Finance & Investment
Finance is one of the very subtle sectors of a business that can make or break entrepreneurs. Ideally, all companies need finances for daily operations, and this is what makes the concept of finance very important as an area for all organizations to cover. An investment is an asset or item that is purchased with the hope that it will generate income or appreciate in value at some point in the future.
An asset is a resource with economic value that an individual or corporation owns or controls with the expectation it will provide future benefit. An asset can is something which can generate cash flow, reduce expenses, or improve sales, regardless of whether it’s manufacturing equipment or a patent.
Liabilities are classified into two different types: Current liabilities and Non-current Liabilities. Current Liabilities refer to the kind of liabilities that expected to settle within 12 months after the reporting date. Non-current liabilities refer to liabilities that expected to settle in more than 12 months.
Referred to as shareholders’ equity (or owners’ equity for privately held companies), represents the amount of money that would be returned to a company’s shareholders if all of the assets were liquidated and all of the company’s debt was paid off in the case of liquidation.
Revenues in the income statement are records all together for both the revenues from the selling of entity main products or services (principle activities) as well as revenues that entity generate from the entity’s non-activities.
An expense is a cost that is “paid” or “remitted”, usually in exchange for something of value. Something that seems to cost a great deal is “expensive”. Something that seems to cost little is “inexpensive”. “Expenses of the table” are expenses of dining, refreshments, a feast, etc.
Bonds are debt instruments. When investors buy bonds, they’re lending money to a
company or a state, local or federal government. Bond investments include corporate, municipal, treasury and federal agency bonds.
Cash investments are high-quality, short-term securities that pay interest. Examples include Treasury Bills, Savings/Bank Accounts, Certificates of Deposit, and Money Market Funds. These investments offer safety of principal and liquidity.
A mutual fund is a diversified pool of stocks, bonds, or other investments that are pooled toward a common goal or objective. Mutual Funds can diversify a portfolio for you and limit the negative impact of poor performance.
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