Stockholder:
- Stockholders
are the owners of the company.
Stakeholder:
- Stakeholders
are anyone with a financial interest in the company. Creditors, Customers,
Government, Suppliers e.t.c are the examples of stakeholder.
Tuesday, December 30, 2014
What is Financial Intermediary
Financial Intermediary:-
A financial
intermediary is a firm that raises money from many small investors and provides
financing to businesses or other organizations. For example Bank, Insurance
company e.t.c collects money from surplus units and lends the money to deficit
units.
What is Treasury Stock
Treasury Stock: - Treasury Stocks are shares that are repurchased by the issuing company
from the existing shareholders. Treasury shares can be reissued later by the
company. treasury stocks reduces the number of share outstanding.
Difference between accrual basis and Cash basis
Accrual basis:-
An accounting system that records revenues and expenses at the time the transaction occurs, not at the time
cash receipt
or payment. Financial Accounting is based on accrual basis.
Cash basis:-
A system that records revenues and expenses not
at the time the transaction occurs, but at the time of
cash receipt or payment. Finance is based on Cash basis.
What is Bond
Bond:-
A bond is an
agreement of debt, between the issuer and lender under the terms of which an
issuer contracts to pay the holder a fixed principal amount at the end of maturity
date and usually a series of interest payments during its life. Bond is a debt
instrument for a company to finance its business. It is also called the
cheapest sources of capital available to a firm.
Monday, December 22, 2014
What is time value of Money
Time Value of Money:
- Today’s money
is more valuable than money will be received in tomorrow. This is called time
value of money. Due to inflation the purchasing power of money declines day by
day that’s why today’s money is more valuable than tomorrow’s.
What are Money market and capital market?
Money Market: - Money market is a market for
short term financing. Short term securities are traded here. Generally
commercial banks make money market.
Capital market: - Money market is a market for long
term financing. Capital market is a
market where long term securities are traded. Bond market, Share market are example
of capital market.
What is retention ratio?
Retention Ratio:-
Corporations
Payout a portion of their earnings as dividend to the shareholders and retain a
portion of earnings as retained earnings. The portion of earnings retained with
the company divided by net income is called retention ratio.
For
example XYZ a company has BDT 1, 00,000 as net income. It retained BDT 60,000
as retained earnings within the company so the retention ratio of XYZ Company
will be-
Retention
ratio = Net income - Dividend / Net income
= 100000 - 40000/100000
= 60000/100000
= 60%
Posts
