The Weighted Average Cost of Capital can also be defined as the cost of capital. That’s a rate – net of the weight of the equity and debt the company holds – that assesses how much it cost to that firm to get capital in the form of equity, debt or both. Why would you … Continue reading What Is Weighted Average Cost of Capital? WACC in a Nutshell
What Is the Capital Asset Pricing Model? CAPM Framework Explained
In finance, the capital asset pricing model (or CAPM) is a model or framework that helps theoretically assess the rate of return required for an asset to build a diversified portfolio able to give satisfactory returns. CAPM assumptions The CAPM or Capital Asset Pricing Model, although unrealistic, it is still the most used in financial analysis. … Continue reading What Is the Capital Asset Pricing Model? CAPM Framework Explained
What Is Financial Risk? Financial Risk Explained
The Oxford Dictionary defines risk as: “A situation involving exposure to danger” and it goes on “The possibility that something unpleasant or unwelcome will happen.” Thus we want to define what is dangerous and what is this unpleasant thing we want to avoid. A first obstacle stands in the way of determining risk. In fact, each of us seems to have a … Continue reading What Is Financial Risk? Financial Risk Explained
13 Financial Ratios Formulas To Analyse Any Business
These are financial ratios formulas you can use to analyze any business: current ratio absolute ratio quick ratio the accounts receivable turnover ratio the accounts payable turnover ratio inventory turnover ratio debt to assets ratio debt to equity ratio interest coverage ratio gross profit margin ratio operating profit margin ratio return on capital employed ratio … Continue reading 13 Financial Ratios Formulas To Analyse Any Business
The Future of Google: The Curse of Engineers Become Advertisers
September 1998, two young fellows, created an algorithm called PageRank. It changed the future of the internet. That’s a story we all know, and it was written by Brin and Page, founders of Google. There is another story that as a business person I like more than that. That’s the story of Google’s business model. In … Continue reading The Future of Google: The Curse of Engineers Become Advertisers
The Complete Beginner’s Guide to Financial Ratios – Part Two
In The Complete Beginner’s Guide to Financial Ratios – Part One we covered: Why Ratio Analysis? Financial Ratio Analysis and interpretation Key financial ratios Types of financial ratios What is liquidity? What are the main liquidity ratios? Current Ratio Quick Ratio (Acid or Liquid Test) Absolute Ratio What is profitability? What are the main profitability ratios? Gross … Continue reading The Complete Beginner’s Guide to Financial Ratios – Part Two