Finance revision

Introduction What is a rights issue? A rights issue is an issue of new shares for cash to existing shareholders in proportion to their existing holdings. A rights issue is, therefore, a way of......

Introduction What is equity? Equity is the term commonly used to describe the ordinary share capital of a business. Ordinary shares in the equity capital of a business entitle the holders to......

Introduction As we discussed in our introduction to asset finance, the use of hire purchase or leasing is a popular method of funding the acquisition......

Introduction There are three main ways of raising equity finance: - Retaining profits in the business (rather than distributing them to equity......

the cost of acquiring an asset, to coincide with the timing of the revenue generated by the business.The most common sources of medium term finance......

) The Stakeholder Concept Shareholder Concept - Maximising Shareholder Wealth In the theory of accounting and finance, it is assumed that the objective......

The importance of working capital Definition of working capital The net working capital of a business is its current assets less its current liabilities Current Assets include: - Stocks of......

Introduction The working capital cycle can be defined as: The period of time which elapses between the point at which cash begins to be expended on the production of a product and the collection......

Issues of Finance Overseas Direct Investment (ODI) Foreign investment from private firms. However, this goes to a very limited number of countries......

Accounting and Finance Topic List Company Accounts Capital and Revenue Expenditure Interpretation of profit and Loss and Balance Sheets Working......

run). This will move them closer to the MES and they can take better advantage of economies of scale. A lack of finance may prevent movement along......

Market failure occurs when the price mechanism fails to produce the goods consumers want. The Pareto optimum is not achieved. There is no productive or allocative efficiency. Efficiency......

There is general agreement that, before it can be regarded as useful in satisfying the needs of various user groups, accounting information should satisfy the following criteria:......

Annual report · An annual report is a document produced annually by companies designed to portray a true and fair view of the company's annual performance, with audited financial statements......

In our introduction to interpreting financial information we identified five main areas for investigation of accounting information. The use of ratio analysis in each of these areas is......

There are two main forms of accounting information: (1) Financial Accounts, and (2) Management Accounts Financial Accounts - A Definition Financial accounts are concerned with classifying,......

Introduction It is not easy to provide a concise definition of accounting since the word has a broad application within businesses and applications. The American Accounting Association......

It is easy to assume that the only users of accounting information are shareholders - since it is a requirement of company law that shareholders must receive periodic accounting statements.......

Incremental budget · This is a budget prepared using a previous period's budget or actual performance as a basis with incremental amounts added for the new budget period · The allocation of......

Introduction An important distinction is made in accounting between "current assets" and " "fixed assets". Current assets are those that form part of the circulating capital of a business. They......