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Asset Management
Definition Asset management which also is called as investment management has many similarities to finance management but investment management is more specific and narrow area of finance. Invest
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Investment Manager
Investment management or finance management are particularly a lot of attention and responsibility requiring areas. It does not matter whether you manage your money whether corporate funds, in any case, it is important t
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Investment Industry
An investment industry is a part of whole financial industry of the world. Finance sector includes not only investment industry but also other financial services: corporate finance, public finance, insurance
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Shareholder
A shareholder (stockholder) is a individual or company that owns some shares of stock in a corporation. Technically, every investor who is investing in shares is a shareholder for as long as he holds those s
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Stockholder Wealth Maximization
Stockholder wealth maximization is a main goal for firm’s managers in corporate finance. Stockholder wealth maximization is above the profit maximization because of long term orientation and better risk man
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Greenshoe
A greenshoe is an option to sell or buy shares during initial public offering IPO. This option is agreed between the company that goes public and the IPO organizer (some corporate finance firm). The
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Investment Bank
An investment bank is a financial institution that has a license of bank and specializes exclusively on investment services. In the USA investment banking services was separated from other banking activity u
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Investment Banking Services
Investment banking services are corporate finance services provided by investment banks. Investment banking includes such services like capital rising, securities issuing, IPO’s running, mergers and acquisitions
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corporate finance
corporate finance is a niche of finance that deals with financial questions related to corporations. The main goal of every company should be stockholders wealth maximization, but to achieve that m
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Financial Leverage
A financial leverage is a use of borrowed money to achieve more efficient capital structure. A borrowed capital is cheaper than equity capital most of the times. So usage of loaned money makes weighted average ca
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Corporate Investment
A corporate investment is investment made by one corporation into another. All corporations try to keep the growth of the business. Some do it only organically, while others also proceeds mergers & acquisitio
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Working Capital
Working capital can be calculated from balance sheet data. There are few ways to calculate working capital, but the most accurate is this one (for operating working capital): Working capital = total curr
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Relative Valuation
Comparative analysis Relative valuation is stock valuation method that gained its popularity because of simplicity and practical importance. The key principle of relative valuation is about valuation multi
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Discounted Cash Flow
Discounted cash flow (DCF) is forecasted net cash flow of the company or other asset that is recalculated (discounted) to its current value. Discounted cash flow is important for investment assessing and mostly i
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Warrants
Warrants are derivative securities that give the right to acquire shares of the issuer at the predetermined price and time. From the holders position there is no difference between warrant and call option. The ma
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ROE
ROE (Return on Equity) shows profitability of company’s book value. Company’s book value (equity) is equal to company’s assets less liabilities, and ROE is usually higher if company ha
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M&A
M&A (mergers & acquisitions) is a field of corporate finance in which corporations are acquiring other companies or are merging in between. Theoretically it doesn’t sound very impressive, but in rea
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Finance Advisor
A finance advisor is a job title for a person who provides financial consultations for the clients. Financial advisor also includes functions of an investment advisor but may include more financial advisory funct
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Income
The term income may have several meanings. In corporate finance it basically means profit or earnings that are equal to revenue less expenses. But in some cases income may also indicate company’s revenue bu
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Financial Analysis
Financial analysis is an important part of investing, especially if investor wants better results from his investments. Of course it is possible to ignore financial analysis and make investment decisions based on
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Debt Coverage Ratio
Debt coverage ratio (debt service coverage ratio) is a ratio that measures solvency risk and mostly is applied for property projects. There are many debt coverage ratios that are used in financial practice on thi
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Financial Planning
Financial planning is a type of financial analysis of which goal is to predict financial situation of the object in the future. There are two main trends where financial planning can be applied: in corporate fina
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Total Debt Ratio
Total debt ratio compares total liabilities to total assets. The higher ratio represents riskier situation. And if this ratio is equal to 1.0, it would mean that liabilities are equal to assets or in other words
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Gross Debt
(1) Gross debt in corporate finance is often used as synonym for ‘total debt’, however there might be some differences depending on the version of the total debt. Technically, ‘gross debt’
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Leverage
Leverage definition In finance leverage means usage of debt capital in addition to the equity capital in order to increase the profit. Increase in leverage is understood as increase in riskiness and volatility.
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