Definition: Financial intermediaries are the individuals or institutions which discursively connects the depositors with the borrowers. It acts as a medium between both by using the depositors’ funds for offering a loan to the borrowers. While these financial intermediaries make income from the interest rate spread. Interest rate spread can be explained as the earnings … Read more
Definition: Financial ratio analysis can be explained as a better understanding of the company’s position by correlating multiple elements of its financial statements at a time. These ratios provide an insight to the investors, clients, stakeholders and government authorities. Also, it is an essential tool for business decision making by the directors or the stakeholders. … Read more
Definition: Treasury stock can be explained as that chunk of stock which the company buybacks from its shareholders. The company had earlier issued these shares and these were available as the outstanding shares in the market for trading. These stocks are then used for reselling in future or retirement, as per the corporate need. In … Read more
Definition: Bootstrap financing can be defined as a self-raised startup where the entrepreneur incorporates an enterprise with limited capital available. The idea is to keep the external borrowings at the lowest and relying on the internal finance sources. Bootstrapping is setting up a small venture with whatever is available with the founder or can be … Read more
Definition: Microcredit can be defined as a lending system which allows a meagre sum as a loan to the low-income section of the society for supporting self-employment and other income-generating activities. This underprivileged segment was often ignored by the traditional credit system due to its low creditworthiness. This concept can be seen as a special … Read more
Definition: An Initial Public Offering (IPO) can be stated as a means of generating capital for a private company by publicly issuing its stock for the first time. Later, these securities can be traded after being listed over the stock exchange. An IPO is also acknowledged as ‘going public’ or ‘float’. A small company looking … Read more
Definition: Behavioral finance is that discipline of behavioral economics which analyzes the impact of human psychology on the investors’ actions. Thus, ultimately shaping the investing decisions of individuals, directors, managers, analysts, advisors, researchers, speculators and other market players. Behavioral finance contradicts the theory of traditional finance. This phenomenon considers human beings as normal and irrational … Read more