...Question-1: What is finance? Ans: Finance is the life blood of every corporation. In the era of modern trade and commerce, business firm have to decide from where they will raise fund, where they will invest and how much of the profit will be distributed among the shareholders. “Finance” Came from Latin word “finis” means “dealing with the money”.finace is called the art and science of managing money. At the micro level, finance is the study of financial planning, asset management and fund raising for business and financial institutions. At the macro level, finance is the study of financial institution and financial markets and how they operate within the financial systems in both the domestic and global economics. Scholar’s view: “Finance consists of providing and utilizing the money, capital rights, credit and funds of any kind which are employed in the operation of an enterprise.” _George R Terry “Finance is concerned with the process, institutionsmarkets and instruments involved in the transfer of money among and between individuals, business and governments”. _Lawrence J Gitman From the above discussion, it can be said that finance is the process of financial planning, identification of sources of fund raising, investment of fund, protection of fund, distribution...
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...Introduction Every business requires funds to operate. A company may need money to expand its business, buy assets, pay wages, or pay its debt. Others may need funds to cover the cost of unforeseen events such as accidents or natural disasters. The difficulties in obtaining these funds constitute one of the major challenges in running a business. The two major sources of business finance are internal and external funding. This paper examines the differences between internal and external sources of finance. It will also examine the advantages and disadvantages of each source. Internal sources of Finance Internal source of finance refers to funding generated within the business as opposed to financing obtained from outside sources. Internal funding can be obtained from retained earnings, sale of assets, depreciation, reduction or control of capital. Retained earnings: These are profits left over after a firm has settled its debts and paid out dividends to shareholders. The leftover funds can then be ploughed back into the business. The advantage of this method is that there is no borrowing cost associated with it. The firm has total control over the decision to use the funds and is not subjected to any vetting by lenders. The disadvantage of using retained profits as a source of funding is that the company may not have cash readily available in times of urgent need (Timimi, 2010). Sale of asset: The sale of assets is another source of internal financing. A business may...
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...Green climate fund frauds and corruption 1.0 Introduction Climate change especially global warming has been a heated issue these years. There are more and more countries, organizations and people caring about the global climate. And there are more and more organizations and fuds whose purpose is related to climate emerging, in order to counter climate change. In 2010, the United Nations Framework Convention on Climate Change set up the Green Climate Fund at the Conference of the Parties 16. The purpose of the Green Climate Fund is to provide help and support for developing countries to reduce the emissions of greenhouse gas. However there are many disputes about the Green Climate Fund also, one of which is that the Green Climate Fund exists risks of fraud and corruption. The purpose of this report is to have a better understanding of Green Climate Fund fraud and corruption by analyzing the factors causing fraud and corruption and the measures to eliminate fraud and corruption. This report consists of four sections. The first section is the brief introduction of Green Climate Fund. The second section is the analysis of Green Climate Fund fraud and corruption. The third section is how to prevent this kind of fraud and corruption. And the last section is the conclusion. 2.0 The factors causing Green Climate Fraud and corruption At the Conference of Parties 16 in 2010, decision 1/CP. 16 established the Green Climate Fund. The Green Climate Fund as an operating...
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...Jella Mae Macalima November 24, 2014 BSTM-2B Ms.Ana Esquierdo “9 RULES OF FREEDOM OF THE AIR” The freedoms of the air are a set of commercial aviation rights granting a country's airlines the privilege to enter and land in another country's airspace, formulated as a result of disagreements over the extent of aviation liberalisation in the Convention on International Civil Aviation of 1944, known as the Chicago Convention. The United States had called for a standardized set of separate air rights to be negotiated between states, but most other countries were concerned that the size of the U.S. airlines would dominate air travel if there were not strict rules. The freedoms of the air are the fundamental building blocks of the international commercial aviation route network. The use of the terms "freedom" and "right" confer entitlement to operate international air services only within the scope of the multilateral and bilateral treaties (air services agreements) that allow them. The first two freedoms concern the passage of commercial aircraft through foreign airspace and airports, the other freedoms are about carrying people, mail and cargo internationally. The first through fifth freedoms are officially enumerated by international treaties, especially...
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...granddaddy of worker sites.” – US News and World Report “A killer app.” – New York Times One of Forbes’ 33 “Favorite Sites” – Forbes “To get the unvarnished scoop, check out Vault.” – Smart Money Magazine “Vault has a wealth of information about major employers and jobsearching strategies as well as comments from workers about their experiences at specific companies.” – The Washington Post “A key reference for those who want to know what it takes to get hired by a law firm and what to expect once they get there.” – New York Law Journal “Vault [provides] the skinny on working conditions at all kinds of companies from current and former employees.” – USA Today HEDG FUND CARE VAULT CAREER GUIDE TO HEDGE FUNDS © 2007 Vault, Inc. HEDG FUND VAULT CAREER GUIDE TO HEDGE FUNDS ADITI A. DAVARE, HOLLY GOODRICH, MICHAEL MARTINEZ AND THE STAFF OF VAULT © 2007 Vault, Inc. Copyright © 2007 by Vault Inc. All rights reserved. All information in this book is subject to change without notice. Vault makes no claims as to the accuracy and reliability of the information contained within and disclaims all warranties. No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, for any purpose, without the express written permission of Vault Inc. Vault, the Vault logo, and “the most trusted name in career informationTM” are trademarks of Vault Inc. For...
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...Financial system of the Russian Federation Russian financial system is the collection of financial institutions, each of which contributes to the formation and use of funds, and state agencies and institutions offering financial activities. Russian financial system includes: 1. The state budget system, consisting of the federal budget, budgets of the Federation and the budgets of local governments; 2. Extrabudgetary funds; 3. State and bank credit 4. Insurance funds 5. Finance businesses and industries, which are used to regulate and stimulate the economy and social relations at the micro level. The Ministry of Finance develops and implements state policy in budget, tax, insurance, foreign exchange, banking, public debt, auditing and accounting. Ministry of Finance is headed by the Minister, appointed and dismissed by the President of the Russian Federation. Currently, the Minister of Finance of the Russian Federation is Alexei Leonidovich Kudrin and at the moment he has 7 deputies appointed and dismissed by the Government. The Ministry of Finance includes 18 departments and 4 federal services: for Fiscal and Budgetary Supervision, for Insurance Supervision, Federal Tax service, Federal Treasury. Functions of the Ministry of Finance: - Public finance - the country's economic analysis, preparation of long-and short-term forecasts of its development - State budget - organization of work on the formulation and enforcement of the federal budget, forecasting and preparation...
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...CHAPTER-1 INTRODUCTION FINANCE: Business concern needs finance to meet their requirements in the economic world. Any Kind of business activity depends on the finance. Hence, it is called as lifeblood of business organization. Whether the business concerns are big or small, they need finance to fulfil their business activities. In the modern world, all the activities are concerned with the economic activities and very particular to earning profit through any venture or activities. The entire business activities are directly related with making profit. (According to the economics concept of factors of production, rent given to landlord, wage given to labour, interest given to capital and profit given to shareholders or proprietors), a business concern needs finance to meet all the requirements. Hence finance may be called as capital, investment, fund etc., but each term is having different meanings and unique characters. Increasing the profit is the main aim of any kind of economic activity. MEANING OF FINANCE: Finance may be defined as the art and science of managing money. It includes financial service and financial instruments. Finance also is referred as the provision of money at the time when it is needed. Finance function is the procurement of funds and their effective utilization in business concerns. DEFINITION OF FINANCE: According to Khan and Jain, “Finance is the art and science of managing money”. Webster’s...
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...1400-1600s in central and Western Europe. The first global financiers the Fuggers (1487) in Germany; the first stock company in England (Russia Company 1553); the first foreign exchange market; the first stock exchange. In financial economics, a financial institution is an institution that provides financial services for its clients or members. Probably the most important financial service provided by financial institutions is acting as financial intermediaries. Most financial institutions are highly regulated by government bodies. Broadly speaking, there are three major types of financial institution. 1. Deposit-taking institutions that accept and manage deposits and make loans 2. Insurance companies and pension funds; 3. Brokers, Underwriters and investment funds Financial institutions deal with various financial activities associated with bonds, debentures, stocks, loans, risk diversification, insurance, hedging, retirement planning, investment, portfolio management, and many other types of related functions. With the help of their functions, the financial...
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...13. Distinction between Bank Credit and Short Term credit. 14. Characteristics of Short Term financing Meaning and nature of short-term financing: Short Term financing is that from of financing which embraces borrowing or lending of funds for a short period of time. It refers to the finance obtained on short term basis, usually one year or less in duration. Short term finance is secured for financing the current assets, for example, inventories. Short term finance is also known as working capital which is the excess of current assets over current liabilities. Current liabilities become due within one year and indicate the amount of short-term credit being utilized by the business. Practically all enterprises use the short-term credit as sources of finance. We find in the balance sheets of almost all the companies some kinds of current liabilities which are the indicator of the uses of short term finance in business. It has been found in the developed countries especially in USA that even the largest business establishment makes use of short term finance. The size of business has an important bearing on the use of short term finance. There is variation in the use of short term finance between the large and small sized business establishments. In...
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...Finance: Islamic and conventional Abdul Karim Abdullah “Finance” has both a theoretical and a practical meaning. In the theoretical sense, finance is the knowledge of acquiring and allocating (utilising) funds, public as well as private. In the practical sense, finance is the management (earning and spending) of funds to achieve specific objectives, personal or social. Public finance comprises collecting taxes as well as the expenditure of funds by all levels of government, federal, state or local. Private finance comprises personal as well as corporate finance. Public finance serves the public interest. Private finance, by contrast, serves private interests. Islamic finance, whether public or private, serves the Muslim community and is guided by the Shariah. Financing may be undertaken using one’s own funds (savings) or other people’s funds. Parties that lack surplus funds can utilise other people’s surplus funds by means of financial intermediaries. Conventional institutions comprise commercial (retail) banks, investment (wholesale) banks, credit unions, insurance companies, as well as mutual, pension and hedge funds. Conventional financial institutions such as banks collect surplus funds from savers and channel them to parties that experience a shortage of funds (borrowers). Banks earn interest income by lending depositors’ savings to borrowers at rates higher than what they pay to depositors. They also earn income in the form of fees and other charges. Parties seeking to...
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...Midterm 1 WQ08 Midterm 1 WQ08 KEY |1. |Financial intermediaries specialize in the production of money. | FALSE |2. |The brokerage function of an FI reduces transaction and information costs between a corporation and individual which encourages a lower rate of savings | | |than would otherwise exist. | FALSE |3. |Privately placed bonds and equity can be traded on the secondary market because of amendments to Regulation 144A. | TRUE |4. |Negotiable certificates of deposits are distinguished from fixed time deposits by their negotiability and active trading in the secondary markets. | TRUE |5. |The securitization of mortgages involves the pooling of mortgage loans for sale in the financial markets. | TRUE |6. |In recent years, the number of commercial banks in the U.S. has been increasing. | FALSE |7. |The credit union industry avoided much of the financial distress of the 1980s because of the short maturity and relatively less credit risk of their | | |assets. ...
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...FINANCIAL INSTITUTIONS IN PAKISTAN In financial economics, a financial institution acts as an agent that provides financial services for its clients. Financial institutions generally fall under financial regulation from a government authority. Types of Financial Institutions Common types of financial institutions in Pakistan include Banks, Investment Companies, Insurance Companies, Leasing Companies, Venture Capital & Discount Houses, Housing Finance Companies, and Mutual Funds. Bank A bank is a commercial or state institution that provides financial services, including issuing money in various forms, receiving deposits of money, lending money, and processing transactions and the creating of credit. Major players of the banking sector are categorized in the following heads: * Central Bank * Nationalized Scheduled Banks * De-Nationalized Scheduled Banks * Specialized Banks * Private Scheduled Banks * Foreign Banks * Investment Banks * Micro Finance Banks * Islamic Banks Central Bank A central bank, reserve bank or monetary authority, is an entity responsible for the monetary policy of its country or of a group of member states, such as the State Bank in Pakistan. Its primary responsibility is to maintain the stability of the national currency and money supply, but more active duties include controlling subsidized-loan interest rates, and acting as a "bailout" lender of last resort to the banking sector during times of financial...
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...goods and services. With wealth being accumulated in the form of money, specialised markets developed to enable the efficient transfer of funds from savers (surplus entities) to users of funds (deficit entities). A modern financial system comprises financial institutions, instruments and markets that provide a wide range of financial products and services. Importantly, a financial system encourages accumulated savings which are then available for investment within an economy. Financial assets, or financial instruments, incorporate attributes of risk, return (yield), liquidity and time-pattern of cash flows. Savers are able to satisfy their own personal preferences by choosing various combinations of these attributes. By encouraging savings, and allocating savings to the most efficient users, the financial system has an important role to play in the economic development and growth of a country. A range of different financial institutions has evolved to meet the needs of financial market participants and to support economic growth. Chapters 2 and 3 examine the major types of financial institutions. At this stage the institutions are categorised by the nature of their principal activities. Depository institutions, such as commercial banks, building societies and credit unions, specialise in gathering savings in the form of deposits and use those funds in the provision of loans to customers. Investment banks and merchant banks tend to specialise in the provision of off-balancesheet advisory...
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...SCALE ENTERPRISES IN NIGERIA BY SAS ARUWA BY SAS ARUWA Department of Economics and Management Sciences, Nigerian Defence Academy, Kaduna Abstract Government has identified the need for the development of Small and Medium Scale Enterprises (SME). One of such sectoral strategies is the introduction and pursuit of policies such as concessionary financing to encourage and strengthen the growth of SMEs in Nigeria. In this paper, a random sample of 10 formal/ informal finance sources and 20 SMEs in 6 selected Small and Medium industries in Kaduna and Abuja have been studied. We found that financing options for SMEs are numerous but access to these funds has been difficult inspite of several government initiatives. We also found that the Small and Medium Industries Equity Investments Scheme (SMIEIS) fund lacks standard guideline for fund disbursement, the unregulated informal finance institutions finance the SMEs much more than the formal sources and the informal sources make up more than half of the SMEs’ mix of funds. It is recommended that the informal source of financing is a potentially important source of micro financing. Savings in them should be further encouraged through regulation, government intervention by way of active participation of community and development banks in local business associations. SMEs should consider all financing options that maximize the value of the business enterprise. 1.1 INTRODUCTION The significant role Small and Medium Scale Enterprises (SMEs)...
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...main classes of financial instruments issued in a financial system • The flow of funds between savers / borrowers • Distinguish between various types of financial markets according to function • Appreciate the importance of globalisation • Understand the effects and consequences of a financial crisis on a financial system and economy 1-3 1 Functions of a Financial System • Money – Acts as medium of exchange – Solves the divisibility problem, i.e. where medium of exchange does not represent equal value for the p q parties to the transaction – Facilitates saving – Represents a store of wealth 1-4 Functions of a Financial System (cont.) • Role of markets – Facilitate exchange of goods and services by bringing opposite parties together establishing rates of exchange, i.e. prices • Financial Markets consist of: • Surplus units – Savers of funds available for lending • Deficit units – Borrowers of funds for capital investment and consumption 1-5 1.1 Functions of a Financial System (cont.) 1-6 2 Functions of a Financial System (cont.) • Financial instrument – Issued by a party raising funds, acknowledging a financial commitment and entitling the holder to specified future cash flows • Double coincidence of wants satisfied – A transaction between two parties that meets their mutual needs 1-7 Functions of a Financial System (cont.) • Flow of funds – Movement of funds through the financial system between savers and borrowers giving rise to financial...
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