This document provides an overview of security analysis and portfolio management. It discusses key concepts such as investment, speculation, gambling, and different investment avenues. It also covers fundamental analysis, including financial statement analysis and ratio analysis. Technical analysis and different types of charts used are also explained. The goal is to help students apply security analysis and portfolio management principles in evaluating financial investments.
Corporate finance deals with arranging funds for corporations and increasing shareholder value through financial decisions related to capital budgeting, capital structure, working capital management, and dividend policy. This course provides a framework for analyzing major financial decisions through concepts like the time value of money, capital budgeting, and working capital management. Chapters cover topics such as sources of finance, capital structure, leverage, and dividend policy.
This document provides an introduction to Islamic investment. It defines key terms like investing, finance, and investors. It also classifies investments as real or financial, marketable or non-marketable, and transferable or non-transferable. The nature of investment management is discussed, including balancing risk and return. The investment management process is outlined in five steps - setting an investment policy, analyzing securities, valuing assets, constructing a portfolio, and evaluating performance. Finally, the objectives of investment are explained as earning income, achieving capital appreciation, ensuring safety and liquidity of funds.
The document discusses fundamental analysis, which examines financial and non-financial factors to determine a security's intrinsic value. It covers quantitative factors like financial metrics and qualitative factors like management quality. Analysts use public data on the economy, industry, and company to estimate a stock's fair value and identify undervalued or overvalued stocks. Key financial statements like the balance sheet, income statement, and statement of cash flows provide quantitative data for fundamental analysis.
Equity Research primarily means analyzing company's financials, perform ratio analysis, forecast the financial in excel (financial modeling) and explore scenarios with an objective of making BUY/SELL stock investment recommendation.
financial management - long term (strategic) decisionZenn Vanrim Lopez
This document discusses strategic decisions, characteristics of strategic decisions, and compares strategic decisions to administrative and operational decisions. Some key points:
- Strategic decisions are long-term decisions that deal with an organization's entire resources, environment, and future planning. They involve major changes and risks.
- Strategic decisions harmonize organizational capabilities with opportunities and threats. They determine the organization's overall activities and range.
- Strategic decisions differ from administrative decisions, which are routine and facilitate strategic decisions, and operational decisions, which are technical and help execute strategic decisions.
- The document provides an overview of strategic decisions, administrative decisions, and operational decisions to highlight their differences.
Finance is one of the important aspects of the business. It is the art of securing and monitoring the company’s money. Business finance lies in accounting for keeping business activities smoothly in the long-term.
A sample PPT assignment by OnlineAssignmentsHelp.com
Demand forecasting involves predicting future demand for products and services. It can be done at the micro, industry, or macro level. Accurate forecasting is important for production planning, inventory control, investment decisions, and more. Common forecasting methods include surveys of buyers and experts, statistical techniques like time series analysis and regression, and qualitative approaches. Forecasts can be short, medium, or long term depending on the planning horizon. While forecasts cannot be perfectly precise, demand forecasting provides valuable guidance for business decision making.
Kiran Kumar has a PhD in finance from the Indian Institute of Science. He has over 20 research papers and has received five best research paper awards. He is currently an associate professor at IIM Indore and has previously held positions at the National Institute of Securities Markets and ISB. His research focuses on high frequency data analysis, market microstructure, and derivatives.
Finance involves making investment and funding decisions to allocate resources and generate returns. The three major corporate finance decisions are investments, financing, and dividends. Investments should earn returns above the hurdle rate, financing should minimize costs, and excess cash should be returned to shareholders if no high-return investments exist. The traditional goal of corporate finance is to maximize
Corporate finance deals with arranging funds for corporations and increasing shareholder value through financial decisions related to capital budgeting, capital structure, working capital management, and dividend policy. This course provides a framework for analyzing major financial decisions through concepts like the time value of money, capital budgeting, and working capital management. Chapters cover topics such as sources of finance, capital structure, leverage, and dividend policy.
This document provides an introduction to Islamic investment. It defines key terms like investing, finance, and investors. It also classifies investments as real or financial, marketable or non-marketable, and transferable or non-transferable. The nature of investment management is discussed, including balancing risk and return. The investment management process is outlined in five steps - setting an investment policy, analyzing securities, valuing assets, constructing a portfolio, and evaluating performance. Finally, the objectives of investment are explained as earning income, achieving capital appreciation, ensuring safety and liquidity of funds.
The document discusses fundamental analysis, which examines financial and non-financial factors to determine a security's intrinsic value. It covers quantitative factors like financial metrics and qualitative factors like management quality. Analysts use public data on the economy, industry, and company to estimate a stock's fair value and identify undervalued or overvalued stocks. Key financial statements like the balance sheet, income statement, and statement of cash flows provide quantitative data for fundamental analysis.
Equity Research primarily means analyzing company's financials, perform ratio analysis, forecast the financial in excel (financial modeling) and explore scenarios with an objective of making BUY/SELL stock investment recommendation.
financial management - long term (strategic) decisionZenn Vanrim Lopez
This document discusses strategic decisions, characteristics of strategic decisions, and compares strategic decisions to administrative and operational decisions. Some key points:
- Strategic decisions are long-term decisions that deal with an organization's entire resources, environment, and future planning. They involve major changes and risks.
- Strategic decisions harmonize organizational capabilities with opportunities and threats. They determine the organization's overall activities and range.
- Strategic decisions differ from administrative decisions, which are routine and facilitate strategic decisions, and operational decisions, which are technical and help execute strategic decisions.
- The document provides an overview of strategic decisions, administrative decisions, and operational decisions to highlight their differences.
Finance is one of the important aspects of the business. It is the art of securing and monitoring the company’s money. Business finance lies in accounting for keeping business activities smoothly in the long-term.
A sample PPT assignment by OnlineAssignmentsHelp.com
Demand forecasting involves predicting future demand for products and services. It can be done at the micro, industry, or macro level. Accurate forecasting is important for production planning, inventory control, investment decisions, and more. Common forecasting methods include surveys of buyers and experts, statistical techniques like time series analysis and regression, and qualitative approaches. Forecasts can be short, medium, or long term depending on the planning horizon. While forecasts cannot be perfectly precise, demand forecasting provides valuable guidance for business decision making.
Kiran Kumar has a PhD in finance from the Indian Institute of Science. He has over 20 research papers and has received five best research paper awards. He is currently an associate professor at IIM Indore and has previously held positions at the National Institute of Securities Markets and ISB. His research focuses on high frequency data analysis, market microstructure, and derivatives.
Finance involves making investment and funding decisions to allocate resources and generate returns. The three major corporate finance decisions are investments, financing, and dividends. Investments should earn returns above the hurdle rate, financing should minimize costs, and excess cash should be returned to shareholders if no high-return investments exist. The traditional goal of corporate finance is to maximize
The PowerPoint presentation covers key concepts in financial management including:
- Definitions of finance and financial management from various authors.
- The nature and scope of financial management, including the functions of investment, financing, and dividend decisions.
- The objectives of financial management including maximization of profits, returns, and shareholder wealth.
- Key concepts in investment decisions like risk-return tradeoff, discounting and present value calculations.
- Other important financial concepts covered include cost of capital, capital budgeting techniques, and valuation of annuities, perpetuities and growing cash flows.
This document provides an overview of investment banking, equity research, and equity valuation models. It discusses the functions of investment banks in raising corporate finance. Equity research involves fundamental analysis, including economic, industry, and company analysis, as well as technical analysis based on supply and demand. Equity valuation models covered include the Capital Asset Pricing Model (CAPM), Dividend Discount Model (DDM), and price-earnings ratios, which relate stock price to earnings per share. The document aims to explain these key concepts in investment banking and equity analysis.
The document discusses the new issue market, which is where new securities or stocks are issued to acquire capital for new or existing companies. It describes the functions of origination, underwriting, and distribution. Various parties involved include managers, registrars, underwriters, bankers, and advertising agents. Methods for floating shares include prospectus, bought deals, private placements, rights issues, and book building. Measures to protect investors include project appraisal, underwriting, disclosure requirements, exchange clearance, and redressal of grievances. Recent trends include aggressive pricing, low liquidity and returns, and economic slowdown.
1. The document covers topics related to financial management including time value of money, risk and return, bond valuation, stock valuation, working capital management, cost of capital, and capital structure.
2. It defines key concepts such as annuities, perpetuities, different types of bonds and stocks, and provides examples of solved problems related to these topics.
3. Various ratios used to analyze financial statements are also discussed along with the importance of analyzing sources and uses of funds for business finance.
The document discusses various concepts related to portfolio management and investments. It defines portfolio management as building and overseeing investments to meet long-term financial goals and risk tolerance. It also defines investment, investor, holding period return (HPR), holding period yield (HPY), arithmetic mean (AM) and geometric mean (GM) for calculating historical returns. It provides examples to calculate expected returns and discusses different types of risk like business, financial, liquidity and inflation risk.
This document discusses investment decisions and the investment process. It covers several key points:
1. Investing allows individuals to increase future consumption by earning returns on savings over time. Not investing means savings earn no returns and lose value to inflation.
2. Investing has risks like sacrifice of current consumption, inflation risk, and investment risk. Investors require compensation for these risks in the form of expected returns.
3. The investment decision process involves security analysis like fundamental valuation of individual assets, and portfolio management like constructing a diversified portfolio and managing it over time with either a passive or active strategy.
4. Common errors include misunderstanding of risk and return, not having a clear investment policy, making
Understanding of Investment and Investment decision process
The document defines key investment terms like investment, financial assets, marketable securities, and speculation. It outlines the differences between investment and speculation. The investment decision process involves security analysis, including fundamental and technical analysis, as well as portfolio management approaches. Common errors in investment decision making include inadequate understanding of risk and return, lack of a clear investment policy, relying too much on past performance, irrational trading behaviors, ignoring costs, improper diversification, and wrong attitudes towards profits and losses.
This document provides an overview of mutual funds, including:
- A mutual fund is a trust that pools money from investors and invests it in stocks, bonds, and other securities. Income and capital gains are shared proportionally among investors.
- There are various types of mutual funds categorized by investment objectives (equity, debt, hybrid/balanced) and maturity periods (open-ended, closed-ended).
- Key terms include net asset value (NAV), expense ratio, exit loads, growth vs. dividend options, and alpha which measures a fund's return compared to its benchmark index.
- Advantages of mutual funds include liquidity, diversification, professional management, flexibility, and tax benefits for some funds
Overview of Corporate Finance in India a presentationfootydigarse
Slide 1: Introduction
Welcome to the presentation on Corporate Finance in India.
Overview of the financial landscape and key aspects of corporate finance.
Slide 2: Importance of Corporate Finance
Explanation of why corporate finance is vital for businesses.
Role in maximizing shareholder value, strategic decision-making, and capital allocation.
Slide 3: Financial Markets in India
Overview of India's financial markets: stock exchanges, bond markets, money markets.
Regulatory bodies such as SEBI (Securities and Exchange Board of India).
Slide 4: Sources of Corporate Finance
Equity financing: IPOs, rights issues, private placements.
Debt financing: bank loans, corporate bonds, debentures.
Hybrid instruments: convertible bonds, preference shares.
Slide 5: Capital Structure Decisions
Explanation of capital structure and its importance.
Factors influencing capital structure decisions.
Trade-off between debt and equity financing.
Slide 6: Valuation Methods
Common valuation methods in India: Discounted Cash Flow (DCF), Comparable Company Analysis (CCA), Precedent Transactions Analysis.
Importance of accurate valuation for investment decisions.
Slide 7: Corporate Governance
Overview of corporate governance principles in India.
Role of the board of directors, transparency, and accountability.
Slide 8: Risk Management
Types of financial risks faced by Indian corporations: market risk, credit risk, operational risk.
Risk management strategies: hedging, diversification, insurance.
Slide 9: Mergers and Acquisitions (M&A)
Trends in M&A activity in India.
Motivations behind M&A transactions.
Regulatory framework and approval process.
Slide 10: Case Studies
Analysis of notable corporate finance transactions in India.
Learnings from successful and unsuccessful deals.
Slide 11: Future Outlook
Emerging trends and opportunities in Indian corporate finance.
Potential challenges and how to address them.
Slide 12: Conclusion
Recap of key points covered in the presentation.
Importance of effective corporate finance management for sustainable growth.
Slide 13: Questions and Discussion
Open the floor for questions and discussion.
Investment management chapter 3 the basic of investment decisionsHeng Leangpheng
This document discusses investment management and the investment decision process. It covers why people invest, the risks and returns of different asset classes, and the steps involved in making investment decisions. The key points are:
1) People invest to increase future consumption and earn returns on their savings. Different assets have different risk-return tradeoffs, with more risk generally requiring more potential return.
2) Making investment decisions involves analyzing individual securities, building a portfolio, and managing it over time either passively or actively.
3) Common errors include misunderstanding risk and return, not having a clear investment policy, and making emotional or irrational decisions rather than thoughtful assessments.
The document provides an overview of the stock market and key concepts related to technical analysis. It defines the stock market as the business of buying and selling shares of companies and explains why companies issue stock and why people buy it. It then discusses key technical analysis concepts like bulls and bears, trends in prices, and the three assumptions of technical analysis - that the market discounts everything, price moves in trends, and history tends to repeat itself. It also compares technical analysis to fundamental analysis and their differences in terms of time horizon and goals.
The document discusses security analysis, which refers to analyzing trading securities to understand their risk and estimate their return. There are two main approaches: fundamental analysis and technical analysis. Fundamental analysis involves analyzing economic, industry, and company-specific factors, including financial statements and ratios. Technical analysis focuses solely on historical price and volume data to identify trends and make predictions. While fundamental analysis takes a long-term view, technical analysis uses shorter timeframes like weeks or days to inform trading decisions. Both aim to identify undervalued and overvalued securities.
The Meaning & Role Of Finance Management
Points Discussed are:
1. What is Finance?
2. Functions of financial Manager
3. The Goals of Financial Management
4. Roles of Financial Management
5. Functions of Financial Management
6. Activities Of Financial Management
7. Conclusion
Introduction to Financial Management.docxrobelynverano
This document provides an overview of financial management roles and responsibilities within a corporation. It discusses shareholders who elect the board of directors, whose primary responsibility is ensuring the corporation operates in the shareholders' best interests. The president oversees company operations and strategy implementation with assistance from vice presidents of different functional areas like marketing, production, and administration. Financial management decisions include funding long-term investments and working capital, considering factors like risk, return, and financing costs.
A study on perspective of investors about mutualRatan Gohel
This study analyzed perspectives of investors on mutual fund investments through a survey of 87 investors who use Angel Broking services. Key findings include: most investors prefer low risk and high return investments and lack knowledge about mutual funds. Many earn profits but some lose money in mutual funds. Investments in mutual funds are perceived to be decreasing as returns are not seen as better than other options. Recommendations focus on increasing awareness through education and publicity of past performance to build confidence and incentivize agents.
The document discusses investment process and approaches. It describes the 5 stages of the investment process: 1) framing an investment policy, 2) security analysis, 3) valuation, 4) portfolio construction, and 5) portfolio evaluation. It then discusses the 3 main approaches to investment: 1) fundamental analysis which examines economic, industry and company factors, 2) technical analysis which analyzes past stock price and volume trends, and 3) the efficient market hypothesis which states stock prices reflect all available information and follow random patterns.
This ppt contains Meaning of investment, Features of investment, differences between Investment and Speculation ,investment vs.Gambling, Featues of investment
Funding option for mergers & acquisionhkhirani
This document discusses various methods of payment that can be used for mergers and acquisitions, including issuing equity shares, preference shares, secured debt instruments, or cash payments from the acquiring company. It also discusses sources of funding for these payments, such as internal accruals, IPOs, rights issues, private placements, bank loans, and overseas markets. The document provides examples of companies that have used different methods, such as Tata Motors issuing equity shares and taking a bridge loan to acquire Jaguar Land Rover.
Equity in Accounting: Meaning, Types, & Practical Examples | Academy Tax4wealth Academy Tax4wealth
The value of equity can be determined through the current share price or a valuation established by professionals or investors. Enroll now, and make your career.
For more information, visit us at:-
https://academy.tax4wealth.com/blog/what-is-equity-in-accounting
The document discusses data analysis and the discussion of findings in research. It provides details on the differences between data analysis and discussion of findings. It explains that data analysis involves evaluating and analyzing collected data using logical reasoning to form findings or conclusions. It discusses important issues in data analysis like using sufficient datasets and samples and not delegating the analysis. It also discusses common components of qualitative data analysis such as data archiving, exploring cases, finding themes and categories. The discussion of findings section explains that this part involves interpreting results in relation to research questions and existing knowledge to demonstrate what is known, differences found, and how findings extend knowledge in the field.
This document provides an overview of a course on Elements of Logistics and Inventory Control presented by Mr. Raashid Yusuph at the Muslim University of Morogoro. The course covers topics such as introduction to logistics, managing logistics, logistics outsourcing, and inventory control. Assessment includes tests, assignments, and a final examination. The document also discusses key concepts in logistics including the supply chain, transportation modes, and the evolution of logistics integration.
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The PowerPoint presentation covers key concepts in financial management including:
- Definitions of finance and financial management from various authors.
- The nature and scope of financial management, including the functions of investment, financing, and dividend decisions.
- The objectives of financial management including maximization of profits, returns, and shareholder wealth.
- Key concepts in investment decisions like risk-return tradeoff, discounting and present value calculations.
- Other important financial concepts covered include cost of capital, capital budgeting techniques, and valuation of annuities, perpetuities and growing cash flows.
This document provides an overview of investment banking, equity research, and equity valuation models. It discusses the functions of investment banks in raising corporate finance. Equity research involves fundamental analysis, including economic, industry, and company analysis, as well as technical analysis based on supply and demand. Equity valuation models covered include the Capital Asset Pricing Model (CAPM), Dividend Discount Model (DDM), and price-earnings ratios, which relate stock price to earnings per share. The document aims to explain these key concepts in investment banking and equity analysis.
The document discusses the new issue market, which is where new securities or stocks are issued to acquire capital for new or existing companies. It describes the functions of origination, underwriting, and distribution. Various parties involved include managers, registrars, underwriters, bankers, and advertising agents. Methods for floating shares include prospectus, bought deals, private placements, rights issues, and book building. Measures to protect investors include project appraisal, underwriting, disclosure requirements, exchange clearance, and redressal of grievances. Recent trends include aggressive pricing, low liquidity and returns, and economic slowdown.
1. The document covers topics related to financial management including time value of money, risk and return, bond valuation, stock valuation, working capital management, cost of capital, and capital structure.
2. It defines key concepts such as annuities, perpetuities, different types of bonds and stocks, and provides examples of solved problems related to these topics.
3. Various ratios used to analyze financial statements are also discussed along with the importance of analyzing sources and uses of funds for business finance.
The document discusses various concepts related to portfolio management and investments. It defines portfolio management as building and overseeing investments to meet long-term financial goals and risk tolerance. It also defines investment, investor, holding period return (HPR), holding period yield (HPY), arithmetic mean (AM) and geometric mean (GM) for calculating historical returns. It provides examples to calculate expected returns and discusses different types of risk like business, financial, liquidity and inflation risk.
This document discusses investment decisions and the investment process. It covers several key points:
1. Investing allows individuals to increase future consumption by earning returns on savings over time. Not investing means savings earn no returns and lose value to inflation.
2. Investing has risks like sacrifice of current consumption, inflation risk, and investment risk. Investors require compensation for these risks in the form of expected returns.
3. The investment decision process involves security analysis like fundamental valuation of individual assets, and portfolio management like constructing a diversified portfolio and managing it over time with either a passive or active strategy.
4. Common errors include misunderstanding of risk and return, not having a clear investment policy, making
Understanding of Investment and Investment decision process
The document defines key investment terms like investment, financial assets, marketable securities, and speculation. It outlines the differences between investment and speculation. The investment decision process involves security analysis, including fundamental and technical analysis, as well as portfolio management approaches. Common errors in investment decision making include inadequate understanding of risk and return, lack of a clear investment policy, relying too much on past performance, irrational trading behaviors, ignoring costs, improper diversification, and wrong attitudes towards profits and losses.
This document provides an overview of mutual funds, including:
- A mutual fund is a trust that pools money from investors and invests it in stocks, bonds, and other securities. Income and capital gains are shared proportionally among investors.
- There are various types of mutual funds categorized by investment objectives (equity, debt, hybrid/balanced) and maturity periods (open-ended, closed-ended).
- Key terms include net asset value (NAV), expense ratio, exit loads, growth vs. dividend options, and alpha which measures a fund's return compared to its benchmark index.
- Advantages of mutual funds include liquidity, diversification, professional management, flexibility, and tax benefits for some funds
Overview of Corporate Finance in India a presentationfootydigarse
Slide 1: Introduction
Welcome to the presentation on Corporate Finance in India.
Overview of the financial landscape and key aspects of corporate finance.
Slide 2: Importance of Corporate Finance
Explanation of why corporate finance is vital for businesses.
Role in maximizing shareholder value, strategic decision-making, and capital allocation.
Slide 3: Financial Markets in India
Overview of India's financial markets: stock exchanges, bond markets, money markets.
Regulatory bodies such as SEBI (Securities and Exchange Board of India).
Slide 4: Sources of Corporate Finance
Equity financing: IPOs, rights issues, private placements.
Debt financing: bank loans, corporate bonds, debentures.
Hybrid instruments: convertible bonds, preference shares.
Slide 5: Capital Structure Decisions
Explanation of capital structure and its importance.
Factors influencing capital structure decisions.
Trade-off between debt and equity financing.
Slide 6: Valuation Methods
Common valuation methods in India: Discounted Cash Flow (DCF), Comparable Company Analysis (CCA), Precedent Transactions Analysis.
Importance of accurate valuation for investment decisions.
Slide 7: Corporate Governance
Overview of corporate governance principles in India.
Role of the board of directors, transparency, and accountability.
Slide 8: Risk Management
Types of financial risks faced by Indian corporations: market risk, credit risk, operational risk.
Risk management strategies: hedging, diversification, insurance.
Slide 9: Mergers and Acquisitions (M&A)
Trends in M&A activity in India.
Motivations behind M&A transactions.
Regulatory framework and approval process.
Slide 10: Case Studies
Analysis of notable corporate finance transactions in India.
Learnings from successful and unsuccessful deals.
Slide 11: Future Outlook
Emerging trends and opportunities in Indian corporate finance.
Potential challenges and how to address them.
Slide 12: Conclusion
Recap of key points covered in the presentation.
Importance of effective corporate finance management for sustainable growth.
Slide 13: Questions and Discussion
Open the floor for questions and discussion.
Investment management chapter 3 the basic of investment decisionsHeng Leangpheng
This document discusses investment management and the investment decision process. It covers why people invest, the risks and returns of different asset classes, and the steps involved in making investment decisions. The key points are:
1) People invest to increase future consumption and earn returns on their savings. Different assets have different risk-return tradeoffs, with more risk generally requiring more potential return.
2) Making investment decisions involves analyzing individual securities, building a portfolio, and managing it over time either passively or actively.
3) Common errors include misunderstanding risk and return, not having a clear investment policy, and making emotional or irrational decisions rather than thoughtful assessments.
The document provides an overview of the stock market and key concepts related to technical analysis. It defines the stock market as the business of buying and selling shares of companies and explains why companies issue stock and why people buy it. It then discusses key technical analysis concepts like bulls and bears, trends in prices, and the three assumptions of technical analysis - that the market discounts everything, price moves in trends, and history tends to repeat itself. It also compares technical analysis to fundamental analysis and their differences in terms of time horizon and goals.
The document discusses security analysis, which refers to analyzing trading securities to understand their risk and estimate their return. There are two main approaches: fundamental analysis and technical analysis. Fundamental analysis involves analyzing economic, industry, and company-specific factors, including financial statements and ratios. Technical analysis focuses solely on historical price and volume data to identify trends and make predictions. While fundamental analysis takes a long-term view, technical analysis uses shorter timeframes like weeks or days to inform trading decisions. Both aim to identify undervalued and overvalued securities.
The Meaning & Role Of Finance Management
Points Discussed are:
1. What is Finance?
2. Functions of financial Manager
3. The Goals of Financial Management
4. Roles of Financial Management
5. Functions of Financial Management
6. Activities Of Financial Management
7. Conclusion
Introduction to Financial Management.docxrobelynverano
This document provides an overview of financial management roles and responsibilities within a corporation. It discusses shareholders who elect the board of directors, whose primary responsibility is ensuring the corporation operates in the shareholders' best interests. The president oversees company operations and strategy implementation with assistance from vice presidents of different functional areas like marketing, production, and administration. Financial management decisions include funding long-term investments and working capital, considering factors like risk, return, and financing costs.
A study on perspective of investors about mutualRatan Gohel
This study analyzed perspectives of investors on mutual fund investments through a survey of 87 investors who use Angel Broking services. Key findings include: most investors prefer low risk and high return investments and lack knowledge about mutual funds. Many earn profits but some lose money in mutual funds. Investments in mutual funds are perceived to be decreasing as returns are not seen as better than other options. Recommendations focus on increasing awareness through education and publicity of past performance to build confidence and incentivize agents.
The document discusses investment process and approaches. It describes the 5 stages of the investment process: 1) framing an investment policy, 2) security analysis, 3) valuation, 4) portfolio construction, and 5) portfolio evaluation. It then discusses the 3 main approaches to investment: 1) fundamental analysis which examines economic, industry and company factors, 2) technical analysis which analyzes past stock price and volume trends, and 3) the efficient market hypothesis which states stock prices reflect all available information and follow random patterns.
This ppt contains Meaning of investment, Features of investment, differences between Investment and Speculation ,investment vs.Gambling, Featues of investment
Funding option for mergers & acquisionhkhirani
This document discusses various methods of payment that can be used for mergers and acquisitions, including issuing equity shares, preference shares, secured debt instruments, or cash payments from the acquiring company. It also discusses sources of funding for these payments, such as internal accruals, IPOs, rights issues, private placements, bank loans, and overseas markets. The document provides examples of companies that have used different methods, such as Tata Motors issuing equity shares and taking a bridge loan to acquire Jaguar Land Rover.
Equity in Accounting: Meaning, Types, & Practical Examples | Academy Tax4wealth Academy Tax4wealth
The value of equity can be determined through the current share price or a valuation established by professionals or investors. Enroll now, and make your career.
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https://academy.tax4wealth.com/blog/what-is-equity-in-accounting
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The document discusses data analysis and the discussion of findings in research. It provides details on the differences between data analysis and discussion of findings. It explains that data analysis involves evaluating and analyzing collected data using logical reasoning to form findings or conclusions. It discusses important issues in data analysis like using sufficient datasets and samples and not delegating the analysis. It also discusses common components of qualitative data analysis such as data archiving, exploring cases, finding themes and categories. The discussion of findings section explains that this part involves interpreting results in relation to research questions and existing knowledge to demonstrate what is known, differences found, and how findings extend knowledge in the field.
This document provides an overview of a course on Elements of Logistics and Inventory Control presented by Mr. Raashid Yusuph at the Muslim University of Morogoro. The course covers topics such as introduction to logistics, managing logistics, logistics outsourcing, and inventory control. Assessment includes tests, assignments, and a final examination. The document also discusses key concepts in logistics including the supply chain, transportation modes, and the evolution of logistics integration.
Here are the key inventory levels calculated based on the information provided:
(a) Reorder level = Maximum usage x Maximum reorder period
A = 75 x 6 = 450 units
B = 75 x 4 = 300 units
(b) Minimum Level = Reorder level - (Average usage x Average reorder period)
A = 450 - (50 x 5) = 150 units
B = 300 - (50 x 3) = 100 units
(c) Maximum level = Reorder level + Reorder quantity - (Minimum usage x Minimum reorder period)
A = 450 + 300 - (25 x 4) = 750 units
B = 300 + 500 - (25 x 2) = 600 units
(d
The document provides information about transportation logbooks and logistics planning strategies. It discusses what information must be included in a transportation logbook such as date, miles driven, vehicle and carrier details. It also gives examples of completed logbook entries. Regarding logistics planning, it outlines key aspects like customer service levels, inventory management, transportation and location decisions. Common logistics strategies discussed are lean, agile, outsourcing and distribution approaches. Effective logistics requires proper planning, automation, training, efficient warehouse and transportation management, and continuous measurement and improvement.
This document provides an overview of financial markets and instruments. It defines a financial market as a place where securities are created and traded, facilitating buying and selling. Financial markets are classified by the nature of claims (debt, equity), maturity (money market, capital market), and how transactions occur (primary, secondary markets). Money market instruments discussed include treasury bills, certificates of deposit, commercial paper, and repurchase agreements. Capital market instruments include stocks, bonds issued by corporations, governments, and agencies. The document also discusses stock and bond indexes, and characteristics of different financial claims.
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Market failure occurs when the free market does not allocate resources efficiently. There are several types of market failures: externalities, where external costs and benefits are not reflected in prices; public goods, which are non-excludable and non-rivalrous and therefore underprovided by the market; imperfect information, where asymmetric information between buyers and sellers can lead to problems like adverse selection and moral hazard; and monopoly power, where a lack of competition results in a deadweight loss. These situations result in resources being over-allocated or under-allocated from a societal perspective.
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3. Learning Outcomes
• After studying this part of the model, you should be
able to:
– Apply security analysis and portfolio management
principles in managing financial investment.
– Apply fundamental and technical analysis skills in
evaluating financial portfolio.
24 March 2023
5. • Investment is the allocation of monetary
resources to assets that are expected to yield
some returns over a period of time.
– It involves the commitment of resources which
have been saved with the expectation that some
benefits will accrue in future.
• Investment actually refers to the current
commitment of present resources mainly
money, in the hope of gaining future
benefits.
24 March 2023
INVESTMENT
6. • Investment increases future consumption
possibilities:
– By foregoing consumption today and
investing the savings, investors expect to
increase their future consumption
possibilities by increasing their wealth
24 March 2023
Why Do We Invest?
The Right Savings Formula
A. Income – Expenses = Savings ×
B. Income – Savings = Expenses √
7. 24 March 2023
Why Do We Invest?
1. Retirement: By investing a portion of
your income you allow money to
grow and work for you when you
retire.
2. 3 parameters to assess suitability of
any investment avenue are –
i. Return potential
ii. Safety
iii.Liquidity
3. Various avenues where money can be
invested, are broadly classified into
‘Asset Class’. Equity and bonds are
the most popular class of assets.
9. 24 March 2023
Why Do We Invest?
Capital growth Diversification
Tax benefits Returns
To Achieve:
10. • If we have savings and we do not invest, we
can’t earn anything on our savings.
• Second, the purchasing power of cash
diminishes in inflation
– This means that if savers do not invest
their savings, they will not only lose
possible return on their savings, but will
also lose value of their money due to
inflation
24 March 2023
WHAT IF WE DO NOT INVEST
11. • You will need funds in retirement
– To pay for food, clothing, and any other
living expenses
24 March 2023
WHAT IF WE DO NOT INVEST
12. • Speculation can be described as investment
related with short-term investment horizons and
involves purchasing the salable securities with
the hope that its price will increase rapidly,
providing them with a quick profit.
• Speculators try to buy low and sell high, their
primary concern is with anticipating and
profiting from market fluctuations.
• Source of income is associated with the change
in market price
24 March 2023
SPECULATION
13. • The stock brokers may be cited as an example.
Some brokers buy shares with a view to make quick
profit by selling within few days, when the prices of
such shares shoot up.
• Speculation involves trading a financial
instrument involving high risk, in expectation of
significant returns. The motive is to take
maximum advantage from fluctuations in the
market.
• Without having enough knowledge about the market
movements, speculators expose themselves to higher risks.
24 March 2023
SPECULATION
14. • Example – Speculator who buys 50 shares of
a company for $3000. Now the price of the
same shares becomes $4000 due to price
fluctuation. The person sells the shares and
earns profits of $1000.
24 March 2023
SPECULATION
15. • Gambling is different from investment and
speculation.
• Gambling purely depends on the intuition or
instincts of the investor.
• The chance of winning that gamble is
particularly very less
• A gamble is a very short term investment in a
game of chance.
24 March 2023
GAMBLING
16. • Example – The example of gambling are horse
racing, card game, lottery etc. This is a gamble as
this investment is not backed by any information or
analysis and the chances of winning are unknown.
• After experiencing a gain or profit, people are
willing to take more risk. This is called as “house-
money” effect.
• After experiencing a financial loss, people become
less willing to take a risk. This effect is recognized
as “snakebite” effect
24 March 2023
GAMBLING
18. • Security – Is an asset with a financial value
• Investment can be made to intangible assets like
marketable securities or to real assets like gold,
real estate etc. More generally it refers to
investment in financial assets.
• Investment decision has two primary processes:
namely the analysis and management.
24 March 2023
SECURITY ANALYSIS
19. • Security analysis is an investment decision
process involving valuation and analysis of
individual securities.
• Security analysis refers to the method of
analyzing the value of securities like shares and
other instruments to assess the total value of
business which will be useful for investors to
make decisions.
• Two approaches for security analysis
Fundamental analysis
Technical analysis
Security Analysis
24 March 2023
20. • In accounting and finance, Fundamental analysis is
an evaluation procedure of securities where the
major goal is to estimate the intrinsic value of a
stock.
• It studies the fundamental factors that effects stocks
intrinsic value like profitability statement & position
statements of a company, managerial performance
and future outlook, present industrial conditions, and
the overall economy.
– Fundamental analysis uses internal and external
variables to anticipate price movements.
• Thus, fundamental analysis values the stock using
financial variables in order to determine company’s
Fundamental Analysis:
21. The ultimate goal of fundamental analysis is to
quantify the intrinsic value of a security.
The estimated security’s intrinsic value can then be
compared to its current market price to help with
investment decisions.
The current price of a stock may not reflect the
actual value of the stock.
The stock may be overvalued or undervalued in the
market.
Fundamental analysis:
24 March 2023
22. Fundamental analysis helps investors to study the
health of the company, and thus leading to the actual
value of the stock.
The main purpose of this method is to identify
companies that that are fundamentally strong in
order to invest in them for the long term.
It is not enough just to find a successful business, it
is necessary to find companies that worth more than
other investors estimate.
Fundament Analysis:
24 March 2023
23. • Fundamental analysis consists of three main
parts namely:
1. Economic analysis - fundamental analysis might
focus on economic data to assess the present
and future growth of the economy.
2. Industry analysis – examination of supply and
demand forces for the products offered
3. Company analysis- involves the examination of
financial data, management, business concept
and competition.
Components of Fundament Analysis:
24 March 2023
24. • This analysis helps to evaluate investment opportunities
such as when to buy and sell securities.
• Using fundamental variables, an intrinsic value of a firm
(Vo) can be estimated and compared with the prevailing
market prices (Po) to aid in investment decisions
• An intrinsic value - the most common approach for
valuation of common stocks using fundamental analysis
– In this method, an investor or analyst studies
the future prospects for a company and
estimates the likely dividends to be paid (the
only payments an investor receives directly
from a firm).
• The goal of fundamental analysis is to derive a
Fundament analysis at Company
Level
24 March 2023
25. • The intrinsic value (IV) is the “true” value, it tells
what a stock will do in the future.
• The market value (MV) is the consensus value of
all market participants
If Vo > Po, purchase because the stock is
undervalued
If Vo < Po, sell because the stock is overvalued
If Vo = Po, the stock is correctly priced
Fundamental Analysis at Company
Level …
Intrinsic Value and Market Price
24 March 2023
26. • V0 = Intrinsic value; Dt= Dividend at time t; k =
required rate of return
• The DDM says the stock price should equal the
present value of all expected future dividends into
perpetuity.
Fundamental Analysis at Company
Level …
Dividend Discount Models (DDM)
24 March 2023
...
1
1
1 3
3
2
2
1
0
k
D
k
D
k
D
V
27. • g = dividend growth rate which is constant in
perpetuity
• A stock just paid an annual dividend of $3/share.
The dividend is expected to grow at 8% indefinitely,
and the market capitalization rate (from CAPM) is
14%.
Fundamental Analysis at Company
Level …
Constant Growth DDM
24 March 2023
g
k
D
g
k
g
D
V
1
0
0
1
54
$
08
.
0
14
.
0
24
.
3
$
1
0
g
k
D
V
28. • Growth rate (g) of dividends can be
estimated using the formula
• Where:
g = growth rate in dividends
ROE = Return on Equity for the firm
b = plowback or retention ratio
(1- dividend payout ratio)
Fundamental Analysis at Company
Level …
Growth rate of dividends
24 March 2023
b
ROE
g x
29. Fundamental Analysis at Company
Level …
Growth rate of dividends
24 March 2023
• Consider the expected dividends for Honda:
2010 $.50 2012 $ .83
2011 $.66 2013 $1.00
• Since the dividend payout ratio is 30% and ROE is
11%, the “steady-state” growth rate is 7.7%.
• Honda’s beta is 0.95 and the risk-free rate is 3.5%. If
the market risk premium is 8%, then k is:
• k=3.5% + 0.95(8%) = 11.1%
30. Fundamental Analysis at Company
Level …
Growth rate of dividends
24 March 2023
• Therefore:
• Finally,
• In 2009, one share of Honda Motor Company Stock
68
.
31
$
077
.
0
111
.
0
077
.
1
1
$
1
2013
2014
2013
g
k
g
D
g
k
D
P
04
.
23
$
111
.
1
68
.
31
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111
.
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83
.
0
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111
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0
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111
.
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50
.
0
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4
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2009
V
31. INTEGRAL PART OF FUNDAMENTAL
ANALYSIS
• it helps the analyst understand a firm’s current
condition
• where it is headed
• what factors affect it
• how the factors affect it
includes a study of the three major
statements:
• the balance sheet
• the income statement
• the statement of cash flows
Financial analysis:
24 March 2023
32. • Balance sheet:
o Shows the financial position of the firm at a
particular point in time. Is a summary of a firm’s
financial position on a given date that shows total
assets = total liabilities + owners’ equity.
• The income statement: Indicates company's ability
in generating profit/loss for a period under
consideration
• Cash flow statement: Showing the firm's cash
movement for a certain period
Financial Statement categories
24 March 2023
33. • Ratio analysis is a method that can be used to
assess a company’s performance over a period
of time or to compare the performance of two
companies.
• In comparing the performance of two companies
you must consider the nature of each
company’s business because the ratios of a
supermarket will be significantly different from
those of an engineering company.
Ratio analysis
24 March 2023
34. • A ratio on its own is meaningless unless:
o Interpretation is made
o It is compared with other ratios in the same
set of financial statements
o It is compared with the same ratio in previous
financial statements ( trend analysis)
o It is compared with a standard of
performance. The standard measure may be
an industry average or a target set by the
management.
Importance of Ratios
24 March 2023
35. i. LIQUIDITY- measures the ability of the firm to
meet its due or maturing short term obligations
– some liquidity ratios:
ocurrent ratio
oquick ratio
ii. PROFITABILITY-These ratios measure the
performance of firms in terms of profit
generation/productivity.
Types of Ratios:
24 March 2023
36. • Some profitability ratios
– Gross Margin
oGross profit / Sales
– Operating Margin
oOperating income / Sales
– ROA
oNet income / Total assets
– ROE
oNet income / Owner’s equity
Types of Ratios…
24 March 2023
37. iii. GEARING/ LEVERAGE RATIOS
• These ratios indicate the degree to which the
activities of a firm are supported by creditors'
funds as opposed to owners.
– some examples:
odebt to equity ratio
olong-term debt/total capital ratio
Types of Ratios…
24 March 2023
38. iv. ASSET UTILIZATION/ACTIVITY/EFFICIENCY
RATIOS
• They measure how efficient is a firm in utilizing
short-term assets to generate income.
• If a business does not use its assets effectively,
investors in the business would rather take their
money and place it somewhere else.
– Some ratios include:
o inventory or stock turnover
o average debtors collection period
o creditors’ payment period
o total asset turnover
Types of Ratios…
24 March 2023
39. v. MARKET/INVESTMENT RATIOS
• These are the ratios which indicate the
relationship of the firm's share price to dividends
and earnings.
• Market value ratios are indicators of what
investors think of the firm's past performance
and future prospects. They include; dividend
yields, P/E ratio, dividend cover, dividend pay
out ratio, Earnings yield and P/B ratio
Types of Ratios…
24 March 2023
40. Technical Analysis - Logic
24 March 2023
Supply and
demand
determine
prices
Changes in
supply and
demand
cause
changes in
prices
Prices can
be projected
with charts
and other
technical
tools
41. • Is a security analysis discipline for forecasting the
direction of prices through the study of past
market data, primarily price and volume.
• Technicians say that market's price reflects all
relevant information, so analysis looks at the
history of a security's trading pattern rather than
external drivers such as economic, fundamental
and news events.
• It involves plotting share prices on a chart and
interpreting the pattern.
• Technical analysts do not attempt to measure a
security's intrinsic value but instead use stock
charts to identify patterns and trends that may
Technical Analysis
24 March 2023
42. • Rules for when to buy and sell stocks are then
established on the basis of the patterns/trend that
emerge.
• Trends “are your friend” and sentiment changes
predate and predict trend changes.
Technical analysis…
24 March 2023
43. • Technical analysts believe that prices trend
directionally, i.e., up, down, or sideways (flat) or
some combination.
• Charts are essential component of the technical
analyst’s toolkit.
• Charts provide information about past price behavior
and provide a basis for inferring likely future price
behavior.
• A variety of charts can be useful in studying the
markets.
• The selection of the chart to use in technical analysis
is determined by the intended purpose of the
analysis.
24 March 2023
Technical Analysis – Charts
44. • Four main types of charts are available for investors
and traders to use depending on the information
they are seeking and their individual skill levels.
• These charts are:
- Line chart
- Bar Chart
- Candlestick Chart, and
- Point and Figure Chart
Technical analysis – Types of Charts
24 March 2023
45. l
• The basic and simplest form of the four charts
• Line charts represent only the closing prices over a
set period of time.
• The line is formed by connecting the closing prices
over the time frame.
24 March 2023
Line Charts …
48. • While this type of chart doesn’t provide
much insight into intraday price
movements, many investors consider the
closing price to be more important than the
open, high, or low price within a given
period.
• These charts also make it easier to spot
trends since there’s less ‘noise’ happening
compared to other chart types.
24 March 2023
Line Charts (Summary)
49. Bar Charts
• Consists of bars which are vertical line and
Horizontal dash
– The vertical lines
• consists of Low Price (L) at the bottom and
the high price (H) at the top
– The Horizontal dash
• Consists of Open price (O) on the left side
and Close price (C) on the right side for the
time frame
24 March 2023
50. Bar Charts
• The chart is made up of a series of vertical lines
that represent each data point. This vertical line
represents the high and low for the trading
period, along with the closing price. The close
and open are represented on the vertical line by
a horizontal dash.
• The opening price on a bar chart is illustrated by
the dash that is located on the left side of the
vertical bar. Conversely, the close price is
represented by the dash on the right. Generally,
if the left dash (open) is lower than the right dash
(close) then the bar will be shaded green/black,
representing an up period for the stock, which
24 March 2023
51. Bar Charts
• A bar that is colored red signals that the stock
has gone down in value over that period. When
this is the case, the dash on the right (close) is
lower than the dash on the left (open).
24 March 2023
52. Bar Charts
• Consists of bars which are vertical line and
Horizontal dash. Three possible bars are
expected:
24 March 2023
Low
High
Low
High
Open
Close
Open = Closing Open < Closing
►Good for a day
Open > Closing
►Bad for a day
Open
Close
Open Close
High
Low
55. Bar
• Consider the following data for your
analysis and draw a bar chart
24 March 2023
Bar Charts ...
Date Open High Low Close
22 march, 2016 196.8 198.25 194.5 197.5
23 march, 2016 196.9 197.6 195.3 196.6
24 march, 2016 196.6 196.6 196.6 196.6
25 march, 2016 196.6 196.6 196.6 196.6
28 march, 2016 195.8 198.25 187.65 188.3
29 march, 2016 188.5 191.25 186.65 189.5
30 march, 2016 192.25 198.3 190.5 197.55
31 march, 2016 197.85 198.75 192.35 194.25
1 April, 2016 193.7 197.25 192 195.65
56. • The opening price is the horizontal dash
on the left side of the horizontal line and
the closing price is located on the right
side of the line.
• If the opening price is lower than the
closing price, the line is often shaded
black or green to represent a rising period.
• The opposite is true for a falling period,
which is represented by a red shade.
24 March 2023
Bar Charts (Summary)
57. • Candlestick charts are thought to have been
developed in the 18th century by Japanese
rice trader of financial instruments.
• Candlestick charts are an effective way of
visualizing price movements.
• When the close is higher than the open
(usually green or white) is called the Bullish
Candle.
• When the close is lower than the open
(usually red or black) is called Bearish
Candle.
24 March 2023
Candlestick Charts
60. • Falling periods will typically have a red or
black candlestick body
• Rising periods will have a white or clear
candlestick body.
• Days where the open and closing prices
are the same will not have any wide body
or rectangle at all.
24 March 2023
Candlestick Charts (Summary)
61. Point and figure chart
• Is a charting technique used in technical
analysis, used to attempt to predict financial
market prices.
• Point and figure charting is unique in that it does
not plot price against time as all other
techniques do.
• Instead it plots price against changes in direction
by plotting a column of X’s as the price rises and
a column of O’s as the price falls.
24 March 2023
63. • Benjamin Graham and David Dodd (2008), Security
Analysis, 6th Edition, The McGraw-Hill Companies,
Inc.
• Frank K. Reilly and Keith C. Brown (2012),
Investment Analysis & Portfolio Management, 10th
edition, South-Western, Cengage Learning.
• Jeffrey C. Hooke (2010), Security Analysis and
Business Valuation on Wall Street, A
Comprehensive Guide to Today's Valuation
Methods, 2nd edition, John Wiley & Sons, Inc.,
Hoboken, New Jersey.
• Bodie, Kane and Marcus (2012), Essentials of
Investments, 9th Edition, Mc Graw Hill.
REFERENCES
24 March 2023