IL&FS: Reasons and Effects of the Crises
Entrepreneurship

IL&FS: Reasons and Effects of the Crises

It was dark September for India’s financial market when debt repayment defaults by Mumbai-headquartered Infrastructure Leasing & Financial Services Limited (IL&FS) on inter-corporate deposits and commercial papers worth Rs 4.5 billion came into light. There was a fear that all housing finance companies would get resultant liquidity crunch effect and Lehman Brothers- like condition will come back.

Continue Reading about 2 months ago
What are the Geopolitical Factors that affect Stock Market?
Investing

What are the Geopolitical Factors that affect Stock Market?

G-E-O-P-O-L-I-T-I-C-A-L? Difficult to understand right? 

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Why is RBI cutting Repo rate constantly?
Investing

Why is RBI cutting Repo rate constantly?

Based on current and evolving macroeconomic situations, the Reserve Bank of India’s monetary policy committee decided to cut the repo rate under the liquidity adjustment facility by 35 basis points from 5.75 percent to 5.40 percent. This is the fourth time in a row that the RBI has cut the repo rate this calendar year (2019). In the last three monetary policy reviews, the rate cut is by 25 basis points. Repo rate is the benchmark-lending rate at which the central bank of the country lends money to commercial banks for about 7 to 14 days in the event of any shortfall of funds. The repo rate acts as a floor below which the short term interest rates don’t go. The repo rate is used by the central bank to control inflation. A decrease in repo rate means lower cost of short term money which reduces the EMIs on home and auto loans and the debt repayment burden, boosting economic growth.

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Importance of Contingent Liability in Financial Statement Analysis
Investing

Importance of Contingent Liability in Financial Statement Analysis

To answer this question, first, we have to understand what contingent liability is. A contingent liability is the potential or uncertain loss that may occur at some point as an outcome of a specific event. It is not an absolute obligation; it may or may not happen depending on how the future unfolds itself. It is recorded only if the liability amount can be estimated relatively.   According to the practice of disclosure in the conservative approach of accounting, the liability may be disclosed as a footnote in the financial statements of a company or not reported if conditions are not met. Therefore, the contingent liability has no such accounting treatment — for example, potential lawsuits, product warranties, and pending investigation. Contingent liabilities are possible obligations, which may or may not occur in the future and disclosed in the notes to the accounts. 

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Retained Earnings
Investing

Retained Earnings

When you start a business, you eventually start gaining the profits.So, is the entire profit given back to the owner? NO. It is because company would love to invest profit to the business again for future operations. Retained earnings are the part of net profit after tax that company has retained by not distributing to the shareholders to realize certain debts or used as an investment for future expansion plans. It is an important source of internal or self-financing by a company. So, retained earnings are the cumulative amount of profit or loss left after paying all the expenses and dividend to the shareholders. The cumulative here means it is a continuing account year after year and doesn’t close at the end of the accounting year. The retained earnings are also known as earned surplus, retained capital, plowing back of profits or accumulated earnings.

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Term policy and endowment policy
Investing

Term policy and endowment policy

“A life insurance policy is something that provides a dedicated sum of money on the demise of the policyholder or after a certain period of time.”

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Difference between DVR and Ordinary Share
Investing

Difference between DVR and Ordinary Share

For understanding the distinction between ordinary share and differential voting share, we've to understand initial perceive of each term: Ordinary shares- These shares represent ownership capital. If you own an ordinary share, you'll vote at Annual General Meetings (AGMs). Shareholders get one vote per share. Ordinary shareholders receive dividends as their share of profits for contributing capital to the business. The payment of dividend to an ordinary shareholder is decided by the company. The dividends on ordinary shares fluctuate year to year, in contrast to those of preference shares. Differential voting rights (DVR) SHARES- In Equity investments, most folks involved concerning returns solely. This can be the consideration why company gives retail investor an opportunity to earn extra dividend by sacrificing voting rights. It helps the promoter retain higher decision making power by holding shares with superior voting rights or issue shares with lower or tractional voting rights to different investors.

Continue Reading about 3 months ago