Working Capital Financing

November 23, 2015 By Toluwalope Leave a Comment

Working Capital Financing for business

Before we begin, let us first ask the question: What is working capital?

Working capital is the capital of a business which is used in the day to day operations of the business. It is derived by summing your current assets which may include inventory, receivables, prepayments, cash at hand and cash in the bank. Thereafter, you sum up your current liabilities too. This may include payables, accrued expenses, bank overdrafts, current maturities of long term debts, interest payables and more. Then you subtract the current liabilities from the current assets to get your working capital. [Read more…] about Working Capital Financing

Loan vs Line of Credit

November 23, 2015 By Toluwalope Leave a Comment

Loan or Line of Credit

Running a business can rarely be achieved with your own financial capacity alone, and without any outside help. Due to the complexities of running a business, it is likely that you would need some outside help to sustain your business at one point in the life of your business. Traditional lenders have created a way to help out small business owners. They are in the form of business loans or lines of credit for small business financing. [Read more…] about Loan vs Line of Credit

Early Buyout in business

November 22, 2015 By Toluwalope Leave a Comment

Why an early buyout may be profitable for your business

For many entrepreneurs, it is always very difficult to let go. They mostly are sentimental about it; to give up the business they had grown and nurtured might seem too hard of a thing to do. But sometimes it may be best to let go, or share ownership with another party. This is always too much to bear for the entrepreneur, but sometimes it is the best option. Especially when an early buyout offer is received. I am sure you would be asking yourself what a buyout is? .. Let me break it down for you. [Read more…] about Early Buyout in business

Valuation of Common Stock

November 22, 2015 By Toluwalope Leave a Comment

Stock Valuation

Investors buy common stock with the hope that they would be able to recoup the cost of their investment in the form of returns on the investment. Since common stock is equity that is perpetual in nature, the return on investment would be in the form of capital gains when it is sold (if it is sold higher than it is bought) or cash dividends. [Read more…] about Valuation of Common Stock

Debt vs Equity

November 19, 2015 By Toluwalope 2 Comments

Debt vs Equity

They are essentially two ways a company can raise capital, they are by:
1) Borrowing money which becomes a debt to be settled at a later date, and
2) Equity which allows other people become partial owners of the business or company. [Read more…] about Debt vs Equity

Credit card debt consolidation

November 18, 2015 By Toluwalope Leave a Comment

What is a Credit card

Before we begin, let us first start with the basics, which is what a credit card is. So what is a credit card?

A credit card is simply a card issued by a financial institution, usually a bank to her customers allowing such customers to purchase goods and services on credit (ie without actually paying for them with the customer’s own money). It is a kind of lending service by the bank and interest is collected on amounts borrowed by the customers. [Read more…] about Credit card debt consolidation

Inflation and the Economy

November 18, 2015 By Toluwalope Leave a Comment

What is inflation?

Inflation can be defined as a sustained and continuous increase in general price level. This brings about a fall in the value of money. For it to be said that an economy is in an inflationary period, two things must happen. [Read more…] about Inflation and the Economy

Mutual Funds

November 16, 2015 By Toluwalope Leave a Comment

Introduction to Mutual Funds

Mutual funds are very popular types of investment funds in the US. They are known as an open end company under federal securities law.

What is a mutual fund?

To elaborate, A mutual fund is a pool of funds professionally managed for the benefit of all shareholders. A Mutual fund can be seen as a company which invests in diversified portfolio of securities to minimize risks. Mutual funds get the money they invest from shareholders, and they use this money to purchase securities such as stocks and bonds with the goal of bringing higher returns to the shareholders. [Read more…] about Mutual Funds

Enterprise Value vs Equity Value

November 15, 2015 By Toluwalope Leave a Comment

Introduction to Enterprise value and Equity Value

Enterprise value is the sum of all ownership interests in a company and claims on its assets from both debt and equity holders. Enterprise value represents the full cost of acquisition of a company, It can be used to value the obligations to settle or the costs to pay for a company who wants to takeover or acquire another. Enterprise value can be derived by summing up the equity value, total debt, preferred stock and non-controlling interests and then deducting cash and cash equivalents. [Read more…] about Enterprise Value vs Equity Value

Designing & Evaluating Management Control Systems

November 12, 2015 By Toluwalope Leave a Comment

The process of designing a good management control system

A management control system basically seeks to gather information and use the information gathered to evaluate the performance of different organizational resources like human, physical, financial and also organization as a whole.

In designing a management control system, we ask ourselves two questions. They are: [Read more…] about Designing & Evaluating Management Control Systems