Guide to Business Financing and Investment
Capital Increase
Companies can obtain funds from abroad through acquiring new capital. An extension means an increase in the number of shares. However, a capital increase doesn’t always mean new resources are contributed. Sometimes, capital is extended through transferring reserves. In this case, no new resources are provided. Creditors might offer participation by converting debt into shares.
Stock Market
Stock markets facilitate buying and selling shares, bonds, and other securities. Market Value
Read MoreFinancial Statement Analysis and Interpretation
L-2 Financial Statements
2.1 General
The objective of general purpose financial statements is to provide information on the financial situation. These statements also show the results of the dedication and care management of the resources entrusted to the reporting entity. To achieve this objective, financial statements provide information about the company’s:
- Assets
- Liabilities
- Equity
- Income and Expenses
- Cash Flows
The accounts are classified and summarized within structured financial statements. These
Read MorePersonal Finance and Macroeconomics
Lesson 3: Personal Savings and Macroeconomic Factors
1. Personal Saving, Disposable Income, and Breakeven Point
- Personal saving is the portion of disposable income not spent on consumption. It’s what remains after covering basic needs and discretionary expenses.
- Disposable income (DI) is the income remaining after taxes are deducted, available for spending and saving. DI = Income – Taxes
- Breakeven point is when income equals expenditures, preventing savings. Any additional income must be saved or spent.
Financial Management, Marketing, and Human Resources
Financial Management
Investing and Funding
Financial management involves managing the financial resources a company needs for its business development and making investment decisions. Investing is the acquisition of financial capital with the expectation of gain or profit.
Internal funding sources (cash flow): Resources generated by the company’s activities.
External funding sources: Resources obtained from investors or financial intermediaries, not owned by the company. These are current liabilities.
Read More10 Principles of Economics: A Comprehensive Guide
1. Individuals Face Tradeoffs
To get what we like, we usually have to give up something else. This creates choices between different goals. Societies face tradeoffs like “guns vs. butter”—more defense spending means less spending on consumer goods. Businesses balance efficiency (maximizing resources) and equity (distributing benefits fairly).
2. The Cost of Something Is What You Give Up to Get It
Decision-making involves comparing costs and benefits. The opportunity cost of something is what you
Read MoreComprehensive Guide to Business Management & Accounting
Business Management
Inventory Management
Stock Types
- Raw Materials: Items requiring processing to become finished goods.
- Semi-finished Goods: Manufactured products requiring further processing.
- Finished Goods: Products ready for sale without further transformation.
Stockout
Stockout: The cost incurred by a company when inventory runs out.
Inventory Management Techniques
- Inventory Control: Requires monitoring minimum, maximum, and safety stock levels.
- Reorder Point: The inventory level at which new orders