FINANCIERO SOUL

  Strategic choice is the mental process of selecting the best or most appropriate strategy from the stock of alternatives that serves the enterprise objectives. This choice takes place in not thin air but a frame work of reference made up of variety of elements and the choice made is the product of the basic elements that work in the frame work. Strategic choice therefore is selection of the best strategic option that helps achieve organization's objectives.Relevant strategic options are evaluated their suitability,acceptability and feasibility.The evaluated strategic options are ranked in order of their potential to achieve objective.Such options should allow businesses to maintain or create sustainable strategic advantage.The strategic choice is made from among the ranked alternative. 'Strategic choice’ involves selecting from among several alternatives the most appropriate strategy which will best serve the enterprise objectives. To choose a good strategic optio

Liquidity Risk What is Liquidity Risk? Liquidity refers to the ease with which an asset (equity shares, debentures, etc.) can be traded in the stock market in exchange for currency. Consequently, liquidity risk depicts the risks associated with such trades, as the successful conversion of stock into money depends on various parameters such as book value of a company, bid-ask spreads for shares in the market, etc. Typically, high liquidity risk indicates that particular security cannot be readily bought or sold in the share market. This is because an issuing company might face challenges in meeting its current liabilities due to reduced cash flow. Small and mid-scale companies (having a market cap below Rs. 5,000 crore and Rs. 20,000 crores respectively) are categorised as organisations having high liquidity risk. Such high risks arise from the volatility of these companies, as they are heavily dependent on equity cash flows for a generation of revenue. Trading liquidity risk is also hi

  Financial management is the activity concerned with planning, raising, controlling and administering of funds used in the business.” – Guthman and Dougal Financial management is the operational activity of a business that is responsible for obtaining and effectively utilizing the funds necessary for efficient operations.”- Massie  Financial management is an organic function of any business. Any organization needs finances to obtain physical resources, carry out the production activities and other business operations, pay compensation to the suppliers, etc. There are many theories around financial management: Some experts believe that financial management is all about providing funds needed by a business on terms that are most favorable, keeping its objectives in mind. Therefore, this approach concerns primarily with the procurement of funds which may include instruments, institutions, and practices to raise funds. It also takes care of the legal and accounting relationship between an

 The concept of elasticity of demand plays a crucial role in the pricing decisions of the business firms and the Government when it regulates prices. The concept of price elasticity is also important in judging the effect of devaluation or depreciation of a currency on its export earnings. It has also a great use in fiscal policy because the Finance Minister has to keep in view the price elasticity of demand when it considers to impose taxes on various commodities. We shall explain below the various uses, applications and importance of the elasticity of demand. The business firms take into account the price elasticity of demand when they take decisions regarding pricing of the goods. This is because change in the price of a product will bring about a change in the quantity demanded depending upon the coeffi­cient of price elasticity. This change in quantity demanded as a result of, say a rise in price by a firm, will affect the total consumer’s expenditure and will therefore, affect th

 Is U.S Economy going to crash? The stock market or GDP projection or consumers spending indicates that US economy will go through a stagnation or say it is currently ongoing. While the wall street is projecting it's victory, the U.S economy is still going down. When there is early moving in market to upwards there is also a downfall coming soon . Fast-forward to today and the sun is still shining on the US economy. Unemployment is below 4%, inflation is sliding, consumers are still spending, and the S&P 500 rallied as much as 20% this year before cooling off recently. And the GDP is projected to grow by 1.6% in this third quarter. If we see the market S&P is up 8% in last six months, NASDAQ is up 14% and DOW JONES around 3%. But the thing we are missing is these projections are too soon to claim the victory because the fast moving in these figures to upwards may lead to a tragic downfall also. May be a Looming market crash. According to some investors like Michael Burry wh