Net Present Value (NPV) Explained: Definitions, Formula and Examples Net present value (NPV) is a core concept in corporate finance and investment analysis. It is a project / investments appraisal technique that is considered to be fundamentally the most robust, and consistent with the concept of enhancing shareholder value in investment appraisal. By
Buy-Side vs Sell-Side: A Guide The expressions “Buy-side” and “sell-side” are a commonly-used piece of market shorthand to describe the kind of business a finance firm is involved in. The main activity of the financial markets is originating securities – bonds, shares and instruments like Syndicated loans – and distributing them to investors.
Guide to Financial Statements Financial Statements are the single most valuable source of financial information on a business – providing valuable insights into a company's financial health and performance. As a manager, investor, shareholder, employee, supplier, customer, government, or a creditor, having the ability to analyse and interpret financial statements is a critical
Bond Duration Guide: Definitions, Concepts and Examples Bond duration is a key concept in investment management and corporate finance that allows investors and financial professionals to measure the sensitivity of a bond's price to changes in interest rates. Understanding duration is crucial for assessing the amount of risk associated with a bond investment
Derivatives, Swaps and Options: A Guide Derivatives are financial contracts that derive their value from an underlying asset or index – in fact, anything that has an objective, independent measure of value. They have become essential tools in corporate finance and risk management. Swaps, forwards, futures and options are common types of derivatives
Pecking Order Theory: Definitions, Concepts and Examples Deciding how to finance a company's operations and growth is a what corporate finance is all about! Companies must choose how to raise capital from various internal and external sources. The pecking order theory provides an influential model for thinking about how companies make these financing decisions.
Mergers Explained: Definitions, Concepts and Examples Mergers are an important part of the corporate finance world. Companies pursue mergers for a variety of strategic reasons, and understanding mergers is key to interpreting events in the business world. This article will explain what mergers are, why they happen, the different types of mergers, the
Gearing Ratio Explained: Definitions, Formulas, and Examples Gearing ratio is an important financial metric that measures the level of debt used to finance a company’s assets and operations relative to equity. The gearing ratio gives insight into a company’s financial leverage and helps evaluate its financial risk. It doesn’t have an agreed textbook
