What is Cash Budget Explanation, Definition and Meaning

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One of the principal methods of forecasting the financial needs of a business is the cash budget, which predicts the combined effects of planned operations on the firm’s cash flow. A positive net cash flow means that the firm will have surplus funds to invest. But if the cash budget indicates that an increase in…

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What is Budgeting, Budgets Explanation, Definition and Meaning

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Once a firm’s general goals for the planning period have been established, the next step is to set up a detailed plan of operation—the budget. A complete budget system encompasses all aspects of the firm’s operations over the planning period. It may even allow for changes in plans as required by factors outside the firm’s…

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What is Capital in Finance Explanation, Definition and Meaning

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In economics, a stock of resources that may be employed in the production of goods and services. In classical economics it is one of the three factors of production, the others being labour and land. Capital may be so broadly defined as to include all possible material, nonmaterial, and human inputs into a productive system,…

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What is Inventory in Accounting Explanation,Definition and Meaning

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In business, any item of property held in stock by a firm, including finished goods held for sale, goods in the process of production, raw materials, and goods that will be consumed in the process of producing goods to be sold. Inventories appear on a company’s balance sheet as an asset. Inventory turnover, which indicates…

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What is Bond in Finance Explanation, Definition and Meaning

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In finance, a loan contract issued by local, state, or national governments and by private corporations specifying an obligation to return borrowed funds. The borrower promises to pay interest on the debt when due (usually semiannually) at a stipulated percentage of the face value and to redeem the face value of the bond at maturity…

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What is Reorganization,Reorganization Explanation,Definition and Meaning

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When a firm cannot operate profitably, the owners may seek to reorganize it. The first question to be answered is whether the firm might not be better off by ceasing to do business. If the decision is made that the firm is to survive, it must be put through the process of reorganization. Legal procedures…

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What is Mergers, Mergers Explanation,Definition and Meaning

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Companies often grow by combining with other companies. One company may purchase all or part of another; two companies may merge by exchanging shares; or a wholly new company may be formed through consolidation of the old companies. From the financial manager’s viewpoint, this kind of expansion is like any other investment decision; the acquisition…

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What is Antitrust Law, Antitrust Law Explanation,Definition and Meaning

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Any law restricting business practices considered unfair or monopolistic. The United States has the longest standing policy of maintaining competition among business enterprises through a variety of laws. The best known is the Sherman Antitrust Act of 1890, which declared illegal “every contract, combination . . . or conspiracy in restraint of trade or commerce.”…

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