Miro Zecevic

  What is a derivative? A financial instrument based on another asset is known as a derivative. Stock options and commodities futures are two of the most common examples of derivatives, and you've definitely heard of them but aren't sure how they operate. Derivatives allow consumers the option — but not the duty — to acquire or sell an underlying asset at a later date. The underlying asset and the period until the contract expires determine the derivative's value. How Financial Derivatives Work Financial derivatives are financial products whose value is determined by one or more underlying financial assets, such as stocks, bonds, commodities, currencies, or interest rates. Investors engage in contracts with stated terms, such as the period of the contract and the consequent values and definitions of the underlying assets, to purchase and sell derivatives. Futures, options, swaps, and forwards are examples of financial derivatives. Futures and options are often traded on the...

Liquidity Ratio   This ratio indicates how rapidly a corporation can turn its present assets into cash in order to pay down its liabilities on time. Liquidity and short-term solvency are frequently used simultaneously. Current Ratio The current ratio compares a company's capacity to pay down current obligations (those due within one year) with its total current assets, which include cash, accounts receivable, and inventory. The better the company's liquidity condition, the higher the ratio: Current Ratio = Current Liabilities / Current Assets ​ Quick Ratio The quick ratio, which removes inventory from current assets, assesses a company's ability to satisfy short-term obligations with its most liquid assets. Quick ratio= (C+MS+AR) / CL C - cash & cash equivalents MS - marketable securities AR - accounts receivable CL - current liabilities ​ ​Another way is: Quick ratio = (Current assets - Inventory - Prepaid expenses) / Current liabilities Efficiency ratio The efficiency...

All you wanted to know about Corporate Finance What is Corporate Finance? ·         Business involves decisions which have financial consequences and any decision that involves the use of money is said to be a corporate finance decision. ·         Corporate finance is one of the most important part of the finance domain as whether the organization is big or small they raise and deploy capital in order to survive and grow. ·         There are various roles that corporate finance plays, which are very interesting and challenging, one of the main roles is that of being a Finance adviser. ·         This can comprise helping to manage investments or even suggesting a mergers and acquisitions strategy. Corporate Finance Principles ·         Investment Principle: This principle revolves a...

The Benefits of Acquisition It’s important to understand that an acquisition is distinct from a merger in several ways. First, an acquisition is the act of buying another business, whereas a merger is a process by which two companies become one company, though the ownership interests may differ. Second, acquisitions are complete takeovers, meaning that when you buy another company, you own all the ownership interests and can, therefore, make any decisions you and your company’s leadership wants to make. One main advantage of buying another business that sells similar product or services is that you can create economies of scale, which refers to the process of increasing production by lowering production costs. When you take on the second business, you can implement the same marketing and sales strategies for the new company, which lowers costs and helps to boost productivity. Another advantage is that you can broaden your target audience by tapping into the existing market...