Capital is the amount invested by owner in the business. Capital is in different forms such as assets, cash and intangible assets. Capital is also described as real capital and economic capital.

Venture Capital Funding

Venture capital funding is a kind of financing in small and medium enterprises where investors invest their money in the venture having a chance of potential growth and seeks equity stakes in the business. This can also be referred to seed funding and the

Profitability Index (PI)

Profitability index is a ratio that identify and compares the relationship between the total costs involved in the project and the profit returned from that project. The ratio of profitability index can be shown in the form of formula as under:- Profitability Index Formula

Simple Rate of Return Method

Simple Rate of Return Method: Learning Objectives: Compute the simple rate of return for an investment project. Definition and Explanation: The simple rate of return method is another capital budgeting technique that does not involve discounted cash flows. The method is also known as

Screening Decisions and Preference Decisions

Screening Decisions and Preference Decisions: Learning Objectives: Define, explain and give examples of screening and preference decisions. Capital budgeting decisions fall into two broad categories: Screening decisions. Preference decisions. Screening Decisions – Definition and Explanation: Screening decisions relate to whether a proposed project meets

Budgeting and Planning

After studying Budgeting and Planning article you should be able to: Understand why organizations budget and the processes they use to create budgets. Prepare a sales budget, including a schedule of expected cash receipts. Prepare a production budget. Prepare a direct materials budget, including

Cash Budget | Cash Budgeting

Cash Budget | Cash Budgeting: Learning Objectives: Define and explain a cash budget. What is the purpose of a cash budget How to prepare a cash budget. Definition and Explanation: Cash budget is a detailed plan showing how cash resources will be acquired and

Capital Gearing Ratio

Capital Gearing Ratio: Definition and Explanation: Closely related to solvency ratio is the capital gearing ratio. Capital gearing ratio is mainly used to analyze the capital structure of a company. The term capital structure refers to the relationship between the various long-term form of
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