Introduction An interim audit is one type of review done by the auditors before the final audit takes place. The decision to examine the books of accounts in between the financial year is taken by the higher management to ensure the veracity of the financial records. But why this audit is done? Auditing the books of any company can be both cumbersome and time consuming. The auditor has to verify and cross-check financial records before finalizing the values. Fig 1: Interim Audit Though auditors are professionals, there’s a chance of making inadvertent mistakes while examining the books. ... Read More

Introduction Unemployment is a major issue that affects economies worldwide. While there are many types of unemployment, frictional unemployment is a unique form caused by increased job searching. If the companies are able to figure out the quitting reasons, they can scale up the employee retention rate.  Frictional Unemployment Although frictional unemployment can be seen as a positive turn of events for the economy, it has the negative side as well like rise in unemployment rate, reduced money circulation in the economy, etc. Define Frictional Unemployment The gap between fresh employees joining for the first time and ... Read More

Introduction The free rider problem occurs when individuals benefit from a shared resource or public good without contributing their fair share Are you sick of making all the effort while others profit? Do you ever feel like you're being taken advantage of at work, school, or in relationships? Fig 1: Free Rider Problem You may be dealing with the free rider issue if this is the case. It's an aggravating condition that can breed hatred, lack of motivation, and, eventually, a breakdown in cooperation. But why is there a problem with free riders, and what can be ... Read More

Introduction If the government spends more than the available funds in the account, it goes into fiscal deficit. The respective government determines the total outlay at the end of the financial year. Fiscal deficit can be computed by subtracting total revenue from total expenditure. Fig 1: Government spending on multiple categories This value throws a light on government spending and projects the financial health of the economy on a whole. Situations like these occur due to high unemployment, uncollected loans lend to business at the time of financial crunch, recession, global market crash, etc. Define Fiscal Consolidation Fiscal ... Read More

Introduction Fed hike refers to the Federal Reserve's decision to increase interest rates, which can significantly affect the economy and financial markets. This tutorial overviews the Fed hike and its impact on inflation and financial products. The Federal Reserve's decision to raise interest rates can significantly impact the economy, affecting everything from borrowing costs to consumer spending. Many individuals and businesses wonder how the recent announcement of a possible interest rate increase will affect their financial plans and objectives. Define Fed Hike An increase in the benchmark interest rate set by the Federal Reserve is referred to as a ... Read More

Introduction Equity Dilution impacts the ownership stake in a company. Learn Are you a founder or an investor concerned about the impact of equity dilution on your ownership stake? You're not alone. Equity dilution is a critical issue affecting the total value of shares of the company. Initially, the owners of the company hold full control and ownership in the business. But when they go for raising funds or issuing stocks, the total stake decreases, resulting dilution of the ownership value in the company. This is not a good sign for any company, as the equity holdings, voting ... Read More

Introduction Buying stocks is an excellent way to accumulate wealth and generate passive income. When you invest in a company, you become a shareholder and have a stake in its profits. These earnings are frequently paid to shareholders as dividends. Unfortunately, there are times when businesses cannot pay dividends to their shareholders, resulting in dividend arrears. Dividends in Arrears: Explained Dividends are a way for organizations to distribute earnings to their shareholders. When a firm announces a dividend, it saves a portion of its income to pay to shareholders. But, sometimes, firms may find themselves in a ... Read More

Introduction Managing assets requires professional experience and legal advice. Discretionary trust is something that offers just that. It like a tree hierarchy where the trustee heads the trust and the beneficiaries follow. The trustee decides the number of beneficiaries this legal arrangement should have. As fiduciary duty is one of the main attributes of discretionary trust, the trustee acts in the best interests of the parties. Meaning of Discretionary Trust A discretionary trust is a legal arrangement in which a trustee holds and manages assets on behalf of beneficiaries. The trustee can distribute income and capital from the ... Read More

Introduction A contribution plan is a retirement plan for working class where the employee, and employer contributes a specific amount to the scheme. The invested money gets accumulated as the contributions progress. The returns on this plan are used for fulfilling individual's retirement goals.       Fig 1: Laying out ideas for Contribution Plan Define Contribution Plan When an individual or employer contributes a fixed amount to the retirement plan, it is said to be a contribution plan. The contributions are invested in mutual funds, bonds or even stocks. These funds are used to fund ... Read More

Introduction Complementary goods, as the name suggests, are those goods that are closely related to one another. Without the presence of one good, the other seems of no use. Have you ever wondered why you buy bread and butter simultaneously or why ink cartridges are sold with printers? The idea of complementary goods holds the key to the solution. Products or services that are dependent on one another are referred to as complementary goods. Fig 1: Complementary Goods Define Complementary Goods Goods and services typically used in tandem are known as complementary goods. When the consumption of one ... Read More