Miro Zecevic

  Corporate Finance is about how companies make decisions about what projects to pursue and how to value those projects. Ratio Analysis Ratio Analysis is taking two numbers from financial statements and dividing one by the other. What we are doing is taking two pieces of accounting data, put one over the other, and this forms a ratio. We are taking two pieces of data and forming a performance metric. Ratios are usually presented as a percentage or a number depending on whether the usual case is bigger or less than one. Time value of money Time is money, literally. If there is a prospect of receiving a certain sum then the sooner you receive it the more it is worth. Interest rates describe this relationship between present value and future value. Discounting Cash Flows A company is essentially an entity that generates cash flows each year into the future. The trick is estimating those future cash flows and how much they might grow or shrink and what the risks are to rea...

1. Buy – Means to take a position or to buy shares in a company. 2. Sell – Getting rid of the shares that you purchased, either because you’ve achieved you want to cut your losses. 3. Bid – Your bid is what you’re willing to pay for a stock. 4. Ask – Ask, on the other hand, is what people selling stocks are looking to get for their shares. 5. Bid-Ask spread – The bid-ask spread is the difference between what people have to spend and what people want to get. The spread must be resolved before the transaction can take place. 6. Bull Market – A bull market is a market condition that means stock prices are expected to rise. 7. Bear Market – A bear market is one in which investors expect stock prices to fall. This is where short sellers shine. 8. Limit Order – A limit order provides instruction to only execute at or under a purchase price or at or above a sale price. Always use limit orders, not market orders. 9. Market Order - A market order provides instruction to execute, as quic...