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Banking & Finance Articles
Page 66 of 102
What is AAA rating and how is it useful?
The bonds are usually rated on their creditworthiness and long-term yield. AAA is such a rating. It is considered the best rating any bond can get and as mentioned, only bonds with a high degree of creditworthiness and yield get this rating.Businesses also get AAA ratings but the guidelines are too tough. For example, in 2020 only Microsoft and Johnson & Johnson got AAA ratings. The AAA ratings are offered to bonds that are interpreted to achieve the obligations in time. As is obvious, for the same reason, AAA bonds never face a lack of investors' interest.Creditworthiness and yield are ...
Read MoreWhat are the responsibilities an Accountant in an organization?
Accountant responsibility is the collective term associated with the responsibilities of the accountant. This may include official responsibilities including accounting or the responsibilities toward the stakeholders. In both cases, the accountant has to remain at the best of ethical standards to make the organization more accountable and high-performing in general.Responsibilities towards BusinessThe accountant looks at the profits and losses and prepares reports for the business managers for decision-making.Accountants help auditors to audit various departments, providing financial information required by them.Accountants look at the budgets, especially during the end of the financial year to make sure there is no overspending.They keep ...
Read MoreWhat are the primary roles of an Accountant?
An Accountant is a professional who prepares, interprets, and organizes the financial transaction of a business or an individual. Although the term "bookkeeper" is often used to mean accountants, there are many differences between the two.For example, accountants usually interpret financial information while bookkeepers just compile them. To become a bookkeeper, an associate degree is required while to become an accountant at least a bachelor's degree is needed.Additionally, accountants clearing the Certified Public Accountant (CPA) are considered the best in the profession. The CPA is the gold standard in the field of accountancy.Roles of an AccountantFollowing are some of the ...
Read MoreMarket Capitalization and its Role in Investment Strategies
Market Capitalization represents the total dollar market value of the total number of shares of a company. Also called market cap, it is determined by multiplying total number of outstanding stock and the price of one stock in the market.For an example, a company that has 1 million stocks each priced at $100 would have a market cap of $100 million. Market cap is used to determine a company’s size in contrast to its sales value or total assets outstanding value. It is therefore a very important figure for a company’s value for the investors.In times of acquisition, market cap ...
Read MoreExplain horizontal integration in strategic management
Horizontal integration is a process when a company acquires/merges/takes over another company, who are in the same product line or its competitor.Company will go for horizontal integration to increase its size and capacity, to reduce its risk and competition, increase its market share and to expand its geographical area.ReasonsThe reasons to opt for horizontal integration are as follows −Growth in industry.Due to lack of expertise.To manage operations effectively.AdvantagesThe advantages of horizontal integration are as follows −Increase in product features and market reach.Increase its global presence.Cost reduction.DisadvantagesThe disadvantages of horizontal integration are as follows −Legal restrictions (depends on country legal laws).No ...
Read MoreState the differences between copyright and patent
In simple words a patent is nothing but securing an invention and copyrights are nothing but securing original ideas. Both are governed by different rules and regulationsCopyrightsThe main objective of copyright is to secure the original idea or expression of idea of an artist. An artist's work can be a computer program, music, song, movie or any original work. Example − a book written by a cook.Others can't reproduce the same book or without permission of the book but however they can use the recipes used in it. To get copyrights, the artist first has to register with the respective ...
Read MoreDifferentiate between trademark and copyright
Copyright and trademark comes under intellectual property. Although both look the same, sometimes it creates confusion in the readers' mind. Let us give brief idea about copyright and trademark and difference between themCopyrightThe main objective of copyright is to protect the artist's original work. Work may be a photo, book, painting, software code; article etc. copyright gives the owner a right to reproduce their work or profit off their underlying work.The principle involved is pretty simple "if you create something new or original work, you have to choose what to do". To get the copyrights you have to register first ...
Read MoreExplain various types of intellectual properties
The term property means an individual or an organization owns it and it is protected by means of law. Intellectual properties are intangible assets of a business or a person. It can be a book, article in a magazine, a new design etc. which comes under intellectual properties.TypesThe types of intellectual properties are explained follows −PatentsA patent protects innovative ideas. It gives special rights to the respective owner/organization in making, selling and using the product or service period. A government authority or license conferring a right will be issued. An individual or an organization will approach the patent authority, submit ...
Read MoreExplain intellectual property valuation in mergers and acquisition
Intellectual property is a type of intangible asset owned by a company and it is legally protected from outside use without company consent.In other words, intellectual property is an asset, which has the same protective rights just like a physical asset. It includes patents, copyrights, trademarks, trade secrets etc.Intellectual property valuation matters due to the followingTime and amount spent for intellectual property registration.It involves legal costs and other costs.Amount spent for advertising brands etc.Areas that require intellectual property valuation are as follows −Licensing.Transfer pricing.Purchase/sale of assets.Financial reporting.Corporate financing.Litigations.Methods of intellectual property valuation are as follows −Factors to be considered for ...
Read MoreExplain market approach (relative value) in mergers and acquisitions
In market approach, valuation of business (intangible assets, ownership interest, etc.) are determined based on market price of similar assets/business that are sold in recent times/available in market.Sales, book value and P/E (price to earnings) are used as price indicators. After comparing with similar assets/business adjustments to qualities, quantities and size will be made.MethodsThe methods in market approach are as follows −Public company comparableThis method uses valuation metrics of publicly traded companies. Direct comparability is hard to attain in major situations. Selecting, adjusting and applying are complex processes, and need highly skilled, and experienced people to handle it. Guideline companies ...
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