The major differences between present value and net present value are as follows −Present valueSum of discounted value of cash flow at a particular discounting rate.Measures future cash flows today.Does not measures additional wealth.Does not provide any information about incremental value of a project/investment.Present value = Future value / (1 ... Read More

The major differences between invoice and bill are as follows −InvoiceWill have detail list of purchased products, their quantity, price, taxes (if any) etc.Handed over by seller to buyer at any time (before/after service or product).Advanced has to be paid.Records all the items placed.Invoices may arrive along with the goods ... Read More

The major differences between private equity and venture capital are as follows −Private equityInvestments made in those companies which are not publicly listed on any stock exchange.Buys from mature and public companies.Focus will be on all kind of industries.Want to acquire almost full stake of the company in an LBO.Combination ... Read More

The major differences between American Depository Receipt (ADR) and Global Depository Receipt (GDR) are as follows −American Depository Receipt (ADR)Main purpose is to acquire resources in USA.Main objective is to attract investments from foreign companies.Issued by US domestic capital market.Foreign companies can trade in US markets.US dollar as currency.Listed in ... Read More

The major differences between financial leverage and operating leverage are as follows −Financial leverageOperating leverageUse of capital structure to earn better returns and to reduce taxes.Tells about capital structure of the firm.Measures financial risk.Relates EBIT and EPS.More the financial leverage, more financial risk.Preferred high.DFL = EBIT/EBT.Rise to financial risk.Degree of ... Read More

The major differences between leasing and financing are as follows −LeasingFinancingLegal agreement between lessor and lessee.Ownership is with lessor.Principal and interest component is considered.Risk is with lessor.Very affordable.We can use the asset.Monthly payments are low.Choice of buy the asset or return to the lessor is available.Partial amount is paid to ... Read More

The major differences between International Financial Reporting Standards (IFRS) and Indian Generally Accepted Accounting Principles (GAAP) are as follows −IFRSIndian GAAPThe full form of IFRS is International Financial Reporting Standards.Developed by International Accounting Standards Board (IASB).A company has to disclose a note that its financial statements comply with IFRS.Adopted by ... Read More

The major differences between mutual funds and stock are as follows −Mutual fundsStockSimilar to shareholders and they own the fundPool of money collected from investorsThere is no possibilities of original issuesThere no nominal valueHave net asset valuesPartially paid or sometimes fully paidLow preferenceTraded once in a dayManaged by fund managerValue ... Read More

The major differences between stock and bonds are as follows −StockPartial ownership of a public limited company is provided in exchange of monetary value.Known as stockholders.No guarantee of return on investment.No fixed profit on investment.Return earned in terms of dividends.Generally purchased through stock exchange.High risk on investment.Maturity time depend on ... Read More

The major differences between debentures and bonds are as follows −DebenturesThe instrument used to raise long term finances.Issued by private companies.Known as debenture holders.Short term tenure.Debentures = assets – (Liabilities + shareholders reserve+ Bonds).They are both unsecure and secure in nature.High risk.Gives high interest rate.Liquidity is done after bond holders.Periodical ... Read More