is to accumulate wealth and then disseminate it at the right time in order to...

Estimating Project Cash Flows: Part 1

Prima facie, capital budgeting may seem like a very simple task. After all, it has just 3 steps. The first...

Factors to Consider While Using the Retail Inventory Method

The retail inventory method is used by retail corporations across the globe to obtain a rough estimate of the ending...

Source of Revenue: Fantasy Sports Leagues

We already know that sports leagues have several sources of revenue. Some of these sources have been continuing for a...

Hire Purchase Agreements

Buying Assets on Installments A hire purchase agreement is a particular type of agreement between a buyer and seller. The...

Junk Bonds in Investment Banking

Investment bankers help their clients raise money by selling equity as well as bond securities on the securities markets. Investors...

Pension Funds and Infrastructure Sector

Infrastructure funding can be very important for any economy. This is the reason that governments all over the world want...

Pros and Cons of Merchant Cash Advance

In the previous article, we understood what a merchant cash advance is. We also understood the two types of merchant...

Calculating Free Cash Flow to Firm: Method #1 (Contd): Treatment of Fixed Capital Expenditure

In the previous article we learned that free cash flow to the firm is closely related to the concept of...

Tulip Mania of the 17th Century

Asset bubbles have always been a testimony to the bizarre things that humans can accomplish when they abandon their own...

Yield to Call

In the previous articles, we have studied the concept of yield to maturity. We now know how to calculate the...

Importance of Market Data in Financial Markets

Financial markets move on the basis of data. If one party consistently receives information faster than the others, then the...

The Bias Blind Spot

We are now aware of the fact that investment markets are not driven by mathematical decisions alone. They are heavily...

Building a Startup Team

When people think about how startup founders invest their time, most of them think about dealing with investors or managing...

Cash Ratio – Meaning, Formula and Assumptions

The cash ratio is limited in its usefulness to investors and financial analysts. It is the least popular of the...

Estimating Project Cash Flows: Part 2

We have seen in the previous article that estimating cash flows can be quite confusing and counterintuitive. This is not...

How Cash Flow Impacts the Retail Business

The retail business is inherently a cash flow positive business. This is generally because of the fact that retailers are...

Merger Arbitrage in Investment Banking

In the past few years, the number of mergers and acquisitions has increased drastically. This can partially be attributed to...

The Narrative Fallacy

In an ideal world, investors are supposed to look only at cold hard facts and analyze them while making an...

What is Negative Working Capital ?

Traditional financial analysts would consider a negative working capital i.e. having more current liabilities than current assets, a sign of...

Pension Funds and Systemic Risks

Systemic risks received a lot of media attention after the 2008 financial crisis. The world realized that the failure of...

Spanish Property Bubble of 2008

Spain’s economy has been in an unprecedented decline since 2008. The average Spaniard found himself unemployed and had a huge...

United States and the Curse of Predatory Lending

Predatory Lending, also colloquially known as loan sharking is a bad business model. This business has always been run by...

Bootstrapping: Meaning and its Advantages

Modern startup enterprises seem to be focused on the media hype. The focus of the entrepreneurs is to raise enough...

Inverted Yield Curve

Most investors across the world are aware of the fact that yield curves are generally upward sloping. This is because,...

7 Personal Finance Mistakes to Avoid

In this entire module on personal finance, we have written several articles on steps that need to be taken to...

Advantages of Non-Interest Income

Over the years, corporate banking has become a very important part of the overall banking system. This is because of...

Benefits of Fantasy Sports Leagues

In the previous article, we have already seen what fantasy sports leagues are. We also know why sports leagues across...

Calculating Free Cash Flow to the Firm: Method #2: Cash Flow From Operations

Now, it’s time to move on to the second metric which can be used to derive the free cash flow...

Direct Public Offerings: Threat to Investment Banking

The costs of issuing an initial public offer can be prohibitive. There are many companies across the world that want...

Disadvantages of Bootstrapping

In the previous article, we have learned about what self-financing i.e. bootstrapping is. We have also learned about what are...

Disadvantages of Non-Interest Income

In the previous article, we learned about the non-interest income at various commercial banks. We have also understood what these...

Calculating Free Cash Flow to Firm: Method 3: EBIT

In the previous articles, we learned about how to calculate the cash flow from operations if the cash flow statement...

Estimating Project Cash Flows: Part 3

Continuing from the previous two articles, we will look at some more counterintuitive steps that need to be taken to...

Fundamental Principles of Pension Fund Risk Management

Pension funds are amongst the most heavily supervised financial instruments in the world. This is because of the fact that...

The Planning Fallacy

Investors are used to looking at projections of future events. They commonly use projections about future cash flows, future profits,...

Poseidon Bubble in the Australian Stock Market

Nickel Shortage During the 1970’s, nickel was in extremely short supply in the world. This is because Canada was the...

Root Causes of Inadequate Cash Flow in the Retail Sector

In the previous articles, we have already seen how important cash flow is for the retail sector. We have also...

Source of Revenue: Sports Merchandising

In the previous few articles, we have already seen that sports leagues are able to generate a huge amount of...

Introduction to Turnover Ratios

Turnover ratios (also known as efficiency ratios) are a very important class of ratios. These ratios are not only used...

China’s Predatory Lending

The Chinese government has a bad reputation when it comes to finances. Most countries including the developed ones like the...

Fin Tech: The Future of Banking

It’s hard to read a newspaper and not see any Fintech company being mentioned. The Fintech revolution has taken center...

Investment Banks and Governments

Governments all over the world regularly engage in high-value financial transactions. They often need the help of experts in order...

Issues With Merchandising

In the previous article, we have already studied what merchandising is. We now know why it is an important source...

Managing Money Laundering Risks in Commercial Banks

Up until now, we have seen various ways in which commercial banks are able to serve their corporate clients. Almost...

Revenue Based Financing

The manner in which startup companies obtain their financing can have a very large impact on the future of their...

Risk-Based Supervision of Pension Funds

The number of pension funds, as well as the amount of money being managed by these funds, is increasing exponentially...

Accounts Receivable Turnover Ratio

Accounts receivable are a very important part of the current assets of any business. Like inventory, accounts receivable are considered...

Base Rate Fallacy

The human mind is riddled with several fallacies. When human beings make investment decisions, they are battling a wide variety...

Bernie Madoff Scandal

The Bernie Madoff scandal was a story of a $50 billion embezzlement and Ponzi scheme run by Madoff Securities LLC....

Calculating Free Cash Flow to Equity

We studied the different methods to calculate the free cash flow to the firm (FCFF) in the previous articles. In...

Capital Budgeting and the Treatment of Inflation

Forecasts Spread Over a Period of Time Inflation is an ever persistent condition in today’s economy. The purchasing power of...

Cost Saving Tips for Retailers

The financial environment in the retail industry is extremely competitive. This means that retailers are always under pressure from their...

The Dot Com Bubble of 2001

The new age high tech generation may seem to be immune to market inefficiencies of the past. They may seem...

Financial Impact of Returns on Retail Policy

Most of the players in the online as well as offline retail industry have a clearly defined retail policy. It...

How are Organizational Aspects of Sports Leagues Linked to Finance

There are various types of sporting leagues across the world. These leagues cater to different sports in different parts of...

How Risk-Based Supervision System Works?

In the previous article, we have already studied what risk-based supervision is. We now know why regulatory bodies all across...

How Technology has been a Game Changer for the Banking and Financial Services Sectors

How Technology is a Game Changer for the BFSI Sector It would be an understatement to say that technology has...

The Pitfalls of Overvaluation

It is often believed that the role of the investment banker is to sell the company for the highest price....

Accounts Payable Turnover Ratio

Just like accounts receivable turnover ratio show the financing that the firm is providing to its buyers interest free, the...

Anti-Money Laundering Activities at Commercial Banks

In the previous article, we have already seen how commercial banks inadvertently help anti-social elements in laundering money. We have...

Capital Budgeting and Depreciation

Depreciation is an important concept in capital budgeting. This is because it is a non cash expense and ideally should...

Calculating Free Cash Flows: The Case of Preferred Shares

In the previous few articles we understood how to calculate free cash flows which accrue to the firm as a...

Contrarian Investing

The rise of behavioral finance has led to several new strategies being floated in the financial world. Contrarian investing is...

Convertible Notes and Startup Funding

Startup firms usually receive their funding in the form of debt or equity. Some newer ways of providing funding to...

Changes in Financing Policy: Effect on Free Cash Flow

While valuing firms, free cash flow has to be calculated over a number of years. Hence, there is a good...

Equivalent Annual Costs

In the previous articles we have seen how we can convert a possible future stream of cash flows to its...

The Harshad Mehta Scam in India (1992)

Harshad Mehta was the son of a peon. He was born in abject poverty and when he migrated to Mumbai,...

How Investment Bankers Help Promoters Retain Control?

Companies want to go public because it helps them raise cash, which can be used for further expansion. However, the...

How to Reduce Return Rates in Retail?

In the previous article, we have already seen that the return policy offered by a retailer can deeply influence their...

How to Use Accounts Payable Turnover Ratio to Bargain with Buyers

It is a myth that financial ratios are to be used only by investors and analysts in deriving a fair...

The Mega Scam in the Indian Banking System

Indian banking sector is divided into two. There are public sector banks, and then there are private sector banks. The...

The Optimal Size of a Sports League

There are a large number of sporting leagues around the world. However, when we study all the leagues, we find...

Pros and Cons of Convertible Notes

In the previous article, we studied what convertible notes are and how they are used in the context of financing...

Subscription-Based Corporate Banking Business

Banking services in general and corporate banking, in particular, have witnessed a lot of innovation in the past few years....

Challenges of Risk-Based Supervisory System

In the previous articles, we have studied what a risk-based supervisory system for pension funds is. We have also studied...

Cultural Influences on Financial Decisions

The financial decisions made by an investor are actually influenced by several factors that are present in their thought process....

Fixed Asset Turnover Ratio

Fixed assets i.e. property, plant and equipment represent the single largest investment any company makes in its operations. It is...

Global Initial Public Offers

Ever since the era of globalization, the world has started operating like one single market. The concept of a global...

The Ketan Parekh Scam

The Ketan Parekh scam was the second most important scam that rocked the Bombay Stock Exchange after the Harshad Mehta...

Privatization of India’s Public Sector Banks

The Indian banking sector is facing a crisis on an unprecedented scale. The problem becomes peculiar when more facts are...

Separation of Investing and Financing Decisions

We have already seen that there are a lot of differences that arise between what we have learned in accounting...

Simple Agreement for Future Equity (SAFE)

In the previous articles, we have discussed the concept of convertible notes. We have also seen the various pros and...

Single Stage FCFF Model

We now have a fair understanding of what the concepts of free cash flow to the firm is. We also...

Types of Return Policies

As mentioned in previous articles, return policies can be very important from a consumer’s point of view. There have been...

Why are Professional Sports Franchises Increasing in Value?

The sports business has traditionally not been a very lucrative one. It was common for the valuation of sports franchises...

Advantages of Subscription-Based Banking

Commercial banks were first hesitant to adopt a subscription-based revenue model. This is because it was widely believed that such...

Behavioral Life Cycle Theory

There have been many economic theories developed in order to understand how and why human beings save and spend their...

The Chinese Pension System

There has no doubt about the fact that the Chinese economy is one of the largest economies in the world...

Disadvantages of Subscription-Based Banking

In the previous articles, we have learned about what subscription-based banking is. We also know the various advantages that this...

Getting Creative with Capital Budgeting

From the past few articles, it may seem like capital budgeting has a pre-determined procedure. All the possible scenarios that...

Inventory Turnover Ratio – Meaning, Formula and Interpretation

A company is said to be more efficient when it keeps the least inventory on hand to make the sales...

Investment Banking and Special Purpose Acquisition Companies (SPACs)

Special Purpose Acquisition Companies (SPAC) have become all the rage in the investment banking industry. They are not a new...

Keep It Simple Securities (KISS)

In the previous article, we have studied about the concept of Simple Agreement for Future Equities (SAFE). However, it is...

The Rise of Resale in the Retail Sector

The retail sector has generally been engaged with buying and selling of new goods. This has been the case across...

Savings and Loan Crisis in the United States (1980’s)

The United States banking industry and the economy in general was rocked by the Savings and Loans crisis in the...

Single Stage FCFF Model to Equity Valuation

Just like we have the single stage Free Cash Flow to the Firm (FCFF) model, we also have the Free...

Use of Price to Revenue Ratio in Valuing Sports Franchises

The valuation of a sports franchise is a very difficult task. This is because a lot of the rules that...

The Barnewall Model

The traditional financial theory assumes that all investors are rational. Hence, they believe that all investors will reach the exact...

Case Study of the Indian Banking and Financial Services Industry using Strategic Tools

Finance is like Oil to the Engine of the Indian Economy As finance is the grease and the oil that...

Challenges Faced by the Chinese Pension System

In the previous article, we have already studied about the peculiarities of the Chinese pension system. We are now aware...

Factors Impacting the Valuation of a Sports Franchise

Sports franchises are also business entities just like other private companies. Hence, it is possible for the owners of these...

The Failure of Long Term Capital Management (LTCM)

For centuries, men have held the ambition to be able to beat the market consistently. Year after year many traders...

The Fallacy of Creative Destruction

There is a widely held view that creative destruction is the cause of all business cycles. This explanation is used...

Financial Ratios in the Retail Industry

The retail industry has become highly competitive. However, at the same time, the retail industry has also become quite data...

How dire is India’s bad debts problem and what you need to know about it

How Dire is the Bad Debts Problem in Indian Banks In recent months, the news reports about India’s bad debts...

Role of Investment Bankers in Derivatives Market

The derivatives department is a highly specialized department in the modern-day investment bank. This is because, in terms of size,...

Series A Funding

Startup funding is not a one-time activity. Instead, it is a long-drawn process that encompasses many years in the initial...

Variations in Cash Flow Models

We are now aware of how to use the basic single stage models for both free cash flow to the...

Why Pension Funds Should Not be Allowed to Invest in Equity?

Traditionally, pension funds were averse to equity investments. However, over the years, pension funds have been steadily pouring money into...

Working Capital to Sales Ratio – Meaning, Formula, Assumptions and Interpretation

Formula Working Capital to Sales Ratio = Working Capital / Sales Meaning Stating the working capital as an absolute figure...

Artificial Intelligence in Commercial Bank Lending

We have already seen the various ways in which technology has shaped the commercial banking domain. However, the commercial banking...

Bielard, Biel and Kaiser (BBK) Model

The main criticism of the Barnewall model was that it only classified investors into two types. This created an oversimplification....

Disadvantages of Artificial Intelligence in Commercial Banking

In the previous articles, we have already seen what artificial intelligence is and how it can be applied in commercial...

Income Approach to Valuation of Sports Franchises

From the previous articles, we now know that sports franchises across the world are now being viewed as commercial entities....

Interest Rates and Their Effect on Small Businesses

Predicting future interest rate movements is not only important for traders who invest in financial markets. Instead, it is also...

Liability Driven Investing

In the previous articles, we have already studied the difference between defined benefit plans and defined contribution plans. We now...

Introduction to Profitability Ratios

The ultimate aim of all business is to generate profit. That is what the investors invest for, management plans for...

Puerto Rico: The Greece within America

The high indebtedness of the United States of America is well known. However, USA is still considered to be an...

Series B Funding

In the previous articles, we have already learned about the seed funding stage as well as the series A funding...

Three Dimensional Pscychographic Model

Psychographic models have evolved over the ages. They first began with the Bernwall model, which was a one-dimensional model. It...

Equity Crowdfunding

The Shortcomings of an IPO The initial public offer model works well for big companies. However, as far as smaller...

How to Value Companies like Netflix?

Netflix is one of the largest providers of content in the world. This is amazing given the fact that content...

Companys Risk vs. Project Risk

In the past module, we concentrated on calculating the returns part of the project. All our articles were focused on...

Customer Footfall Analysis

The retail sector has started using data and analytics in a big way. In general, data and analytics is used...

Deutsche Bank: The Fall of a Giant

The European banking system has been in a bit of a crisis in the last few years. Major European banks...

Valuation of Sports Franchises: Discount Rate Calculation

In the previous article, we have already seen how the valuation of a sporting franchise can be found using the...

How Governments around the World are Bankrupting Future Generations for Present Consumption

The Debt Bomb and its Implications The world is in crisis and one of the reasons for that is the...

Israel Economic Crisis: 1983

The Israeli bank crisis of 1983 rocked the Middle Eastern financial world. The Israeli economy was believed to be strong...

Pension Funds and Income Redistribution

The purpose of pension funds is to ensure that the wealth created by an individual is invested and distributed in...

Series C Financing

In the previous articles, we have already learned that businesses do not raise all the funds that they need to...

Use Cases of Artificial Intelligence in Commercial Banking

In a previous couple of articles, we have already seen how artificial intelligence is useful in the field of commercial...

Dividend Discount Models: Some Points to Consider

Dividend discount models are amongst the oldest category of valuation models that have been used by the market. However, there...

Categorizing Behavioral Biases

The field of behavioral finance has become fairly developed over the years. There have been many psychologists as well as...

What are Common Size Statements ?

Common size statements are not financial ratios. Rather they are a way of presenting financial statements that makes them more...

Will The Fiat Money System Collapse?

In 1971, Richard Nixon single-handedly took the world off the gold standard. Ever since, many commentators have been of the...

Gender Gap in Pension Systems

The gender gap in pension systems around the world is a very real and pressing issue. Numerous studies have been...

How Do Funds Transfer Systems Work

Domestic Funds Transfer It is common for individuals and entities to transfer funds to their friends, family, business partners, and...

Issues in Determining Discount Rate for Valuation of Sports Franchises

In the previous article, we have already understood the method used for deriving the discount rate which is used while...

The Nordic Crisis of 1992

The Nordic crisis of 1992 refers to the series of bank runs and currency crisis that shook Finland, Sweden as...

What are Profit Margins ?

The untrained investor uses profit and profit margin interchangeably. This is not technically correct. The difference may be minor but...

Venture Debt in Startup Funding

Whenever the subject of startup funding is mentioned, the audience automatically assumes that equity investments are being discussed. This is...

Why Blockchain May Not be Suitable for Commercial Banking?

As far as technology enthusiasts are concerned, blockchain is the most important invention since the wheel! It is very easy...

Lessons Learned in Behavioural Finance

In the past few articles, we have studied about how behavioral finance impacts financial markets more than one might believe....

Demystifying the Mysterious, Glamorous, and Demanding World of Investment Banking

The Lure of Investment Banking and Why is it so for Management Practitioners All aspiring management students as well as...

The Importance of KYC (Know Your Customer) Norms and Procedures in Banking

Follow the Money Trail In recent months, there has been a spate of disclosures around the world about how banks...

The Latvian Crisis: A Short History

Latvia is a small country nestles in Eastern Europe. Nothing from this country seemed remarkable to the global financial world...

Open Banking – Meaning, Need, Advantages and Disadvantages

The field of commercial banking is undergoing many technological changes simultaneously. Open banking is one such technological change. Open banking...

Pros and Cons of Venture Debt

In the previous article, we have already studied about the concept of venture debt. We know that venture debt can...

Return on Assets (ROA) – Meaning, Formula, Assumptions and Interpretation

Another metric that is widely used by investors to gauge the profitability of a company is Return on Assets (ROA)....

Valuation of Sports Franchise: Replacement Cost Approach

In the previous few articles, we have already come across the income-based approaches that are used in order to value...

Assumptions in Pension Fund Accounting

Accounting for pension funds is considered to be much more complex than standard accounting. This is because a lot of...

Difference between Corporate, Retail, Investment Banking, and Private Banking

The Difference between Retail, Corporate, and Investment Banking Most of us when dealing with banks usually walk into the branch...

Indian Banking Sector: Inter-Creditor Pacts

The Indian banking sector has seen a sudden increase in the number of bad loans. Several of these bad loans...

John Law and the Mississippi Bubble

The Mississippi bubble is one of the biggest asset bubbles known to the modern world. This bubble first led France...

Replacement Cost Approach Advantages and Disadvantages

In the previous article, we have already witnessed what replacement cost theory is and how it can be used to...

Return on Equity (ROE) – Meaning, Formula, Assumptions and Interpretation

Return on Equity (ROE) is probably the most important number in the financial universe. Every company is driven by profit...

What is Venture Leasing? – Advantages and Disadvantages

In the previous few articles, we have already learned about how venture capital and venture debt work. We now also...

Pension Obligation Bonds

Pension funds across the world are facing a significant financial crisis. This is because, for a very long time, they...

Banking as a Service

Technological innovations are having a huge impact on the commercial banking industry. Many parts of the commercial banking business are...

The End of the Dollar Hegemony

The dollar today is the uncrowned king of the financial world. This means that the dollar does not face much...

The Freemium Model – Different Types of Freemium Models

In the modern world, more and more start-ups are selling products and services related to information technology. These companies either...

Impact of Geography on Banking and its Functions

Why Geography matters for Banking With the world economy being integrated and interconnected due to the process of globalization, the...

Three Layers of Banking as a Service

The concept of banking as a service is revolutionary. This is because banking as a service is a mechanism using...

Valuation of a Sports Franchise: Market Approach

In the previous articles, we have already come across a couple of methods used for the valuation of a sports...

Pension Fund Governance Structure and its Need

Since pension funds manage assets worth billions or even trillions of dollars. This means that it is crucial to create...

Return on Invested Capital (ROIC)

Return on Invested Capital (ROIC) is another popular metric that is used widely in financial analysis. The reason for its...

Why Should Central Banks Be Independent?

Last month Donald Trump fueled a debate when he called the Fed “crazy.” Political accusations started flying all across the...

The Downfall of Chanda Kocchar – India’s Rockstar Woman CEO

The ICICI bank is the largest private sector bank in India. It was also famous for being one of the...

Functions of a Central Bank in Modern Economies

A central bank is an institution that is mandated by constitutional decree to function along certain principles and entrusted with...

How Team Performance Affects Valuation?

Sporting franchises are often said to be confused about what their objectives should be. One chain of thought believes that...

Pros and Cons of Freemium Model

In the previous article, we have already learned what a freemium business model is. We now know that this model...

Why Devaluing the Currency is a Bad Idea?

The European economy is facing a significant downturn. There is a looming financial crisis in Europe which has been caused...

Advantages of Banking as a Service

In the previous articles, we have already studied open banking as well as banking as a service. Many people tend...

Disadvantages of Banking as a Service

Banking as a service is set to transform the commercial banking industry. It is the latest buzzword in the commercial...

Issues With the Valuation of Sports Franchises

The valuation of sports franchises is often quoted widely in the public domain. This is generally done based on the...

Lease Rental Discounting

Many corporations and individuals earn a significant portion of their income from rents that they derive from their immovable properties....

Scalability and Startups

Scalability is considered to be a very important factor in any start-up company. Investors all over the world are highly...

BB&T and Sun Trust Bank Merger

BBT and Sun Trust bank are both giant institutions in their own right. However, now since they have decided to...

What is Causing the Bitcoin Boom?

It is true that cryptocurrencies have been gaining more acceptances all over the world. As a result, the rise of...

The Deutsche Bank Commerzbank Merger

Deutsche Bank which, which was once a dominant German financial institution has now become extremely fragile. This German bank managed...

Digital Onboarding in Commercial Banking

Commercial banking has traditionally been slow to adopt the latest technology. However, over the past few years, commercial banks have...

Impact of Technology on Sporting Finance

The sporting industry has undergone a lot of changes in the recent past. These changes have been related to various...

Lending Against Intangible Assets

Business and personal lending is dominated by tangible assets. The simple reason behind this is that they make good collateral....

Pros and Cons of Scalable Business Models

Scalable business models are the latest buzzword in entrepreneurial circles all across the world. Most new-age founders aspire to make...

The Big Fat Bitcoin Bubble

If you are an investor who is even remotely connected to financial markets, the odds are that you have heard...

Gold vs. Bitcoin

Gold has always been the alternative asset class. Whenever people lose faith in the value of the stocks that they...

The Inherent Conflict of Interest in Interest Rates Determination

The global financial system is not perfect by any means. However, most of the imperfections seem to be minor. As...

Real Reasons behind FDI in Retail in India

A couple of years ago India as a country, was facing a huge divide. The government of India had passed...

Revenue From Releasing Players for International Tournaments

Professional sports athletes play for certain sports franchises throughout the year. However, these same players also represent their nation when...

4 Driving Factors for Sustainable Corporate Banking

Commercial or corporate banking has undergone a sea of change in the recent past. All these changes have not been...

Why Do Start-ups Fail After Receiving Funding?

It is common knowledge in the investing world that almost 90% of the start-up companies which come into existence shut...

Private Equity Investments in the Sports World

Sporting franchises across the world have traditionally been owned by wealthy individuals. This has largely been because of the fact...

The Problem with Having Bitcoin Futures

Bitcoin futures have been introduced on the Chicago Mercantile Exchange (CME) and Chicago Board Options Exchange (CBOE) from December 10,...

The Problem with Postal Banking

Veteran American Senator Bernie Sanders, as well as Alexandria Ocasio-Cortez, who has now become the voice of the Democrats, are...

Pros and Cons of Going Public

The decision to take a company public is a huge one. When a company gets listed on an exchange, it...

Start-ups and Arbitration

Entrepreneurs who start up new companies have to deal with a lot of different types of stakeholders. As a result,...

Challenges Faced by Commercial Banks

Commercial banking has been around for a very long time. Ever since the birth of corporations more than three centuries...

Disadvantages of Private Equity Investment in Sporting Franchises

In the previous article, we have already seen that private equity firms are making a beeline in order to invest...

Straight Through Processing in Commercial Lending

Commercial banks all over the world have been forced to adapt to increasing changes in technology. This is because technological...

Traditional Bonds vs. Islamic Bonds Called “Sukuk”

The word Sukuk is an Arabic word which means certificate. These are certificates which are offered by corporations and governments...

The Wells Fargo Auto Insurance Scandal

Wells Fargo is one of the largest banks in the United States. However, of late, it has also become one...

What is a Revenue Model?

Modern-day start-ups can be of many different types. They can be differentiated on the basis of several parameters. One of...

Benefits of Delaying Profitability

Profitability was always the core reason behind the existence of a company. For many businesses it still is. There is...

How Decisions Made By Central Banks Affect the Stock Market?

In the past month, the Dow Jones Industrial Average had seen a spectacular fall. The market had crashed more than...

Understanding Investor Focus on Burn Rate

Burn rate is a metric that is specific to the start-up world. On the one hand, most of the financial...

What is FinTech and How it Enables Banking and Financial Firms to Leverage Technology

What is FinTech and how is it a Game Changer for BFSI firms? Anybody with a passing curiosity about the...

Why Do Corporations Get Away With Tax Avoidance ?

Some of the well-paid engineers in companies like Amazon pay about 45% of their income in taxes. They do so...

Why do Sporting Franchises Lease Out Stadiums?

Almost every sporting franchise needs a stadium or a venue in order to play professionally. This is because the team...

Benefits and Drawbacks of Straight-Through Processing

In the previous article, we have already seen what straight-through processing is and how it is different from the usual...

How Investors Evaluate Start-up Ideas?

A lot of people are of the opinion that obtaining venture funding can be very difficult for a startup business....

Multi-Banking: Meaning and Characteristics

The commercial banking industry is undergoing a rapid transformation. This transformation has been enabled by the increasing use of digital...

The Panaya Acquisition

If mere numbers are considered, Panaya is a small blip on the radar of the global Information technology behemoth Infosys....

The Silicon Valley Bank Collapse: Why Is It Important?

In the second week of March 2023, the Silicon Valley Bank, which is headquartered in Santa Clara California collapsed in...

Accounting for Stadium Leases

In the previous article, we have already established that there are many sporting franchises across the world that prefer to...

Are We In A Stock Market Bubble?

2017 has been an exceptional year for stock markets across the world. The start of 2018 has been no different...

The Flipkart and Wal-Mart Alliance

Flipkart is amongst the largest unicorns in the Indian startup ecosystem. Wal-Mart is a known international retailer with revenues upwards...

Government Regulations Which Impact Start-Ups

Start-ups are private entities. It is true that start-ups thrive because of the resourcefulness and innovation of the people behind...

Impact of the Fall of Silicon Valley Bank

The Silicon Valley Bank collapse has the potential to be a turning point in the way the modern financial system...

Pros and Cons of Multi-Banking

In the previous article, we have already seen what multi-banking is. We are now aware of how multi-banking is an...

Lease Accounting: Right of Use Asset

In the previous couple of articles, we have already seen that sporting franchises prefer to lease out stadiums instead of...

Why Does the Stock Market Crash?

February 2018 has been a bad month for the United States stock market. In just two consecutive trading days, the...

Hard Brexit vs. Soft Brexit

The British government has held a referendum wherein the majority of British citizens voted to leave the European Union. This...

Initial Coin Offerings: A Primer

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Neo Banks and Commercial Banking

Traditionally, the commercial banking industry was largely controlled by commercial banks which had a huge brick-and-mortar presence. However, over the...

Rising Interest Rates: The Perfect Storm for The Silicon Valley Bank

Bank failures are complex events that are the result of many underlying factors. When the history of any bank failure...

Public-Private Partnership in Stadium Financing

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What is a Start-up Accelerator?

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Managing the Operational Metrics of a Startup

Founders spend a lot of their time trying to understand how to deal with potential investors. They try to understand...

Poor Risk Management at the Silicon Valley Bank

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Pros and Cons of Neo Banks

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What is Blockchain, Why is it so Popular, and Benefits and Challenges of Using it

What is Blockchain and what is a Distributed Ledger? Not a day goes by without a media report on how...

What are Demergers: Its Pros and Cons

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Advantages of Public Private Partnership Model

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Different Types of Investors

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How Does The Failure of Silicon Valley Bank Affect Stakeholders

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Risks in Public-Private Partnerships

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Benefits of a Holding Company

The holding company-subsidiary company corporate structure is extremely popular all across the world. All large companies serve as holding companies....

Commercial Banks and Branch Banking

The business model behind commercial banking practice has completely changed over the years. Earlier, commercial banks were heavily dependent upon...

Cryptocurrencies and Taxation

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Is this the Longest Bull Market in History?

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The Role of Bridge Banking in The Silicon Valley Bank Crisis

The Silicon Valley Bank ceased to exist when it was declared bankrupt after a bank run. At this point in...

The Economics of Lawsuits

The United States of America takes pride in its judicial system. According to most American economists, the judicial system of...

The Founder’s Dilemma – Startup Finance

Entrepreneurship is all about making decisions in the face of uncertainty. Entrepreneurship involves beginning a journey that the founder does...

What is Sports Tourism?

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Types of Risks in Commercial Banking

Banking activity is generally considered to be risky. Banks earn money by borrowing money from people and then lending them...

Investing in Unlisted Companies

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Technology Risks In Commercial Banking: KfW Bank Case Study

The speed at which commercial banking is being automated is astounding. The automation process is about two decades old. However,...

Pros and Cons of Sports Tourism

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Protectionist Sentiment over Flipkart Takeover

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Role of Social Media In Start-Up Funding

In the past couple of decades, social media has literally dominated the world of business. It has touched almost every...

Role of Social Media in The Silicon Valley Bank Run

Bank runs have been part of the banking industry for a long time. This is an unintended consequence of the...

How Sporting Franchises Help Billionaires to Plan Their Taxes

Over the years, the sporting business has quietly metamorphosized into a big business. The amount of money changing hands in...

Start-Ups and Public Relations

Almost every start-up firm tries to increase its sales. However, convincing more customers can be a very difficult task. It...

The Impact of Tariffs on the Energy Sector

The American energy sector has really taken off in the past few years. The discovery of “fracking” or hydraulic fracturing...

Was The Silicon Valley Bank Bailed Out by the Government?

The current crisis at the Silicon Valley Bank is a stark reminder of the dark days of 2008. Just like...

Why is Short Selling a Dangerous Financial Strategy?

The term short selling is often seen in the news. This tactic is regularly used by well-known investors. They are...

Pros and Cons of Banking as a Platform (BaaP)

We know the way in which Banking as a Platform (BaaP) is using technology to revolutionize the commercial banking industry....

What are Development Impact Bonds and How are they Evaluated

Development impact bonds are a revolutionary new type of bonds which are being introduced in the market. These bonds have...

IPO: An Exit Route for Start-Ups

The typical successful start-up obtains funding from various private investors at the earlier stages of the business. Now, these investors...

What is Jock Tax and How is it Calculated?

In the previous articles, we have already seen that the owners of sporting franchises are able to evade taxes even...

Venture Debt – A Primer

The Fed has decided to raise interest rates steeply. One rate hike has already been announced this year (2018). It...

Problems with Bank Term Funding Program (BTFP)

The Silicon Valley Bank crisis has prompted the Federal Reserve to evaluate its emergency funding program. The original emergency funding...

How Credit Enhancement Works?

Credit enhancement refers to the artificial restructuring of credit products which results in the improvement of its credit rating. In...

Interest Rates and Automobile Sales

The automobile industry sales have been stagnant for the past couple of years. However, this is bad news. This is...

Jock Taxes: Pros and Cons

In the previous article, we have already understood what Jock Taxes are. We also had a closer look at the...

What is Acqui-Hire?

Acqui-hire is a different type of acquisition strategy which has come into existence with the emergence of technology-based start-ups. For...

How Reverse Pitching Works? – Its Advantages & Disadvantages

Start-ups connect with large corporations in many ways. The most common way for start-ups to connect with their larger counterparts...

How Ultra Long Term Bonds Work?

In September 2018, Austria became the latest developed country to issue ultra-long-term bonds. As per the deal, Austria raised a...

Valuation of a Player in Sports

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How Should Companies Communicate With Wall Street?

Wall Street is very sensitive to communication. Every quarter, executives from top companies communicate their results to the street. Based...

Financial Doping and Financial Fair Play

The business of sports leagues is inherently intertwined with the finances that the franchises have. It may appear that the...

How to Identify an Overvalued Market?

All stock market investors know that markets go through periods of euphoria and panic. During periods of euphoria, investors keep...

Is Tesla Close to Bankruptcy?

Elon Musk cracked an April 1st joke on his investors. He first claimed that Tesla had gone completely bankrupt. Later,...

What is an Aggregator Business Model and How does it Works?

A lot of new-age start-ups are very innovative in their business models. However, a lot of these start-ups also follow...

How do Companies Choose which Exchange to List on?

Uber and Pinterest are amongst the hottest tech start-ups in the world right now. This is why the fact that...

What is Marketplace Business Model and How Does it Work?

In the previous article, we have studied about how modern start-ups have created a new form of a business model...

Myths Surrounding Toys R Us Bankruptcy

Toys R Us is an iconic American company. According to recent surveys, Toys R Us has a market share of...

Pros and Cons of Financial Fair Play Rules

In the previous article, we have already seen how certain football clubs in Europe have been using their money power...

Debt Funding in Sports Franchises

Sporting franchises are also business organizations that operate just like other business entities. Therefore, just like other business entities sports...

Difference between Aggregator and Marketplace Business Models

In the previous articles, we have already studied the aggregator as well as the marketplace business models. These two types...

The Economics of ‘Soda Taxes’

Sugary beverages manufactured by companies such as Coca-Cola and Pepsi are colloquially called “soda” in the United States. Americans consume...

The FAANG Sell-off

Facebook, Amazon, Apple, Netflix, and Google are together known as the FAANG stocks in the stock market. These stocks have...

Why are Investors Getting Spooked by an Inverted Yield Curve?

In the past week, the American investors witnessed an inverted yield curve for the first time since the year 2007....

Involvement of the Franchisor in Debt Funding

In the previous article, we have already seen that it is common for sporting franchises to raise significant amounts of...

Product as a Service (PaaS)

Whenever we talk about modern start-up corporations, we assume that the company is engaged in some kind of an online...

Why the Xiaomi IPO Failed?

Xiaomi is considered to be one of the most valuable startup firms in the world now. This firm, which has...

Debt Ceiling in Sporting World

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How a Whatsapp Message Nearly Took Down a Company

Almost everybody knows that Whatsapp messages are often used to spread false information. A lot of times this information is...

Benefits of Product as a Service (PaaS) Model

The Product as a Service (PaaS) business model is poised to change the business world in a big way. There...

Catastrophe Bonds

Catastrophe bonds are one of the most sophisticated tools used by the insurance company in order to protect itself from...

Disadvantages of Product as a Service (PaaS) Model

There is no doubt about the fact that the Product as a Service (PaaS) model is being adopted by companies...

The NSE Co-Location Fraud

The National Stock Exchange (NSE) is one of the two leading stock exchanges in India. Ironically, the National Stock Exchange...

Pros and Cons of Debt Ceilings in Sports Leagues

In the previous article, we have already been introduced to the concept of debt ceiling as well as the various...

The Case for Index Funds

People who invest their money in stocks can be split up into two categories. One category of people actively decide...

The Economics of Blue Bonds

Oceans account for over 70% of the surface area of the earth. This makes them important for life as well...

The Sears Bankruptcy

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Securitization and Sports Finance

The business of sports can be asset-intensive and can lead to negative cash flows for a number of years. Sporting...

The Co-Working Business Model – How Co-Working Spaces Make Money

The sharing economy has been one of the major themes when it comes to start-up investing in the past decade....

How the GameStop Saga Proves That Shoe is on the Other Foot for the Investors

How the GameStop Saga is Small Investors Paying the Biggies in the Same Coin The past few weeks have seen...

Peer to Peer (P2P) Business Model

The internet has enabled the functioning of various new types of business models. The peer-to-peer business model is one such...

The Socialization of Losses

Joseph Stiglitz is one of the most renowned economists of our time. He once criticized the current economic system after...

Types of Securitizations in Sporting Franchises

Securitization is now becoming an integral part of the way in which international sporting franchises finance themselves. There is no...

The Instacart Business Model

In the past few years, the online grocery shopping space has grown by leaps and bounds. Customers have generally been...

5 Principles of Forex Trading Systems

Forex trading is a complicated affair. The complication largely arises because of the innumerable factors that are at play in...

The Sudden Downfall of IL&FS

The Infrastructure Leasing and Financial Services (ILFS) corporation were one of the bellwethers of India’s infrastructure sector. Ever since the...

Advantages of Securitization in Sports

In the previous couple of articles, we have already seen what securitization is and how it is used in the...

Disadvantages of Securitization in Sports

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The Goodleap Business Model

When investors look at the list of companies that have become unicorns in the recent past, Goodleap tends to stand...

Why Healthy Corporate-Regulator Tussle is Good for Free Market Capitalist Economies

What the Resignation of Urjit Patel Means for the Corporate Regulator Tussle in India Recently, in India, the RBI or...

5 Reasons Why Fundamental Analysis Does Not Work In Forex?

Fundamental analysis is considered to be the holy grail of stock investors. Warren Buffet claims to have amassed his fortune...

The Twitter Story

The mega-success of social media sites is not news for anyone. Social media companies such as Facebook and Instagram have...

What Happens when Businesses go Bankrupt? Insolvency, Aftermath, and Recovery

How Countries Worldwide Handle Bankruptcies As part of the normal boom and bust cycles of Free Market Capitalism, businesses do...

Accounting for Player Contracts

Sporting franchise clubs are business entities at the end of the day. Even though some of them may not be...

How Tesla Reinvented the Automobile Industry?

The growth story of Tesla is no ordinary story. It is a testimony to what a start-up can achieve if...

Accounting for Player Contracts – Advanced Scenarios

In the previous article, we have already seen that accounting for sporting franchises involves certain scenarios that are specific only...

Alibaba’s Singles Day

Alibaba is a Chinese online retail company. This company started as an Amazon wannabe in the Chinese economy. However, today...

How Epic Games Changed the Gaming Industry?

The gaming industry is notorious for being full of fads. Games tend to become popular very soon. However, their popularity...

Impairment in Sporting Franchises and Player Contracts

In the previous two articles, we have already established that the sporting industry has this unique practice of recognizing human...

Uber’s New Businesses

Uber is already a well-known brand across the world. Technically, the company is still a startup. However, Uber has a...

Goldman Sachs and the 1MDB Scandal

The 1MDB scandal is a scandal of epic proportions that was uncovered in Malaysia almost five years ago. This scandal...

The SpaceX Success Story

The world has seen many unconventional start-ups. However, almost all start-up companies derive their revenue from the earth. It is...

Accounting for Players Who Have been Promoted Internally

It is common for sporting franchises to create an internal system so that young players with high potential can be...

The Stripe Business Model

Stripe is one of the most prominent start-ups in the world. It does not have the fame or popularity of...

Why Government Should Not Invest Public Money in Sports Stadiums Used by Professional Franchises

In the previous article, we have already come across some of the reasons why the government should not encourage funding...

Are Index Funds not a Good Investment in India?

The Indian equity markets are at an all-time high. This can be largely attributed to the large inflow of savings...

The TikTok Business Model

When we talk about social media, we often refer to companies like Facebook, Instagram, Twitter, and LinkedIn. However, in the...

Can Brick and Mortar Stores Compete with Amazon?

Amazon has become the poster-child of the e-commerce growth story across the world. For many years, retail executives across the...

Problems Related to Facebook, WhatsApp, and Instagram Mega Merger

In the previous article, we talked about Facebook’s plan of becoming a social media conglomerate by merging different apps like...

Zillow Story – The Real Estate Marketplace

The real estate market tends to be a highly fragmented market in most parts of the world. Since the product...

How Business Cycles Affect Start-Up Companies

Start-up businesses are affected by a wide variety of factors. Macroeconomic factors such as business cycles affect start-up organizations as...

The Whatsapp- Facebook-Instagram Merger

Facebook, Instagram, and Whatsapp are three major social media applications. These three applications have a combined user base of about...

What is the DHFL Scam?

In the recent past, the economy of India has been hit by one corporate marauder after another. It is surprising...

Managing Start-ups During an Economic Downturn

Economic cycles are a reality of life. Founders need to be aware of the fact that their start-up company could...

Financial Troubles in the Fracking Industry

The fracking industry has had a huge impact on the financial situation of the world in the past decade or...

Flipkart Circumvents India’s FDI Norms

The Indian government has been defensive about opening up its retail sector to global companies such as Wal-Mart and Amazon....

The Jaguar Land Rover Debacle

Jaguar Land Rover (JLR) produces some of the most exquisite and high-end luxury vehicles in the world. The company is...

The Kraft – Heinz Fallout

Kraft foods and Heinz, two Fortune 500 giants, merged in 2016 to form one of the largest companies in the...

Why Uber Should Be Regulated?

In 2017, a top European Union court has ruled that since Uber’s drivers provide transport services to customers, it should...

The Fall of an Ambani Scion

Dhirubhai Ambani was the perfect rags to riches story that India had ever seen. He had started out with nothing....

What is Litigation Funding?, Its Advantages and Disadvantages

Legal costs have long been a deterrent for people wanting to file lawsuits. In a country like America, the legal...

The Finance behind the Plastic Problem

The plastic problem has become a major talking point across the entire world. Almost every country in the world is...

The MasterCard Visa Duopoly

The global payments processing market is dominated by only two major players viz. MasterCard and Visa. Many experts find this...

Is the Lyft IPO Overpriced?

Lyft is one of the most famous tech unicorns in the world. There was tremendous amount of buzz in the...

The Alliance between Car Companies and Ride Hailing Apps

Automobile companies in India have been facing tough competition amongst themselves. Firstly, increasing traffic congestion in the cities is making...

The Amazon Divorce Deal

In April 2019, the stock price of Amazon had taken a beating because of the news of the divorce of...

The Lawsuit Between Spotify and Apple Corporation

Spotify, which is one of the largest music streaming websites in the world, has filed an anti-trust lawsuit against Apple...

The Story Behind the L&T- Mindtree Takeover Bid

The Indian stock market is abuzz with the news of a hostile takeover. Larsen and Toubro, which is one of...

Do IPO’s Affect Competitive Firms?

Many tech-based companies are lined up for initial public offerings (IPOs) in 2019. Many companies such as Uber and Lyft...

Can Cost Cutting Turn Out to be Expensive?

Downturns are part of an economic cycle. Every few years or so, the economy stops growing at a rapid speed....

The Economic Impact of Facebook Outage

Facebook is one of the largest social media firms in the world. The Facebook family of apps, i.e. Facebook, WhatsApp,...

The Apple-Qualcomm Legal Battle

Apple Inc. is the largest and the most profitable company in the entire world. However, of late, it has also...

Cross Border Credit Reporting

The geographical boundaries drawn by nation states are blurring in the 21st century. In many parts of the world, free...

The Wow Airline Debacle

The Icelandic budget airline “Wow airline” became the latest airline to go bankrupt in Europe. Of late, Europe has seen...

The “WeWork” Business Model

The name WeWork is now a known brand name for millennials around the world. This is a remarkable feat given...

Problem with Private Securities Offerings

The average person believes that they are legally allowed to make any investment that a rich person can. However, this...

The Amazon FedEx Breakup

Amazon and FedEx have traditionally had a love-hate relationship. On the one hand, Amazon is one of the biggest customers...

The Decline of the Big Corporation

The era of big corporations started during the industrial revolution. The past couple of centuries have witnessed the rise of...

The Gap-Old Navy Breakup

Economies of scale provide a significant advantage in the retail industry. This is the reason why all retail companies try...

Apple’s Acquisition of Intel’s Modem Business

Apple is one of the largest manufacturers of mobile phones in the world. The company is the largest in the...

Mergers and Acquisitions: A New Perspective

The nature of mergers and acquisition activity has drastically changed over the past few years. Earlier, most of the mergers...

Why are Corporations Hoarding Trillions in Cash?

Corporate America is flush with cash! Collectively, the Amazons’, Apples’ and other such publicly traded mega corporations account for close...

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