Category: Concepts
Venture capital: Meaning, benefits, the process and more
Startup entrepreneurs look for investors who are willing to fund their startup’s product or idea. These startups require the capital to get their business off the ground or to realize (rapid) growth. In this article, we take a closer look at venture capital and its associated advantages and disadvantages. What is venture capital? Venture capital, also known as risk capital, is …
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Angel investor: meaning, advantages, how to find, and more
Aspiring entrepreneurs often face difficulties in finding the necessary funding to launch their businesses. Banks and other traditional financial institutions may not be willing to lend to early-stage ventures, which have not yet demonstrated their viability. This is where angel investors come in – individuals who are willing to invest their own money in startups …
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Working capital: meaning, importance, calculation, and more
What is working capital? Working capital is the amount needed daily to meet all obligations and expenses of a business for a financial year. A company must be capable of keeping itself running and this requires a healthy working capital. The working capital of a company is obtained by deducting the current liabilities (creditors and …
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Debt-to-equity ratio: meaning, importance, and more
What is debt-to-equity ratio? Debt-to-equity (D/E) ratio is used to check a company’s financial leverage and is calculated by dividing a company’s total liabilities by its shareholder equity. D/E ratio is a useful metric in corporate finance. It helps to measure the degree to which a company is financing its operations with debt rather than …
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Marketable securities: meaning, types, and more
The financial market is made up of investments of different classes that have other functions. Depending on how they are issued and traded, they are classified as real estate securities—which requires your attention. This is part of the most important concepts for investors and can help you decide how to compose your portfolio. In addition, …
Commercial bank: meaning, types, functions, and more
Commercial banks are an integral part of any country’s financial system. They perform several essential functions, including accepting deposits, lending funds, credit creation, providing payment services, and investing funds. Commercial banks have evolved over the years, adopting new technologies and expanding their services to meet the changing needs of their customers. However, they also face …
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Capital market: meaning, fundamentals, and more
Welcome to the fascinating world of capital markets! As a vital component of the global financial ecosystem, capital markets play a pivotal role in the allocation of resources and facilitating economic growth. But what exactly are capital markets, and what sets them apart from other financial markets? In this article, we will delve into the …
Initial Public Offering: Meaning, advantages, and more
What is an Initial public offering (IPO)? An initial public offering (IPO) is the process through which a company offers its shares to the general public for the first time. This allows the company to raise capital by selling ownership stakes to investors. Companies typically go public to access additional funding for growth, enhance their …
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Liquidity: meaning, measures, and more
What is liquidity? In the realm of finance, liquidity refers to the ease with which an asset or security can be bought or sold in the market without significantly affecting its price. It is a crucial concept that influences the functioning of financial markets and impacts the decisions of investors, businesses, and policymakers alike. Liquidity …
Fiscal policy: meaning, tools, implications, and more
What is fiscal policy? Fiscal policy involves the use of government tools to influence the level of economic activity. It encompasses both discretionary fiscal policy, where deliberate changes in taxation and spending are made in response to economic conditions, as well as automatic stabilizers, which are built-in features of the tax and spending system that …
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