Management Notes

Management Notes

Reference Notes for Management

Finance

Finance

Capital Market – Concept, Importance, Types, Securities Traded, Participants, Regulations, Risks & MCQs | Financial Markets

by
Capital Market

Definition of Capital Market

Investing in and selling long-term financial instruments, such as stocks, bonds, and other securities, takes place on the capital market. Through it, investors, businesses, and governments can exchange capital, raising funds for a variety of purposes, such as expansion, project investment, and debt refinancing.

The capital market essentially serves as a platform for investors to earn returns on their investments, while issuers can obtain the necessary capital to fund their ventures and operations.

Money markets deal with short-term debt instruments and provide liquidity to the financial system, while the capital markets deal with longer-term securities, typically over one year in maturity.

Read more

Scope of Financial Management – 8 Major Scope Explained in Detail | Financial Management

by
Scope of Financial Management

Scope of Financial Management

Financial management is a vital component of success and sustainability for organizations across industries because it encompasses a broad range of activities and responsibilities designed to manage an organization’s financial resources efficiently.

A wide variety of functions and decisions fall under the umbrella of financial management, including financial planning and capital budgeting, working capital management, risk mitigation, and financial analysis.

Financial management involves strategic planning, operational execution, and monitoring of financial activities in order to ensure that the organization is financially stable, profitable, and growing over the long run.

Financial management describes the range of activities and responsibilities involved in managing the financial resources of an organization effectively. In addition to maximizing the value of the company, financial management ensures financial stability and sustainability by combining various functions, decisions, and strategies.

Let’s take a closer look at the scope of financial management:

Scope of financial management

Financial Planning:

The goal of financial planning is to develop a roadmap for a company’s financial activities. It begins with identifying short-term and long-term financial goals and objectives. It may be necessary to increase profitability, expand operations, invest in research, or enter new markets to achieve these objectives.

It is also important to estimate the financial requirements to achieve these goals, taking into account factors such as operating expenses, capital expenditures, and working capital requirements. Financial managers develop strategies to allocate resources effectively, prioritize investments, and ensure the organization’s financial stability and sustainability based on these estimates.

Read more

Transaction Risk Management – 10 Major Key Components Explained | Finance

by
key components of transaction risk management

Transaction Risk Management

In transaction risk management, risks associated with financial transactions are identified, assessed, and mitigated by individuals, businesses, or organizations. As part of this process, potential risks are analyzed and strategies are implemented to minimize or eliminate them during a transaction.

A smooth and secure execution of financial transactions depends on transaction risk management to protect the interests of all parties involved.

There are several elements involved in a transaction, including the exchange of goods, services, and financial instruments, the transfer of monetary funds, contract agreements, and interactions between parties. There are inherent risks involved in these transactions that can affect their success and outcome.

Among the risks are fraud, errors, non-compliance with regulations, operational failures, technological failures, and market fluctuations.

It is important to identify and understand the potential risks associated with a particular transaction in order to effectively manage transaction risk. An analysis of the transaction process, systems, and parties involved, as well as any external factors that may impact the transaction, can help accomplish this.

The following are the key components of transaction risk management:

key components of transaction risk management

  • Identification of potential risks:

Identification of potential risks associated with a transaction is the first step in managing transaction risks. In addition to identifying internal and external factors that could impact a transaction, this includes fraud, errors, noncompliance with regulations, operational failures, technological failures, and market fluctuations.

To identify risks, we must examine the transaction process, the systems, and the parties involved in detail.

Read more

Why is personal finance dependent upon your behavior?

by
Why is personal finance dependent upon your behavior?

Why is personal finance dependent upon your behavior? The management of one’s financial resources, including income, expenses, savings, and investments, is known as personal finance. Although personal finance may appear to be based solely on numbers and math, it is actually heavily dependent on one’s behavior. Personal finance is more about behavior than it is … Read more

Subletting vs Subleasing – 8 Major Differences between Subletting and Subleasing | Finance

by
Subletting vs Subleasing

Subletting vs Subleasing

Subletting

Whenever you sublet a property, you are responsible for paying any rent due to the landlord even if a third party is renting it back to you. Here are some things to consider:

Legal Considerations: If you are interested in subletting, it is important to review your rental agreement or lease to determine whether it is permitted. There could be legal consequences, including eviction, if subletting is not permitted.

Written Agreement: Submitting a written agreement with the sublet outlines all the terms and conditions of the agreement, including the rent amount, security deposit, move-in and move-out dates, and any other pertinent information.

Rent Responsibility: In the event that your subletter defaults on their rent payment, you are still responsible for paying rent to the landlord as the original tenant. It is essential to have clear communication with the subletter about payment terms and make sure that they are reliable tenants.

Condition of the Property: If a maintenance issue arises during the subletter’s stay, you have to ensure that the property is in good condition before they move in. Before a subletter moves into the property, it’s important to conduct a thorough inspection and document any existing damage.

Liability: During the subtenant’s stay, you are also responsible for any damage or injuries which may happen. It’s important to carry proper insurance coverage to protect yourself.

Duration of Subletting: It is important to clearly state the duration of subletting in the written contract. Before entering into a subletting agreement, be sure to review the original rental agreement or lease as the landlord may require a new lease or rental agreement from the subletter.

Communication: To ensure that all parties are informed of their responsibilities and dealing with any issues that may arise, keep open communication with the landlord and the subletter during the subletting process.

Read more

MM Irrelevance proposition – Modigliani and Miller Approach | Capital Structure Theories

by
MM Irrelevance proposition

MM Irrelevance proposition

The relationship between leverage and the cost of debt capital was discussed for the first time by Franco Modigliani and Merton Miller in 1958. In the absence of taxes, Modigliani and Miller (MM) argue that a firm’s market value and the cost of capital remain unchanged. Based on MM’s analysis, a firm’s market value is determined by capitalizing its expected return at an appropriate capitalization rate regardless of its capital structure.

Read more

Remittance in Nepal – 4 Types of Remittance | Management Notes

by
Types of Remittance

Remittance in Nepal

Concept of Remittance 

The remittance is related with the foreign currency. In order to facilitate the transfer of funds between countries, banking companies provide this service. As Nepalese youth travel to foreign countries in search of jobs, the remittance services provided by banks provide a safe and legal way for them to send their earnings home. Banks are also transferring funds from Nepal to other countries as part of this business. Inward remittances and Outward remittances are two sides of the business; the inward remittance means receiving funds from abroad and the outward remittance means sending money abroad. Banks use different methods for these types of fund transfers.

Read more

Roles of RBB in Economic and Banking Development of Nepal – Rastriya Banijya Bank (RBB) | Management Notes

by
Roles of RBB in Economic and Banking Development of Nepal

Roles of RBB in Economic and Banking Development of Nepal

Modern economies require a developed banking system to develop economically. The banking system needs structural and functional reforms to enable the bank to perform its developmental role in underdeveloped countries. Banks play a crucial role in a country’s development. Today’s economic progress depends greatly on the development of sound banking systems in developing economies.

The following are ways in which commercial banks can contribute to a country’s economic development.

Read more

Banking Products – Different Types of Banking Products in Nepal | Management Notes

by
Banking Products

Banking Products

Traditionally, Nepalese banks offered mass banking products. Deposit products most commonly used were Savings Bank Accounts, Current Accounts, and Term Deposit Accounts. The only leading products were cash credit and term loans. Banks, according to the Central Bank of Nepal guidelines, have little to do other than accept deposits at prices fixed by the Central Bank of Nepal and lend money at rates determined by the Central Bank of Nepal. Lending products were benchmarked by the Pine Lending Rate (PLR). However, PLR was largely determined by Nepal’s Central Bank. Additionally, demand drafts, telegraphic transfers, bankers checks, and internal transfer of funds were the only remittance products available.

Read more