Capitalized and Expensed Costs
Long-lived assets are assets that are expected to provide economic benefits over a future period of time; usually longer than one year. They include property, plant, and equipment (long-lived tangible assets); patents and trademarks (long-lived intangible assets); and investments in…
FCFF and FCFE Ratios
The cash flow statement can be used to compute financial ratios which measure a company’s profitability, performance, and financial strength. Other cash flow measures such as free cash flow to the firm, and free cash flow to equity, can also…
Value and Price of Forward and Futures Contracts
[vsw id=”0Geaej45v7w” source=”youtube” width=”611″ height=”344″ autoplay=”no”] By assessing the difference between the investors’ determination of the value of a stock or option versus the prevailing market price, investors can either buy or sell the asset to attempt to profit from…
Mechanisms to Manage Stakeholder Relationships and Mitigate Associated Risks
[vsw id=”KxjLLIVuAg0″ source=”youtube” width=”611″ height=”344″ autoplay=”no”] In seeking to balance stakeholder interests, a company may employ various mechanisms in stakeholder management. Common mechanisms include: holding general meetings, electing a board of directors, having an audit function, company reporting and transparency,…
Functions and Responsibilities of a Company’s Board of Directors and its Committees
[vsw id=”KxjLLIVuAg0″ source=non-executive directors “youtube” width=”611″ height=”344″ autoplay=”no”] The board of directors oversights company operations and serves as the link between its shareholders and managers. It has the ultimate responsibility of ensuring that the company adopts proper corporate governance principles…
Factors That Can Affect Stakeholder Relationships and Corporate Governance
[vsw id=”KxjLLIVuAg0″ source=”youtube” width=”611″ height=”344″ autoplay=”no”] Both market and non-market related factors can affect stakeholder relationships and corporate governance. Market factors are those factors that are related to the capital markets, while non-market factors are those that are not related…
Potential Risks of Poor Corporate Governance
Weaknesses in corporate governance practices and stakeholder management processes expose a company and its stakeholders to several risks. The reverse scenario is that effective corporate governance and stakeholder management practices can create several benefits for a company and its stakeholders….
Factors Relevant to the Analysis of Corporate Governance
There are several factors that analysts consider when assessing a company’s corporate governance structure and stakeholder management. These factors can provide important insights into the quality of management and the sources of potential risk. The factors that analysts look at…
Basic Features of a Fixed-income Security
A fixed-income security is a financial obligation that pays a fixed amount of interest—in the form of coupon payments—to investors at specified points in the future. The payments are anchored on contractual guidelines and must be made. This is, in…
The Main Functions of the Financial System
Achievement of Purposes People use the financial system for various reasons, which can be broken down into six main purposes. However, regardless of the purpose, the financial system is more efficient when transactions are performed in liquid markets. 1….
