Day: February 27, 2021

INTRODUCTION Given the capital budgeting decision of a firm, it has to decide the way in which the capital projects will be financed. Every time the firm makes an investment decision, it is at the same time making a financing Read More …

INTRODUCTION In Chapter 12, we discussed the effect of leverage on the shareholders’ earnings and risk. Under favourable economic conditions, the earnings per share increase with financial leverage. But leverage also increases the financial risk of shareholders. As a result, Read More …

INTRODUCTION Dividend decision of firm is yet another crucial area of financial management. The important aspect of dividend policy is to determine the amount of earnings to be distributed to shareholders and the amount to be retained in the firm. Read More …

INTRODUCTION So far we have discussed the management of fixed assets and long-term financing. In this part, issues relating to the management of current assets will be discussed. The management of current assets is similar to that of fixed assets Read More …

INTRODUCTION Cash is the important current asset for the operations of the business. It is the basic input needed to keep the business running on a continuous basis; it is also the ultimate output expected to be realized by selling Read More …

INTRODUCTION Trade credit happens when a firm sells its products or services on credit and does not receive cash immediately. It is an essential marketing tool, acting as a bridge for the movement of goods through the production and distribution Read More …