Business Finance concepts
CONTENT PAGE Page i) FINANCE TERMS AND CONCEPTS 1 - 4 ii) REFLECTION 5 iii) ANNEXURE “Annexure 1” Title of Article: “China to check on banks more closely” Name of Publisher: The Straits Times Interactive (http://straitstimes. ... sg) Date of Publication: 23rd Febuary 2004 Author: Bloomberg News, AFP “Annexure 2” Title of Article: “Cash Forecasting Gets Short Shrift” Name of Publisher: Business Finance Magazine (http://www. ... com) Date of Publication: October 2003 issue of Business Finance Magazine Author: Ms Laurie Brannen “Annexure 3” Title of Article: “Hoarding Liquidity” Name Of Publisher: Business Finance Magazine (http://www. ... com) Date of Publication: February 2003 issue of Business Finance Magazine Author: Richard H. Gamble i) Finance Terms and Concepts Banks are critical to our economy and are defined as institutions, which deal in money and its substitutes while providing other financial services. ... Most investors more often than not opt to invest in relatively low-risk projects, and thus implement a variety of ways to measure the risk of business loans or investments. ... I will elaborate on these principal considerations as follow: a) Cash Flow Investors are primarily concerned with whether or not the business will generate sufficient cash flow to service the loan under consideration. ... Being a better metric of an organization’s financial health than its net income, records can show positive net profits and yet the business is still not be able to pay off its debts because in reality, the cash flow is used to service the loans. Using the cash flow as a gauge may also shed light on the quality of a business’ earnings. ... b) Liquidity Liquidity of a business refers to ease at which a business’ financial assets can be converted to cash without making substantial shifts in price or value of its assets. It can be determined by dividing the business’ current assets by its current liabilities.