Month: February 2021

INTRODUCTION Capital Markets are markets where long-term instruments are traded e.g. equities, preference shares, debentures etc. A good example of a Capital Market is the Stock Exchange. MAIN FUNCTIONS The main functions of the Stock Exchange are: PRIMARY MARKET –  Read More …

OVERVIEW OF WORKING CAPITAL MANAGEMENT Definition of Working Capital Working Capital (Net Current Assets) = Excess of Current Assets over Current Liabilities. Current Assets: Stock (Finished Goods, WIP and Raw Materials), Debtors, Marketable Securities and Cash/Bank. Current Liabilities: Creditors Due Read More …

INTRODUCTION Definition of Risk Risk occurs where it is not known what the future outcome will be but where the likelihood of various possible future outcomes may be assessed with some degree of confidence, probably based on a knowledge of Read More …

INTRODUCTION To illustrate how inflation should be handled in Investment Appraisal we shall take a simple example, under two different scenarios – an environment with no inflation and an environment where inflation is present: No Inflation – suppose you are Read More …

INTRODUCTION To appraise fully an investment, management must take account of the impact of taxation, as it is the after-tax cash flows that are relevant to decision making. As a result of accepting a project tax payments or savings will, Read More …

           NATURE AND STAGES OF INVESTMENT APPRAISAL Nature Replacement Investment Investment for Expansion Product Improvement/Cost Reduction New Ventures Strategic Investment – may satisfy overall objectives but might not satisfy normal financial criteria. Statutory Requirements/Employee or Community Welfare – may not Read More …

INTRODUCTION Corporate Governance can be defined as the system by which organizations are directed and controlled. BEST PRACTICE  Financial aspects of corporate governance have introduced a “Code of Best Practice” Some of the main recommendations are: The roles of chairman Read More …

INTRODUCTION It is often assumed that the single objective of commercial entities is: To Maximise the Value of the Firm Or To Maximise the Wealth of the Shareholders In reality, firms have multiple, and often conflicting, objectives and will seek Read More …

SOCIAL AND ENVIRONMENTAL ACCOUNTING AND REPORTING Traditionally, accounting and reporting has been as an exercise based on a set of ‘financial numbers’, composed of for example income and expenditure, asset valuations, liabilities owed and capital. However in recent decades a Read More …

INTRODUCTION A share-based payment is one in which the entity receives or requires goods and services in return for equity instruments of the entity or incurs a liability for amounts that are based on the prices of the entity’s shares Read More …