Tag Archives | Firm

Working Capital Estimation of a Firm: 4 Methods | Financial Management

There are four methods for estimating the working capital requirements of a firm. The methods are: 1. Percentage of Sales Method 2. Regression Analysis Method 3. Operating Cycle Method 4. Individual Components Method. 1. Percentage of Sales Method: It is a traditional and simple method of determining the level of working capital and its components. In this method, working capital [...]

By |2017-10-09T08:51:44+05:30October 9, 2017|Estimation|Comments Off on Working Capital Estimation of a Firm: 4 Methods | Financial Management

Shareholder Value Analysis (SVA) | Firm | Financial Management

SVA is an approach to Financial management developed in 1980s, which focuses on the creation of economic value for shareholders, as measured by share price performance and flow of funds. SVA is used as a way of linking management strategy and decisions to the creation of value for shareholders. The investment, business and financial decisions, both strategic and operational, are [...]

By |2017-10-09T08:51:44+05:30October 9, 2017|Shareholders|Comments Off on Shareholder Value Analysis (SVA) | Firm | Financial Management

Capital Structure of a Firm: 7 Main Approaches | Financial Management

The following points highlight the seven main approaches to the capital structure of a firm. The approaches are: 1. Net Income Approach 2. Net Operating Income Approach 3. WACC Approach (Traditional View) 4. Modigliani and Miller Approach (Modern View) 5. Debt-Equity Ratio Approach 6. EBIT-EPS Approach 7. Financial and NEDC Risks Trade-Off Approach. 1. Net Income Approach: This approach is [...]

By |2017-10-09T08:51:43+05:30October 9, 2017|Capital Structure|Comments Off on Capital Structure of a Firm: 7 Main Approaches | Financial Management
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