A cheque is a negotiable financial instrument we use to settle payments. A cheque can be lost, stolen or the signature of payee can be done by someone else pretending him/her and that’s why the protection of cheques has increased according to an international standard that we must thoroughly consider when writing a cheque. Crossing is a popular method of protecting the payer and payee of a cheque. Both bearer and order cheques can be [...]

Capital Gearing Ratio Capital gearing ratio is using to analyze the capital structure of a company. Formula:                                                                                                                                                                                                                     Capital Gearing Ratio = Equity Share Capital / Fixed Interest Bearing Funds Dividend cover This measures how many times a company can pay dividends over the profit. Ex: if dividend cover is 5, that means the company’s profit attributable to shareholders was 5 times the amount what the dividend cover exactly is. Formula: Dividend cover = Earnings per [...]

Basic objectives Financial reporting should be rich with information that is Useful to provide information to potential investors and creditors and other financial market users in making rational investment, credit, and other financial decisions. Helpful to assess the amounts, timing, and uncertainty of prospective cash receipts. Key to make financial decisions. About economic resources, the claims and the changes in those resources. Improving the performance of the business Provide information to make long-term decisions. Useful [...]

Both Futures and Forwards Contracts are agreements to trade or do a deal on a set future date, but there are some significant differences. Futures are highly standardized and should follow the standards, while each and every Forward contract is personalized and unique between the parties interact with the trade or deal. Futures are settled at the end with the details final price; whereas etc on the last trading date of the contract while the [...]

Forex arbitraging is defined as making a grain or profit by buying and selling of currencies which are priced wrong. The market in which trader buys the forex has a lower quote and the market in which the currency is sold has a higher quote for the same currency which allows the trader to make profits out of that transaction. As an example, if a person buys US Dollars for Great Britain Pounds and sells [...]