Do you ever feel like you are living paycheck-to-paycheck? Are your finances a source of stress for you and your family? If so, zero-based budgeting may be the solution. Zero-based budgeting is an effective way to manage money and get on the path to financial freedom. It allows people to allocate their income towards their […]
Asset Liability Management (ALM)
Definition: Asset Liability Management (ALM) is a strategic framework that emphasizes on settling the liabilities through the company’s cash flow and assets to avoid any sort of penalty or interest on delayed payments or non-repayments of such debts. It ensures stability, higher gain, liquidity, better return to shareholders, proper fund allocation and lower risk of […]
Cognitive Dissonance
Cognitive dissonance refers to a mental state of conflict whereby an individual’s behaviour doesn’t go hand in hand with his/her mindset or psychology. This is because an individual’s mind is always stuck between different perceptions, values, beliefs and attitudes. Today, his theory of cognitive dissonance is considered one of the most influential theories in social […]
Succession Planning
Definition: Succession planning refers to the process or strategy through which an organization identifies and develops candidates competent to take up the leadership and other positions that the present occupants will vacate in the future due to expected or unexpected reasons like retirement, relocation to other companies, incapacitation, death, etc. These potential replacements can be […]
ESG Investing
Definition: ESG investing is a form of investment that emphasizes non-financial but environmental, social, and governance factors or metrics (rather than just financial returns) when making investment decisions. It is an ethical perspective towards the company’s performance and potential. ESG investing goes like this: E – Environmental Factors S – Social Factors G – Governance Factors These are the […]
Retail Banking
Definition: Retail banking is a financial segment that caters the requirements of individuals as customers, majorly comprising of the low-income groups of the society. It facilitates the common people to make deposits, avail credit and get their funds managed systematically. Personal banking deals in a huge volume of financial transactions although these are of small […]
Financial Intermediaries
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 […]
Financial Ratio Analysis
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. […]
Treasury Stock
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 […]
Market Capitalization
Definition: Market capitalization is explained as the company’s market value denoted in dollar amount. It is the valuation of a company’s outstanding or publicly traded shares available for exchange in the open market or stock market. However, it cannot be misinterpreted as the overall corporate value. The market cap determines the risk and returns associated […]