For the professional manager, finance is the empirical discipline that translates operational activity into measurable economic outcomes. It is the language of value creation, resource allocation, and risk control.
Posts tagged as “Time Value”
This title, "The 7 Day MBA – Business Guide for Busy People" (often associated with the book by Chris Forrest or the concept popularized by Ambassador Udaya Indrarathna as a Mini-MBA program), represents an attempt to deliver the core knowledge of a traditional MBA curriculum in an extremely condensed and accessible format.
Discounted Cash Flow (DCF) Analysis is a fundamental valuation method used in finance to estimate the intrinsic value of an investment, project, company, or asset.
The Capital Asset Pricing Model (CAPM), developed in the 1960s by William Sharpe, John Lintner, and Jan Mossin, provides a framework to evaluate the expected return of an investment relative to its risk.
Valuation is at the heart of many financial decisions. Whether you're buying or selling a company, assessing the worth of an investment, or determining whether a stock is under or overvalued, knowing how to properly value assets is crucial.
The profitability index (PI), also known as the profit investment ratio (PIR) or value investment ratio (VIR), is a capital budgeting tool used to evaluate the attractiveness of a project or investment.
Capital budgeting is the process companies use to evaluate and decide on potential investments or projects that require large capital expenditures.
Corporate finance is a crucial branch of finance that focuses on how corporations manage their financial resources to achieve their strategic goals, primarily maximizing shareholder wealth.
Financial management is the strategic planning, organizing, directing, and controlling of financial undertakings in an organization or institute.
Here is where Investment Appraisal emerges as a critical tool, equipping businesses with a framework to analyze potential investments.
Internal Rate of Return (IRR) shows the actual percentage rate of return from the investment considering discounting.
Discounted Payback Period shows the time needed to earn enough profits to repay the original cost of the investment considering discounting.
Discounting is the process of bringing to the present value the future Net Cash flows that will occur during the lifetime of the project.
Average Rate of Return (ARR) gives the annual Net Cash Flows (or net profits) from a project as a percentage of the initial cost of the investment.
Payback Period (PBP) gives the length of time required for Net Cash Flows (or net profits) to pay back the initial capital cost of the investment.
Investment Appraisal assesses attractiveness of different capital projects. Projects usually involve a high expenditure and cannot be reversed.