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Stocks and bonds as investments

In the following section, we will discuss in more depth the pros and cons of owning stocks, from the point of an investor rather than the borrower. This will allow …

Emerging financial instruments

Since we have an understanding of the most common financial instruments, we will now briefly explore some of the emerging investment vehicles that exist in the market. Cryptocurrency Cryptocurrency is …

How to Determine the Value of Stocks

First, in order to value stocks, we must understand what intrinsic (or fundamental) value is. It is an important concept and is defined as the amount a rational investor would …

What are stocks?

Watch this video for an introduction to stocks and people or companies who are interested in stocks. There are actually different types of stocks that companies can issue – below …

Process of issuing a stock

As we’ve stated before, firms will issue stock to raise capital for a variety of business decisions. It is important to note that a firm might also choose to issue …

Types of bonds

This section will focus on the types and categories of bonds that exist, with a specific focus on the Australian Stock Exchange (ASX). This may vary slightly by country, and …

Introduction to working capital

Working capital measures liquidity. Liquidity is an organisation’s ability to transform assets into cash. Liquid assets can be cash or a resource that can be quickly turned into cash. Examples …

Calculate cash conversion cycle

Use the cash conversion cycle (CCC) to measure the amount of days it takes to convert inventory into cash. The CCC marks the time it takes to sell inventory and …

What are bonds?

Managers must be aware of not just short-term but also long-term financing options available to them. Depending on their unique situation, they should be able to opt for the one …

Prepare an ageing schedule

An ageing schedule is a way of finding out if customers are paying their bills within the credit terms outlined in the company’s credit terms. The ageing schedule is a …

Manage and set AR policies

If you got paid for sales instantly, you would never have an AR problem and therefore any cash flow problems. However, this rarely happens in the real world. The key …

Calculate working capital

Watch the following video as it provides context and goes through an example of how you can calculate working capital using the formula: Current assets – current liabilities Watch: Working …

What is accounts receivable?

Accounts receivable, or AR, is a crucial figure if you allow your customers credit to pay for your service / product after a period of time. Analysing your average AR …

Calculate allowance for bad debts

Bad debts are customers (AR) that are unable to meet their commitment to pay for their service, product, or whatever widget they have received from you. There is no set …