Day: March 7, 2022

Current assets can either be financed by use of short-term on long-term finds. For every firm, there is a minimum level of net working capital that is permanent. The magnitude of current assets needed is not always the same. It Read More …

Optional investment in current assets i.e. liquidity management is important because current assets are non-earning assets. Current assets affect the firm’s financial risk. The consideration of the level of investment in current assets should avoid 2 danger point’s i.e. excessive Read More …

Gross working capital refers to total current assets and these are those assets that can be converted to cash within an accounting year e.g. stock receivables, cash short-term securities and so on. Net working capital refers to current assets less Read More …

There are different methods of analyzing the viability of an investment. The preferred technique should consider time value procedures, risk and return considerations and valuation concepts to select capital expenditures that are consistent with the firm’s goals of maximizing owner’s Read More …

Such decisions are importance because they will influence the company’s size (fixed assets, sales, and retained earnings). They increase the value of the company’s shares and thus its credibility. The fact that they are irreversible means that they have to Read More …

Any company will invest finance for the sake of deriving a return which is useful for four main reasons: 1. To reward the shareholders or owners of the business for staking their money and by foregoing their current purchasing power Read More …

1. Deficit budget If the proposed expenditure is greater than the planned revenue from taxation and miscellaneous receipts, this is a budget deficit. The excess of expenditure over revenue will be met through borrowing both internally through the sale of Read More …

The budget is a summary statement indicating the estimated amount of revenue that the government requires and hopes to raise. It also indicates the various sources from which the revenue will be raised and the projects on which the government Read More …

1. Mortgages An arrangement where the property being purchased provides the security for funding. Other assets may be used as security for funding of another asset. Features 1. Mortgagor and mortgagee agree on a long term financing arrangement 2. Financing Read More …

These are financial institutions that accept deposits of money from the general public, safeguard the deposits and make them available to their owners when need arises. Establishment Established under the Banking Act 1968. Functions of Commercial Banks 1. Accepting deposits Read More …