This is default featured slide 1 title
This is default featured slide 2 title
This is default featured slide 3 title
This is default featured slide 4 title
This is default featured slide 5 title

Differences Between Financial Accounting And Cost Accounting

The main differences between financial accounting and cost accounting are given as under.

1.Financial accounting provides information about the business in general way.Financial accounting tells about the profit and loss and financial position of the business.Cost accounting provides information to the management for proper planning,control and decision making.

2. Financial accounting classifies,records and analyses the transactions in subjective manner or according to the nature of expenses.Cost accounting records the expenditure in an objective manner or according to the purposes for which the cost are incurred.

3.Financial accounts are the accounts of the whole business.Cost accounting is only a part of financial accounts.

4. Financial accounts are relate to commercial transactions of the business.Cost accounts are related to transactions connected with the manufacture of goods and services.

5.Financial accounts disclose the net profit or loss of the business as a whole.Cost accounts disclose profit or loss of each product, job or service.

Dealing with Low Interest rates: Investing and Corporate Finance Lessons

A few months ago, I tagged along with my wife and daughter as they went on a tour of the Federal Reserve Building in downtown New York. While the highlight of the tour is that you get to see large stacks of US dollars in the basement of the building, I considered making myself persona non grata with my immediate family by asking the guide (a very nice Fed employee) about the location of the interest rate room. That, of course, is the room where Janet Yellen comes in every morning and sets interest rates. I am sure that you can visualize her pulling the levers that sets T.Bond rates, mortgage rates and corporate rates and the power that comes with that act. If that sounds over the top, that is the impression you are left with, not only from reading news stories about central banks, but also from opinion pieces from some economists and investment advisors. I know that investors, analysts and CFOs are all rendered off balance by low interest rates, but I will argue that the techniques that they use to compensate are more likely to get them in trouble than solve their problems.
The what: Interest rates are at historic lows across the globe
There is little to debate. Interest rates are lower than they have been in a generation and you can see it in this graph of the US 10-year treasury bond rate going back several decades:

US 10-year T.Bond rates at the end of each year
But it is not just the US dollar where low interest rates prevail, as illustrated by the German government 10-year Euro bond rate, the Japanese government 10-year Yen bond rate and the Swiss Government 10-year Swiss franc rate trend lines:

Ten-year Government Bond Rates: End of each period
In fact, on the Swiss Franc, the 10-year bond rates rates have not just dropped but have hit zero and kept going to -0.09%, leading to the almost unfathomable phenomenon of negative interest rates on long term borrowing. A world where savers have to pay banks to keep their savings and borrowers are paid money to borrow turns everything that we have learned in economics on its head and it is therefore no surprise that even seasoned investors and analysts are unsure of what to do next.
The why: Its not just central banks
Why are interest rates so low? I know that the conventional wisdom is that it is central bank policy that has driven them there, but is that true? To answer that question, I decided to do go back to basics.
The Fundamentals
While market interest rates are set by demand and supply, as they are in any other market, there are fundamentals that determine that rate. In particular, the interest rate on an investment with no default risk (a guaranteed or risk free investment) can be written as the sum of two components:
Interest rate on a guaranteed investment = Expected inflation + Expected real interest rate
This is the simplified version of the classic Fisher equation and it is true by construction. In fact, many analysts use it to decompose market interest rates; thus if the US treasury bond rate is at 2.00% and expected inflation is 1.25%, the real interest rate is backed out at 0.75%. In the long term, I would argue that a real interest rate has to be backed up by a real growth rate in the economy. After all, you cannot deliver a 2% real interest rate in an economy growing at only 1% a year in the long term, though you can get short term deviations between the two numbers. Thus, in the long term, the interest rate on a guaranteed investment can be rewritten as:
Interest rate on a guaranteed investment = Expected inflation + Expected real growth rate
How well does this simplistic equation hold up in practice? Testing it is hard, especially when you can observe only actual inflation and real growth but not expected inflation and real growth. However, we also know that expectations for inflation and real growth are driven, for better or worse, by recent history; thus expected inflation increases after periods of high inflation and decreases after periods of low inflation, thus making actual inflation and real growth reasonable proxies for expected values. The final number we need to test out this relationship is the interest rate on a guaranteed investment, and we use the US 10-year treasury bond rate as the stand in for that number, with the concession that the last 5 years have shaken investor faith in the guarantee.
Source: FRED (Federal Reserve in St. Louis)
Even if you take issue with my proxies for expected inflation (the actual inflation rate in the US each year, as measured by the CPI), real growth (the real growth rate in US GDP and the interest rate on a guaranteed investment, the graph sends a powerful message that risk free rates are driven by inflation and real growth expectations. If expected inflation is low and real growth is anemic, as has been the case since 2008, interest rates will be low as well and they would have been low, with or without central bank intervention.
The Central Bank Effect
Do central banks have influence over interest rates? Of course, but the mechanisms they use are surprisingly limited. In the United States, the only rate that the Fed sets is the Fed Funds rate, a rate at which banks can borrow or lend money overnight. Thus, if the Fed wants to raise (lower) interest rates, it has historically hiked (cut) the Fed Funds rate and hoped that bond markets (treasury and corporate) respond accordinly. One way to measure the effect of Fed action is to compute the difference between the actual US treasury bond rate each period and the “intrinsic” treasury bond rate (computed as the sum of inflation and real GDP growth that year):
Source: FRED
Note that the Fed Funds rate hit zero in 2009 and has stayed there for the last five years, effectively eliminating it as a tool for controlling rates. Perhaps driven by desperation and partly motivated by the savior complex, the Fed has turned to a relatively unused tool in its arsenal and bought large quantities of US treasury bond in the market for the last five years, the much-talked about Quantitative Easing (QE). While it is true that T.Bond rates have stayed below intrinsic interest rates over the last 5 years, the effect of QE (at least to my eyes) seems to modest.
As the economy comes back to life, all eyes have turned towards Janet Yellen and the Fed and Fed-watching has become the central focus for many investors. While that is understandable, it is worth remembering that in today’s economic environment, with low inflation and real growth, the removal of the Fed prop will not cause interest rates to pop to 5% or 6% . In fact, based upon the numbers in the most recent year, the intrinsic interest rate is 3.08% and if the central banking props disappear, that would be the number towards which US treasury bond rates move.

Given the evidence to the contrary, it is puzzling that investors continue to hold on to the belief that central banks set interest rates and can change them on whim, but I think that the delusion serves both sides (investors and central banks) well. Investors, whipsawed by market and economic forces that are uncontrollable, feel comfort in attributing the power to set interest rates to central banks. It also allows investors to attribute every phenomenon that they have trouble explaining to central banking machinations and interest rates that are either “too high” or “too low”. Quantitative Easing in all its forms has proved to be absolutely indispensable as a bogey man that you can blame for the failure of active investing, the rise and fall of gold, and bubbles of every type. Central banks, which are really more akin to the Wizard of Oz, in their powers, than Masters of the Universe, are glad to play along, since their power comes from the illusion that they have real power.

The Crisis Effect
There is another factor at play that may be more powerful than central banks, at least over short periods, and that is the perception of a crisis. Whatever the origins or form of the crisis, investors respond with fear, and flee to safety. That “flight to quality” often manifests itself in declining interest rates on bonds issued by governments that are perceived as “higher quality”, and may push those rates well below intrinsic levels. Looking at the chart where we outline the gap between the T.Bond rate and its intrinsic value, the quarter where we saw the US 10-year treasury bond rate drop the most, relative to its intrinsic value, was the last quarter of 2008, where the crisis in financial markets led to a rush into US treasuries. That translated into a precipitous drop in treasury rates across the board, with the 10-year rate dropping from 3.66% on September 12, 2008,  to 2.2% at the end of 2008, and the T. Bill rate declining from 1.62% to 0.02% over the same period.

Source: FRED- Constant Maturity Rates on 3-month and 10-year treasuries

One of the few constants over the last six years has been that we lurch from one crisis to another, with local problems quickly going global. While there are some who may argue that this is a passing phase, I believe that this is part and parcel of globalization, one of the negatives that need to get offset against its positives. As economies and markets become increasingly interconnected, I think that the recurring crisis mode will be a permanent feature of market. One consequence of that may be that market interest rates on government bonds will settle below their intrinsic values, a permanent “crisis discount”, with or without central banking intervention.

The Interest Rate Effect 
The level of interest rates matter for all of us, as investors, consumers and businesses. For investors, interest rates drive expected returns on investments of all types through a very simple process:
Expected Return (r) = Interest rate on a risk free investment + Risk Premium
That expected return then determines what we will be willing to pay for a risky asset, with lower expected returns translating into higher prices. For businesses, these expected return becomes hurdle rates (costs of equity and capital) that they use to decide not only whether and where they should invest their money but plays a role in how much they borrow and how much to return to stockholders (as dividends or buybacks).
If the risk free rate drops and you leave the risk premiums and cash flows unchanged, the effect on value is unambiguously positive, with value rising as risk free rates drop. Thus, if you have a business that has $100 million in expected cash flows next year, with a growth rate of 4% a year in perpetuity and an equity risk premium of 4%, changing the risk free rate from 6% down to 2% will have profound effects on value. It is this value effect that has led some to blame the Fed for creating a “stock market bubble” and analysts across the world to wonder whether they should be doing something to counter that effect, in their search for intrinsic value.
While the mathematics that show the link between value and interest rates is simple, it is misleading because it does not tell the whole story. As I argued in the last section, interest rate movements, up or down, almost never happen in a  vacuum. The same forces that cause significant shifts in interest rates affect other inputs into the valuation and those changes can reduce or even reverse the interest rate effect:
To illustrate, the 2008 crisis that caused the T.Bond rate to plummet in the last quarter of the year also caused equity risk premiums to surge from 4.37% on September 12, 2008 to 6.43% on December 31, 2008. In the figure below, I back out the expected return on stocks and the equity risk premium from the index level each day and the expected future cash flows for each month from September 2008 to April 2015. Note that the cost of equity for the median US company rose in the last quarter of 2008, even as risk free rates declined.
Source: Damodaran.com (Implied ERP)
The expected return on equities has stayed surprisingly stable (around 8%) for much of the last 5 years, nullifying the impact of lower interest rates and casting doubt on the “Fed Bubble” story. As the crisis has receded, investor concerns have shifted to real growth, as the developed market economies (US, Euro Zone and Japan) have been slow to recover and inflation has not only stayed tame but turned to deflation in the EU and Japan. Thus, looking just at lower interest rates and making judgments on value misses the big picture.
Reacting to Low Interest Rates
Given that low interest rates have shaken up the equation, what should we do to respond? Broadly speaking, there are four responses to low interest rates:
  1. Normalize: In valuation, it is common practice to replace unusual numbers (earnings, capital expenditures and working capital) with more normalized values. Some analysts extend that lesson to risk free rates, replacing today’s “too low” rates with more normalized values. While I understand the impulse, I think it is dangerous for three reasons. The first is that “normal” is a subjective judgment. I argue, only half in jest, that you can tell how long an analyst has been in markets by looking at what he or she views as a normal riskfree rate, since normal requires a time frame and the longer that time frame, the higher normal interest rates become. The second is that if you decide to normalize the risk free rate, you have no choice but to normalize all your other macro variables as well. Consequently, you have to replace today’s equity risk premium with the premium that fits best with your normalized risk free rate and do the same with growth rates. Put differently, if you want to act like it is 2007, 1997 or 1987, when estimating the risk free rate, your risk premiums and growth rates will have to be adjusted accordingly. The third is that unlike earnings, cash flows or other company-specific variables, where you are free to make your judgment calls, the risk free rate is what you can earn on your money today, if you don’t invest in risky assets. Consequently, if you do your valuation, using a normalized risk free rate of 4% (instead of the actual risk free rate of 2%), and decide that stocks are over valued, I wish you the very best of luck putting your money in that normalized treasury bond, since it exists only in your estimation.
  2. Go intrinsic: The second option, if you believe that the market interest rate on government bonds is being skewed by central banking action to abnormally low or high levels is to replace that rate with an intrinsic interest rate. If you buy into my estimates for inflation and real growth in the last section, that would translate into using a 3.08% “intrinsic” US treasury bond rate. To preserve consistency, you should continue to use the same inflation rate and real growth as your basis for forecasting earnings and cash flow growth in your company and going the distance, you should estimate an intrinsic ERP, perhaps tying it to fundamentals.
  3. Leave it alone: The third option is to leave the risk free rate at its current levels, notwithstanding concerns that you might have about it being too low or too high. To keep your valuation in balance, though, your other inputs have to be consistent with that risk free rate. That implies using forward-looking prices for risk (equity risk premiums and default spreads) that reflect the market today and economy-wide growth and inflation rates that are consistent with the current risk free rate. Thus, if you decide to use 0.21% as the risk free rate in Euros, the combination of inflation and real growth rates you have to assume in the Euro economy have to combine to be less than 0.21%. Doing so does not imply that you believe that nominal growth will be that low but ensures that you are making the same assumptions about nominal growth in the numerator (cash flows) as you are in the denominator (through the risk free rate).
  4. Leave it alone (for now) : The last option is to leave the risk free rate at current levels for now but adjust the rate in the future (perhaps at the end of your high growth period) to your normalized or intrinsic levels. Here again, the key is to make sure that your other valuation inputs are consistent with your assumption. Thus, for the period you use the current risk free rate, you have to use equity risk premiums, growth rates and inflation expectations consistent with that rate, and as you adjust the risk free rate to its normalized or intrinsic levels, you have to adjust the rest of your inputs.
To illustrate the four options when it comes to risk free rates, I value a hypothetical average-risk company with an expected cash flow of $100 million next year, using all four options. The inputs I use for the company under each option are summarized below, with the value computed in the last column:

The four choices yield different values but the most interesting finding is that the value that I get with the “leave alone” option is lower than the values that I obtain with my other options. Consequently, those who argue that we need to replace the current risk free rate with more normalized versions because it is the “conservative” path may be ending up with estimates of value that are too high (not too low).

While I prefer the “leave alone” option, I think that the other approaches are defensible, if your macro views are significantly different from mine. The danger, as I see it, comes when you mismatch your assumptions, with two of the most egregious examples listed below:

Note that while each input into these mismatched valuations may be defensible, it is the combination that skews the value vastly downwards or upwards. If you use  or do intrinsic valuations, checking for input consistency is more critical than ever before.

Bottom line
So, what is the bottom line? Like almost everyone else, I find myself in uncharted territory, with interest rates approaching zero in many currencies and like most others, I feel the urge to “fix” the problem. There are three broad lessons that I take away from looking at the data.
  1. Central banks tweak interest rates. They don’t set them. Consequently, I am going to spend less time worrying about what Janet Yellen does in the interest rate room and more on the fundamentals that drive rates. I will also grant short shrift to anyone who uses central banks as either an excuse or looks to them as a savior in their investing.
  2. When risk free rates are abnormally low or high, it is because there are other components in the market that are abnormal, and I am not sure what is normal. For investors in the US and Europe who yearn for the normality of decades past, I am afraid that normal is not returning. We have to recalibrate our assumptions about what is normal (for interest rates, risk premiums, inflation and economic growth) and pay less heed to rules of thumb that were developed for another market (US in the 1900s) and another time.
  3. As investors, we can rage against interest rates being too low but it is what it is. We have to value companies in the markets that we are in, not the markets we wished we were in.

Financial Policy and the Role of the State

Does financial liberalization mean that LDC governments have no role to play in the financial sector? In an effort to identify how these governments can work effectively within the context of liberalized financial markets, some economists isolated seven major market failures that imply a potential role for state intervention. Their basic argument is “that (LDC) financial markets are markedly different from other markets”, “that market failures are likely to be more pervasive in these markets” and that “much of the rationale for liberalizing financial markets is based neither on a sound economic understanding of how these markets work nor on the potential scope for government intervention”. The seven market failures economists identified are the following:

(1) The “public good” nature of monitoring financial institutions: Investors need information about the solvency and management of financial institutions. Like other forms of information, monitoring is a public good – everyone who places savings in a particular financial institution would benefit from knowing that the institution was prospering or close to insolvency. But like other public goods in free-market economies, there is an undersupply of monitoring information, and consequently, risk-averse savers withhold their funds. The net result is fewer resources allocated through these institutions.

(2) Externalities of monitoring, selection, and lending: Benefits are often incurred by lenders who learn about the viability of potential projects from the monitoring, selection, and lending decisions of other lenders. Investors can also benefit from information generated by other investors on the quality of different financial institutions. Like other positive (or negative) externalities, the market provides too little information, and resources are under allocated or over allocated.

(3) Externalities of financial disruption: In the absence of government insurance (whether or not an explicit policy has been issued), the failure of one major financial institution can cause a run on the entire banking system and lead to long-term disruptions of the overall financial system.

(4) Missing and incomplete markets: In most developing countries, markets for insurance against a variety of financial (bank failure) or physical (e.g., crop failure) risks are missing. The basic problem is that information is imperfect and costly to obtain, so an LDC government has an important role in reducing these risks. It can, for example, force membership in insurance programs or require financial institutions as well as borrowers to disclose information about their assets, liabilities, and creditworthiness.

(5) Imperfect competition: Competition in the banking sector of most developing countries is extremely limited, meaning that potential borrowers usually face only a small number of suppliers of loanable funds, many of which are unwilling or unable to accommodate new and unknown customers. This is particularly true of small borrowers in the informal urban and rural sectors.

(6) Inefficiency of competitive markets in the financial sector: Theoretically, for perfectly competitive markets to function efficiently, financial markets must be complete (without uninsured risks) and information must be exogenous (freely available to all and not influenced by any one participant’s action in the market). Clearly, there are special advantages to individuals or entities with privileged information in LDC financial markets, and risk insurance is difficult, if not impossible, to obtain. As a result, unfettered financial markets may not allocate capital to its most profitable uses, and there can be substantial deviations between social and private returns to alternative investment projects. In such cases, direct government intervention – for example, by restricting certain kinds of loans and encouraging others – may partly or completely offset these imbalances.

(7) Uninformed investors: Contrary to the doctrine of consumer sovereignty, with its assumption of perfect knowledge, many investors in LDCs lack both the information and the appropriate means to acquire it in order to make rational investment decisions. Here again, governments can impose financial disclosure requirements on firms listed on local stock exchanges or require banks, for example, to inform customers of the differences between simple and compound interest rates or of the nature of penalties for early withdrawals of savings.

LDC governments have a proper role to play in regulating financial institutions, creating new institutions to fill gaps in the kinds of credit provided by private institutions (e.g., micro loans to small farmers and trades people), providing consumer protection, ensuring bank solvency, encouraging fair competition, and ultimately improving the allocation of financial resources and promoting macroeconomic stability. As in other areas of economic development, the critical issue for financial policy is not about free markets versus government intervention but rather about how both can work together (along with the NGO sector) to meet the urgent needs of poor people.

——

Rashid Javed is an Asian author. He writes articles about various topics of accounting and economics such as elasticity of demand and cash book.

Installment Loans for Bad Credit-Rapid cash assistance despite of bad credits

Are you suffering from uncertain monetary issues that are affecting your financial standing? Unexpected financial troubles can come up any next hours without letting you having prior knowledge. If you are not prepared of meeting your unforeseen financial pressures and looking for the swift fiscal remedy, here are installment loans for bad credit for you. This is the affordable financial assistance that comes with convenient terms and conditions. If you are having several bad credit factors, you can still enjoy this loan aid to get comfortable support.

Using the internet to get applied with installment loans for bad credit let you turn the application feasible and swift. Having a PC with internet connection does not let you leave the comfort of your home or office. Just complete a single online application form with few personal details regarding your income and checking account number. The funds that you had borrowed will send to your bank account without making much effort. Get this loan assistance with the ease of online way for trouble free and instant response.

Moreover, to get the deal with affordable rates, making comparisons and negotiation with the lender will be helpful. It is necessary for you to got though the terms and conditions of the lender associated with it before taking any decision. You can get this financial deal with least hassle of paper work.

As the name says, installment loans no credit check can also be approved by bad creditors without any snub. This loan is meant for bad creditors to offer them fiscal help to remove the financial issues right within least possible time. So, it does not matter if you are tagged with several bad factors like insolvency, foreclosures, bankruptcy, CCJ, arrears, late payments, missed payments etc., you can enjoy this loan aid with no snub.

Do not turn down if you are unaffordable to pledge anything as collateral, installment loans for bad credit are short term loan assistance. This is the suitable source of finance that offers you small money with the feasible repayment terms. You can simply avail the money to fulfill any of your financial expenses and desires without any fuss of collateral assessment and lots of faxing hassle.

Summary:

When you find your monthly income mismatching with your expenses and desires, apply with installment loans no credit check for comfortable financial support. This is the affordable and swift financial aid that comes with better terms. Now, remove your monetary issues by applying with this loan for hassle free and quick financial support.

How Business Cash Advance Can Save Your Business from Financial Crux

Cash flow is the interior and exterior of your business and is the lifeline for all businesses. Income could be referred to as cycle: your company uses cash to get assets which are then used to create products or services. They are then offered to get some funds and so the cycle is repeated. But what’s most important is that you positively manage and control these cash inflows and outflows.

Sometimes, when individuals are battling for capital to help keep businesses running, they get eccentric assets for financial help. Many banking institutions don’t really extend cash rather offer assistance and counseling that increase the cost of caring the client.

Cash advances and unsecured loans really are a better option to get your business quick money in crunch financial situations. The micro-banking companies offer several kinds of loans and cash advances to businesses for all needed reasons. Financing might be granted as secured or unsecured. In secured loan, collateral is provided to assist guarantee payment in case of default. In unsecured loan, no collateral is provided except just the borrower signature being a legal promise to pay back the loan amount as contracted.

Unsecured business loans and cash advances come in good belief that the borrower will repay the loan amount as contracted. Such cash advances can be for a lot of productive reasons including purchasing equipment and appliances, renovation, paying for bills or financing that dream franchise.

The opportunity to pay back the current and proposed obligations is crucial while approving financing. Cash advance loans are usually declined to those who’ve a present past due advance. Generally cash advance schemes the borrower’s ability to pay back is dependent upon the borrower’s monthly credit card sales receipts.

There are many benefits of business cash advance lending. The cash advance lenders are very flexible while approving this type of business loan. Even if your business has a low credit score, you can still get cash advance financing. Also the process of getting a business cash advance is instant. The loan application process is very simple, you just have to fill an online application form and the money will be transferred to you in just few business days. The cash advance can also be used for any business purpose without any restrictions. This way you can distribute the cash any where you deems fit.

Cash advance without direct deposit- Desirable financial scheme for everyone!

Without facing any difficulty, you can borrow of quick funds in the choice of loan if you search from internet. Do you like to obtain of urgent cash? If yes, it is better to opt for cash advance without direct deposit scheme which is available online. For applying this small financial help, it takes only few minutes to complete the whole loan procedure. To get applied for the loan, you should fill up loan application form with your full details such as name, gender, age and bank account. After you get the loan approval, the sanctioned loan amount is directly transferred into your bank account on the same day.

Moreover, you will have to follow certain formalities at the time of applying these loans. Usually, cash advance without direct deposit scheme is granted to US borrowers who attained above 18 years of age. The borrowers should have permanent job. And he or she should have a valid checking account in US. After you meet the above criteria, it is so easy to get applied for loan and borrow fast cash from lenders. You will be getting instant sum of money for up to $1500 if you are approved with this cash advance. In terms of loan repayment option, you just need to repay loan within 2 to 4 weeks. It is considered to be small and short-term cash advance designed to help many borrowers.

After you have borrowed of fast cash via cash advance without direct deposit scheme, it is helpful to fulfill all kinds of financial issues. All kinds of financial issues which include- home rentals, home improvement, tour expenses, unpaid grocery bills, travel expenses, and other small financial issues can be resolved with the assistance of this loan. Like other types of loans, such loan is associated with lots of advantages that you wish to take it.

Even if you have tagged with bad credit profile, it is accessible to avail for cash advance without direct deposit scheme and borrow quick funds at any cost. Today, many loan providers are widely offered these loans in order to help many borrowers. So, whenever you would like to avail of easy and fast cash, it is essential for you to check out online to get the low interest rates related to such loan. Overall, it is considered to be perfect cash solution in order to help many people who are in need of urgent cash.

Abell Bush consistently gives his advices on the loan related matters. His advices have always helped the loan seekers to find the right loan. To know more about pay check cash advance , zip payday loans visit http://www.nodirectdepositpaydayloans.net

How a Non-public Equity Company Operates Day To Day

The phrase non-public equity firm may sound puzzling for a few folks, but I hope in this post we will determine what it constitutes and why sometimes it really is a fairly controversial kind of company. First of all, we’ll split it all the way down to different elements in the term and we’ll define each and every expression. Equity may be the complete value of a offered asset, minus and connect liability.

Private equity is outlined as an asset that is not freely tradable on any offered stock industry – that’s, ordinary customers of the community or investors can not purchase shares within the asset. Hence the phrase private equity company is the partner involved with the investment decision that controls how the investment is supervisor. There might be a wide number of partnerships involve in the team (that have pooled all their monetary together), but the private equity company will be in which all the selections are created.

The SilverLeaf Financial business is a personal equity firm located in Utah. Since 2008, SilverLeaf Financial has acquired countless bucks throughout the US when it comes to it price assets. They mostly focused on obtaining financial loans that ranges value of $1 Million to $50 Million. SilverLeaf functions shut with FDIC, banking institutions, specific services and other financial organizations to purchase for that goal of potential monetization.

How SilverLeaf Financial functions?

1.. Just like any equity firms, SilverLeaf Financial maintains a constant movement of distress and/or defaulted first placement business complete loans from financial organizations for example FDIC, financial institutions, specific services, and so forth.

2. They accessibility and examine the asset and formulate the best possible strategy for potential monetization.

3. SilverLeaf Financial organization performs extremely extensive underwriting due diligence for each future loan, this includes authentic bank loan file, current industry information, on-site homework and borrower power assessment relative to each prospective loan and also the related collateral.

4. They obtain financial loans through negotiation at discounted values within suitable focus on variety.

5. Monetizing acquired property via deal-specific exit strategies.

Non-public equity firms have wide selection of various investment strategies for example sourcing funding for their investment strategies. It is common for personal equity firms to purchase undervalued firms or businesses that have been beneath appreciated. After acquiring, equity corporations like SilverLeaf Financial, attempt to enhance the bought company and promote them off for any revenue. Presently, SilverLeaf Financial company centers on acquiring financial loans that satisfy their criteria including:

1. Performance level of loan

2. Size of unpaid principal stability (UPB)

3. Geographic Location

4. Asset Course

5. Borrower capacity to aid a prompt discounted payoff or work out settlement

6. Cash Flow/Occupancy

7. Property age and situation

8. Recourse/Non-recourse

One of many key things which private equity firm is instantly remove the organization from the inventory marketplace. By performing this, it’ll permit them to create tough and controversial selections without the need to cope with shareholder concerns or concerns. They won’t want to launch data which may be deemed sensitive which could trigger negativity from community normally. The entire process of making the organization personal means that the private equity business is only accountable to a tiny group of traders.

The administration crew that receives mounted will frequently be fairly brutal with regards to cutting out portions of the company that no more produce a get, and will keep sections that do transform a get. This method may perhaps consist of the reduction of some employment but in lots of instances a lot in the first personnel could be stored on – as several of them will are aware of the company and surrounding market location in good detail.

When it comes to acquisitions, SilverLeaf Financial is expanding each year. Given that 2008 until these days SilverLeaf Financial firm have previously obtained over $500,000,000 in encounter value notes.

——

Since 2008, SilverLeaf Financial Silverleaf Baldwin has grow to be one of best not public equity organization in the US. It has already obtain just about half billion of acquisition and receiving superior with each year pass. Know further about Shane Baldwin Silverleaf Financial.

Role played by financial advisors in financial planning

Financial planning can be the most rewarding and at the same time one of the most challenging tasks. Economic instability has made it quintessential to come with sufficient investment since it helps to protect oneself of future uncertainty.

Accountants in UK help a lot when providing financial advice comes under concern. Financial advisor, also referred to as financial planner is actually a professional who comes from finance background and helps with financial planning service to business, individuals and even government in lieu of a commission or a professional fee. Professional service here can be in the form of investment advice that range from retirement planning to insurance advice. It also includes insurance advice in an attempt to provide financial protection that helps to cope with different types of emergency and need of huge sums of money. Financial advisors also help clients to build portfolio of investment. Investments that are in line with financial portfolio are anticipated to balance investment income and capital gains apart from acceptable level of risk through allocation of money.

There are many who wonder if they are really in need of freelance accountant in London or a financial advisor in the very first place. The answer to this question is somewhat subjective in nature. However, it is vital to understand that effective portfolio development or diversification of financial proceedings need higher degree of knowledge and constant research. Another important question that comes in here is ways to select experienced accountants in UK. Below are some of the issues that need to be clarified before a financial advisor is joined hands with:

Question about experience: Ask in detail about the term the person concerned has practiced as an advisor as well as type of firms that he or she has dealt with. Allow the accountant to describe experience in detail. Other than corporate experience, counselling experience is also vital here. Enquire about qualification: Ask questions that can help with establishing credentials of the advisor since there are personnel who come with neither experience nor qualification. It is imperative to analyse whether the concerned professional is keeping himself or herself updated.

Ask about services offered: Services offered by financial advisors must correspond to license, expertise and credentials. Selling securities or insurance products like mutual fund and stocks may need license or registration with the State or federal authority.

Ask about the approach followed: The financial advisors follow a unique approach when financial planning comes under concern. The approach must be understood and the professional chosen only if the approach appears comfortable. For example, a single plan can be developed that aims to cater to varied financial goals or a separate plan can also be chalked out that helps to reach each goal. The approach here must not be too conservative or aggressive.

Clarify terms of payment: The advisors are paid through commission, fixed salary or fees that are based upon working hours or come with a fixed slab. Regardless of type, things must be clearly specified and adhered to. Last but not the least, check out whether the concerned advisor faced any disciplinary action in career. Research properly and ask for opinion from colleagues and fellow entrepreneurs to get in touch with best accountant in UK.

Take advantage of excellent financial services offered by a reputed firm

Money plays an essential role in human being’s life. There are various personal and business needs that can be only accomplished by it. It is very important for people to save money for their future use. If you will not plan how to spend your savings, a day will come when there will be scarcity of wealth in your life. You need to maintain your wealth so that you can enjoy a good and perfect life in the future after your retirement. Retirement is a phase when people are released from their job with dignity and respect. That time, they required assistance of financial advisors who will help them in making right decision for making any investment.

There are several companies that offer financial services but you can’t trust on everyone. You need to be very careful while choosing the service provider that ensures to provide trusted financial solutions meeting your needs and requirements. The information mentioned in this article is about the most reliable professional firms specialized in offering a wide range of services at competitive charges. For many years, they are constantly serving their clients and customers with top notch services. If you need any sort of financial solutions, then you are at the best place.

They are one of the most experienced Wealth Protection Perth companies who came into existence with the purpose to deliver quality services such as financial planning, investments; self managed superannuation, retirement planning, real estate planning, small business advice and many more. Understanding the need of people, they commenced their business in this service industry. They offer financial plans that are tailor-made to service the unique and specific needs of their professional and valued clients. They apply new and fresh approach.

This is the reason why this Debt Management Perth Company is quite different from other service providers. They have a team of highly skilled, knowledgeable and proficient financial advisors and professionals who have the capability to handle any project with great integrity and expertise. Due to busy schedule people don’t have time to visit these places, hence these experts for them to address their financial and lifestyle goals. The topmost objective of these financial service providers is to guide their clients on their journey to successful wealth creation and preservation.

You can’t achieve success in your personal life or businesses instantly as it takes a lot of planning, discipline and good advice. With this believe, this Retirement Planning Perth Company introduced their business the financial industry. Through this retirement planning the adepts help in managing your retirement in the best professional and friendly manner. The primary aim of these professionals is to work together with you to establish, protect and grow your wealth. Go through their online website for more details.

Meet All Needs for Financial Uncertainty

There is a huge salaried segment that would find their monthly paycheque insufficient according to the needs of their lives. You can’t always find it very easy for meeting the requirements of life that comes without any notification in advance. If you have limited budget, you may fail to cover the expenses that arises without any notice in advance. Whenever you meet with the complexities of uncertain life, you often fail to get rid of the without having adequate amount in hands. If you have been wondering to cater small needs, 12 month loans are there for enabling you carrying out the affordable deals spending hardly two minutes online. Accessible of any desired cash will provide you total satisfaction whenever you find that you are empty pockets during month end fiscal problems.

Sometimes, a small budget fail to bear all expenses that arises in the middle of the month just to provide you extreme ease just to cope up with the needs that are unforeseen in nature. Lenders will never ask you to indulge into lengthy application process as all you have to go for procuring any amount spending hardly two minutes online. 3 month loans if you are having permanent residence and citizenship of the country, you will be freed to avail the finance without waiting for a longer time period. It would be the first step which will take you to accomplish your dream project which is still pending without having some funds in banks. There are not only one deal meant for satisfying any specific need of your life but you can chose among the innumerable loan deals offered to assist those residing in UK just for waiting to get rid of unforeseen difficulties of life.

12 month payday loans are there for all eligible applicants of United Kingdom who are just required a helping hand that can support them during adverse financial condition. There are several reasons you might have for considering external sources when it comes to borrow some extra money. When you need to borrow desirable loans, you can immediately go online not for meeting small needs but can satisfy the unexpected monetary needs without waiting for longer time period. Due to the quick accessibility of electronic loans, quickly you can go for borrowing the funds from the safest money lending mode. Easy to avail sufficient money for various purposes that can also settled down conveniently within the duration of 12 months.

Grace Jones is a financial counselor for loans connected matters and additional. Visit on the links to know extra about 12 month payday loans and 3 month loans.

financial New career gave me financial freedom

I was given the most wonderful opportunity for a new career — something that I would never dream I’d be doing with my time and energy. After 20 years in healthcare administration where I had to work at least 10 to 12 hours a day in a high-stress, go-go-go, constantly busy office and sometimes even had to work weekends just to keep up with all the paperwork and compliance things, I was looking for a less stressful, even fun career. I wanted (and needed for my physical and mental health) something that would allow me to work at my pace, have flexibility, be able to spend time with my family and friends???.and even volunteer some of my time to help out in some of my favorite charities. And I found it. I finally found it! My new company gave me the tools, and training site which includes all the free marketing I can utilize to generate referrals for major companies, which equals money for me. I receive $20 to $30 per person who I refer and who completes a trial offer from those major companies. This is extremely easy to do, and costs me nothing but my time. But it gives me the ability to make several hundred or several thousand dollars per month. The time I put into it determines my level of compensation. The position is simple web-based work. If you can copy and paste, send emails and surf the web, you can do this, just like me ??? either part-time or full-time. Did you read that right? You get paid to surf the net and spend time on social media sites. This is the kind of profession that you have so much flexibility that you can do it part-time along with another job until you get it going and see the financial results that you want or need! They provide you complimentary start up tools, and support you each step of the way???.all along the way. You only need an email address (and those are easy to get and are even free — I use Outlook) and internet access so you can work anywhere. All work is done online and you will not have to package, print or ship anything at all. There are also no sales involved. You don’t have to host parties, make calls to your friends or neighbors, knock on doors, or stock anything in your garage or the corner of your dining room. You don’t have to be on the phone or bake anything or get all dressed up to go to the office. And, with the cost of gas, it is nice to be able to save the wear and tear on a car???..you can put that money that you’d spend on travel into your pocket so you can travel on a fun and relaxing vacation. My husband and I are planning a cruise to celebrate our wedding anniversary! Make a smart move like I did and get started now. Check out this website: http://instantpaydaynetwork.com/landingpage.php?user=trentonjane You’ll be glad you did. And, so will your pocketbook, your nerves, and profession, and your self-esteem because you are making things happen in your own life!

Accounting Analyst Job Descriptions

Accounting Analysts have different forms of job descriptions. This is because they work in different industries and function in different positions. Here are some job descriptions for Accounting Analysts.

1. Senior Audit/Financial Analyst Job Description

This job description is for Senior Audit/Financial Analyst working as a member of the invoice validation team.

The individual must have the ability to manage multiple tasks, tools and systems simultaneously. To meet organizational goals he/she must be able to create, organize, communicate, and facilitate activities that allow the company to deliver on its commitments.

He/She will be responsible for developing, analyzing, and executing approved daily Invoice Validation tasks for company and its subsidiaries.

He/She will display advanced level of proficiency in the audit and analysis of invoices; dispute resolution tasks; and in the updating, maintaining and supervising of all company financial systems.

2. Senior Accounting Analyst Job Description

The individual will perform monthly closing of general ledgers, including the preparation of journal entries, account analysis and reconciliation. He/She will perform monthly consolidation of the assigned business segments.

He/She will perform monthly close and reconciliation of general ledgers; consolidate financial results for multiple business units; supervise accounting and financial activities and projects across multiple business units.

He/She will assist in preparing management reports and impromptu requests; and perform other duties as assigned.

3. Accounting Analyst Jo Description

The individual will execute accurate completion of daily, monthly, weekly asset reconciliations; perform reconcilements on holdings, accruals, trades and cash balances. He/She will verify accuracy of client statements at month end and make sure investment fund information is correctly reported in client month end statements.
He/She will also complete impromptu reports to meet client deliverables.

4. Accounting Analyst I Job Description

This job description is for Accounting Analyst in a financial services industry.

The individual will be responsible for supporting companys accounting process by performing moderately complex to complex duties. He/She will perform journal entries, financial statement production, account reconciliations, audit support and coordination, reporting and analysis, and/or portfolio administration, and General Ledger maintenance.

He/She will independently perform, review, and serve as a resource to junior team members on advanced to complex level accounting, analysis, reconciliations and research. He/She will resolve issues and navigate obstacles to deliver work product.

He/She will independently prepare, review, and serve as a resource to junior team members on advanced to complex level financial, management and regulatory reporting and related audit support.
He/She will create and implement data, files, systems, processes and procedures.

He/She will resolve issues and navigate obstacles to deliver work products. Monitor and maintain relationships with business partners; facilitate and review internal controls to ensure an effective and efficient financial system.

5. eCommerce Accounting Analyst Job Description

The individual will support and maintain the day-to-day duties of company Financial Shared Services functions, such as General Accounting and Accounts Payable.

He/She will be responsible for a broad array of data entry and accounting duties relevant to the eCommerce Accounting platforms. He/She will be accountable for the management and processing of eProcurement, Telecommunications and Procurement Card supplier invoices.

He/She will primarily be responsible for performing data entry of paper-copy eProcurement and Telecom invoices inquiries. He/She will provide customer support to invoice inquiries, maintain Master File Data to support invoice processing. He/She will participate in the establishment of new units and accounts.

Dan Edwards provides thousands of free Job Descriptions on various jobs, including Accounting Job Descriptions for job seekers and employers.

Student Financial Aid Types You Should Know

There are many types of financial aids offer to college and university students. While a few are gifted aids and do not need to be paid back; others are provided as a loan and need to be paid back after the completion of the education program.

In general, student financial aids are grouped in below categories:
Grant
Fellowship
Scholarship
Loan
Work Study
Waiver What are the differences between these financial aids? Many people confuse especially on grant, fellowship and scholarship. Let’s take a brief look on these financial aids. Grant, Fellowship & Scholarship A grant is a gifted financial aid for a student that does not have to be paid back. Fellowship is a fund awarded to a graduate student in a college or university. And scholarship is a financial aid usually awarded based on merit or academic achievement. Both fellowship and scholarship are grant. Practically, these terms very little in different and in fact, these terms are used interchangeably in representing fund gifted to students to support their college or university study.

Loan

A study loan is a financial aid offers to students and these money need to be repaid after the completion of the study program. Although there are loans offered with zero interest rate by charities, associations or religions organization, most of loan programs have repayment provisions and repayment interest rate applied.

Work Study

This program provides jobs that enable students to earn a portion of school costs through employment at the institution. Many colleges and universities offer job to students where they can earn their school fee and part of their living expenses.

Waiver

Under certain circumstances, a college or university may allow a student to attend the courses without paying tuition or other costs. A certain eligibility requirements need to be met in order for eligible for the waiver.

Last Words

Ideally, all students are dreamed to get free money (grant, fellowship or scholarship) to aid their study needs. Although there are many scholarships available out there for students to apply, beware of “Scholarship Scam”. Remember if you have to pay to get money, it probably a scam.

That’s all for this time. See you soon.

Next time we shall talk about “Scholarship scam” and how to protect yourself from these scholarship scams.

http://www.studykiosk.com/ – Listing the best Distance Learning Programs available to date, It explains the many ins and outs of attending a “Virtual Classroom” to help you succeed in realizing your educational goals from self-improvement, to certification, to earning an online degree.

Careers at Live Well Financial

Do you have the eagerness to improve the lives of senior citizens? Looking for the right reverse mortgage company? Then, we would be happy to have you!

Looking for the right company to see your needs can be quite confusing. Since all of them offer quality service and never-ending promises to their clients, you should start from companies approved by the National Reverse Mortgage Lenders Association. By this method, you could prevent fraud and scam encounters. Their site updates the best insurance companies in the country and warns the interested clients to fully understand the mortgages before applying into one. In their list, is Live Well Financial Incorporated.

Live Well Financial is a seasoned veteran in the insurance industry; it specializes in reverse mortgages which benefits senior citizens. The management team has built a superior Web-based, user-friendly reverse mortgage technology system. The system provides real-time pricing decisions, allowing brokers to find the product that best meets the needs of their borrowers, and automates most of the processing work. Live Well Financial aims to recruit and support each partner to help him succeed in his Reverse Mortgage. They also have benefits and advantages shown for you to be efficient in your career. So generally, they propose several margins for their clients to suit each lifestyle. They give you more options to choose from.

The company Live Well Financial is the leader in reverse mortgage. The company has a prompt customer service with all the necessary details. They will offer you a mortgage that fits your needs and improve your lifestyle. While it offers mortgages, Live Well Financial.com also accepts online application for partnership and you can start your career here.

This company also has a website for easier online application if you are interested, follow this link, http://www.livewellfinancial.com . Once you are in the site, you will be able to understand because the site is clean and concise. You will find what you need right away because there are no missing pages. The information in the site is updated from time to time for fresh details. You will be instructed and supported by the team members. They will help you with your goal to become successful. Once you’re accepted, you can even be home-based and do all your work over the phone or via e-mail. Think about it, you’re getting paid double for staying at home. What an offer! If in any case you need assistance, please don’t hesitate to contact Live Well Financial immediately.

Live Well Financial offers a variety of jobs. Some of these are among the following: Full Time Store Manager, Assistant Store Manager , Admissions Representatives – Field Admissions, Loan Officers, Insurance Sales Associate, Part Time Retail Sales Consultant, Financial Adviser/Financial Planner-Existing Book, Full Time Retail Sales Consultant, Sales Financial Representative, Part-Time Branch Customer Service Representative, Business Account Executive and other Financial Career Opportunities.

Other than these jobs listed above, you can also try to visit

“>Live Well Financial.com for a detailed list about each job. Salaries vary on position and performance.

Why go for Financial Certifications

Most newbies wish to find out how financial certifications help them with their professional aspirations and which exam makes most sense to go for.

Considering the fact that the candidates are from different backgrounds, the answer cannot be generalized. There are some who are already, in some way are related to the finance industry, some coming with IT backgrounds, some already possess a solid knowledge of financial products and involved instruments and a good general understanding of the industry, then there are those who before going for graduation in quant degree, would like to build up a more solid foundation with an official exam.

Some of the most sought after certifications are:

> Chartered Financial Analyst (CFA) offered by CFA Institute (formerly known as AIMR):

Three levels –

* The Level I : introduction to asset valuation, financial reporting and analysis, and portfolio management techniques.

* The Level II :asset valuation, and includes applications of the tools and inputs (including economics, financial reporting and analysis, and quantitative methods) in asset valuation.

* The Level III : portfolio management, and includes strategies for applying the tools, inputs, and asset valuation models in managing equity, fixed income, and derivative investments for individuals and institutions.

> Financial Risk Manager (FRM) offered by GARP – Global Association of Risk Professionals

Two Parts –

Part I:

* Financial Markets and Products

* Foundations of Risk Management

* Quantitative Analysis

* Valuation and Risk Models

Part II:

* Market Risk Measurement and Management

* Credit Risk Measurement and Management

* Operational and Integrated Risk Management

* Risk Management and Investment Management

* Current Issues in Financial Markets

> Professional Risk Managers (PRM) offered by PRMIA – Professional Risk Managers’ International Association

Four Exams –

* EXAM I: Finance Theory, Financial Instruments and Markets

* EXAM II: Mathematical Foundations of Risk Measurement

* EXAM III: Risk Management Practices

* EXAM IV: Case Studies, PRMIA Standards of Best Practice, Conduct and Ethics, Bylaws

Then there are others like :

> The Financial Services Authority (FSA), a universal British finance regulator; you can take these two exams either together or separately, and there’s also certificates in Investment Management and Corporate Finance if you’re going down that route. (www.sii.org.uk)

> Associate of the Society of Actuaries (ASA) – focuses the fundamental concepts and techniques for modeling and managing risk

> Chartered Enterprise Risk Analyst (CERA) – centres around knowledge in the identification, measurements and management of risk within risk-bearing enterprises

> Fellow of the Society of Actuaries (FSA) – deals with financial decisions concerning retirement benefits, life insurance, annuities, health insurance, investments, finance, and enterprise risk management are made, including the application of advanced concepts and techniques for modeling and managing risk. (http://www.soa.org/education)

The thing they all have in common is that these certifications:

> help you to better equip yourself with the essential knowledge to pursue a career in finance

> empower you by adding credentials to your resume

> expand your professional opportunities

> provides you with the ability to network with some of the world’s leading finance professionals

Let’s consider what the most sought after certifications have in store for you :

Talking from curriculum perspective:

The FRM curriculum goes into the detail on areas of financial and non-financial risk while the CFA curriculum provides a broad view of financial analysis in general.

The FRM Level 1 syllabus will overlap with some part of the CFA curriculum, mainly in the areas of quantitative analysis, portfolio theory, derivatives, and fixed income securities etc.

The FRM and CFA overlap at Level 2 is minimal. Still, some concepts that are mentioned briefly in the CFA curriculum, such as value at risk, credit risk, risk budgeting, and hedge funds, are expanded upon in level 2 FRM curriculum.

Exclusive to the FRM exams are readings on operational and integrated risk management, Basel II, current issues in financial markets, and case studies in risk management.

Broadly speaking, the FRM exams tend to have more of a quantitative focus than the CFA exams.

Regarding PRM syllabus, it’s almost the same as FRM syllabus with an overlap of almost 80-90%.

PRM is a bit more extensive and rigorous on quantitative part. CFAs or Actuaries who want a risk management certification prefer PRM since it grants them exemption of upto 2 exams.

CFA and FRM Exam are slightly more popular among test- takers and among employers because it has a longer history, however PRM is quickly gaining ground and all three designations have come to be equally respected.

Talking about the job opportunities:

The key thing to note is that job markets are diverse.

The CFA is helpful if you want to work in equity research or, say, become a debt analyst.

The FRM/PRM would be more relevant to a risk manager.

For other Financial Services jobs (e.g., consulting, sales, management), these credentials are elements that complement your overall presentation.

Like the MBA, they don’t buy you advancement per se, rather they enhance your resume.

Let me assure you that among the industry, there is NO prevailing ‘argument’ for or against one of the exams.

So take a look at the syllabi, test-structure and most importantly your long term career goals to make out which one suite you the best.

Once you zero-in, take the plunge!

Pristine is an institution focused on creating world class professionals in the area of finance and particularly risk management investment banking. It has been started by team with significant experience in the field of risk management/ Private Equity/Consulting and Investment Banking, with educational background of IIT/IIMs and SIBM.

Direct Cash Advance Lenders Help to Limit Financial Disasters

Financial complications are often masked by using direct cash advance lenders to solve unexpected money troubles. The convenient money transfer helps take care of the impending problems, but does not solve the underlying problems. If your budget is not able to keep up with monthly expenses, there needs to be a change.

Some people are willing to spend the money towards cash advance fees in order to keep from having to cut back elsewhere as a PEW study discovered. Instead of lowering the cost of everyday living, the majority of people were willing to pay the extra in fees in order to keep their accounts safe. Responsible direct cash advance online lenders offer a low cost money option as compared to the price which would be paid in overdraft or late fees if the payments were not made. .

One of the keys to a successful budget is to monitor its workings every month or two. Throughout the year, your household costs will rise and fall. If you adjust budgeted costs accordingly, you may not have to apply with a direct cash advance lender.

Consider how your heating or air conditioning costs fluctuate throughout the year. For those folks living up north, they should have a plan to support the higher price to heat the home throughout the warmer months. Those in the south will need to do the same as far as summer energy bill as the air conditioners are used to battle the triple digit weather.

There are budget rise and falls throughout the year as ‘other’ expenses creep in; every month there is a family birthday or a holiday requiring gifts and let’s not forget sign up costs for the children’s activities or summer camps.

There always seems to be some kind of extra cost every month. If your budget does not support expenses which are not set in stone then there are often times a person is left scrambling for cash in order to take care of the extra cost. When there is no personal emergency savings account then a person is left to juggle other expenses, find a way to earn some extra cash, use credit cards or apply for a direct cash advance. Fast money from direct lenders will help limit money problems turning to financial disasters.

A great motivator to perfect the ebb and flow of a monthly budget would be to set up a reward system for yourself. Set your monthly goals and if you match them, give yourself a small portion of the month saved to treat yourself. These rewards should never take away from a savings or add to debt. Treat yourself to a favorite coffee, an ice cream or put the money away and save up for something bigger.

The key to motivation is to stay focused. A plan of any kind needs dedication to make it successful. Without the drive to reach your monthly goals then there are too many chances for a budget to fail. you don’t need to make the process complicated like mixing long-term plans into the mix. Get focused on your current situation and you will begin to see how the results can positively affect your long-term retirement plans. Stay clear of online direct cash advances or credit card usage in order to keep your debt small.

Spotya! Online Cash Advances promotes responsible borrowing to keep your debt from raging out of control. Use cash advances in those emergency situations in between paychecks and keep your budget on target. Visit Spotya! to find out more about cash advance applications.

Importance of outsourcing financial analysis

One cannot judge the financial position of a company just by looking at the financial statements. Financial statement analysis helps the owners know about the financial strength and weaknesses of the company with respect to its assets and liabilities; it also helps the owners to compare their financial health with other companies of the same business in the industry.

Following are the three techniques of financial statement analysis:

* Horizontal analysis

* Vertical analysis

* Ratio analysis: Ratio analysis is sub-divided into following five categories:

Liquidity Ratios

Asset Management / Activity Ratios

Debt Management / Solvency / Leverage Ratios

Profitability Ratios

Market Ratios

Outsourcing financial analysis provides the following benefits to the organization:

* Low cost: One of the basic and foremost benefits of outsourcing financial analysis includes accomplishment at a low cost. The expenses of the business are possibly reduced by 50% to 60%.

* Professional help: It is done by the experts. On the other hand, in-house employees who have the understanding of outsourcing come with the requirement of higher salary.

* Ensures quality work: It guarantees quality work

* Time saving: It allows a business to save time

* Decision making: Proficient and improved decision making

* Data analysis: Error-free and precise data analysis

* Efficiency: It increases competence

Outsourcing financial analysis emphasizes on the growth of the organization, and at the same time, diminishes cost. One can find thousands of outsourcing financial analysis services online which are easily accessible and ensure on time delivery.

For more information, samples and tips on business plans writing, please visitFinancial Analysis

Financial ratios

Special Tax financial debt relief for single mothers

What are generally the use of ?
There are several packages on the part associated with the government of the United States Of America to shield single moms. Several single moms would like to try this kind of facility. More compared to thirty million humans have acquired the facility last year alone as well as number will certainly rise this kind of year.
There tend to be unique liberties intended for single mothers on tax then there is no secret concerning it. This provides already been consequently regarding a large number of years. There tend to be things of which help to make that an incredibly special one pertaining to single mothers. Single moms can easily declare the actual tax advantage as well as there will probably be virtually no contends from the husband. For example, upon child tax credit, single mothers can easily inquire so that you can lower through her taxable income as well as possibly be accepted because the child is dependent on her. The advantage is actually which even if the father acknowledges the child, the single mom can still claim intended for tax deductions.

The special tax debt relief is an excellent scheme for single moms which need to have to aid her children with a fixed annual income. Believe connected with some sort of mother who requirements to help help two children below the actual age of 16 having an annual profits associated with $40,000. Existence will be miserable if you have tax for the money furthermore. The actual scheme is regarding single mothers who need to pay a lot regarding attention for you to their own every day chores. In the event that you are generally single mom, you need to be aware associated with it and make entire use of the benefits it envisages.
Child care tax credit is actually an additional tax financial debt relief option pertaining to single mothers. This is definitely extremely invaluable since quite a few of the working moms want for you to pay for your nanny although she will be functioning in many other firms to help support her children. The single functioning mother can easily claim up to 35% of child tax credit of the child care expenses. In straightforward conditions, the mom can help to save in place in order to $6000 when she has two kids so that you can attention. The idea is usually surely a huge sum as well as mother can certainly expend the actual income with another thing.

Another advantage for single mother is actually in which she can easily declare she is as being the brain of the family. As the head regarding the particular family, she can claim a larger standard connected with deductions and IRS allows the idea. Generally there will be added benefits to the single moms simply because she is usually at the same time any single mother as well as mind of your family. So she will certainly get an additional benefit within tax paying.
The tax credits intended for single mothers can also occur seeing that tax personal debt relief along with most of these are usually basic taxation rules. She require not really acquire worried regarding taxes as a result of positive aspects she possess in paying tax. Previous to proceeding for tax settlement, you should be cognizant of the multifaceted advantages as well as deductions the federal government provides to be able to you. The actual exclusive tax benefits which might be offered regarding single moms will enable them to cause an inconvenience no cost life. They can use the deductions within different ways in order to lead a much better life.

In order to get Visit Website, it is important that you should be aware about certain things. Financial Help for Single Moms can be available through the government schemes.

INDIAN MONEY MARKET

Q1: What is Indian Money Market? Explain its functions.
Ans: INDIAN MONEY MARKET.
*INTRODUCTION:
~ The money market is a market for lending and borrowing of short-term funds.
~ Money market deals in funds and financial instrument having a maturity period of one day to one year.
~ The instruments in the money market are close substitutes for money as they are of short-term nature and highly liquid.
~ Money market is not a place (like the stock market). It is in fact, a mechanism undertaken by telephone.
~ Also, it is a collection of markets for several financial instruments such as call money market, commercial bill market, etc
*PARICIPANTS IN THE MONEY MARKET:
~ The transactions in the money market are of high volume involving large amount. So, money market is dominated by a small number of large players.
~ Some of the important players in the money market are:
i) Government.
ii) Reserve Bank Of India.
iii) Discount and finance House of India.
iv) Banks
v) Financial Institution.

vi) Corporate firms.
vii) Mutual funds.
viii) Non-banking finance companies.
ix) Primary Dealers.
x) Securities Trading Corporation of India.
xi) Provident Funds.
xii) Public sector undertakings (PSU).
# The role of important players in the money market is discussed below:
*RESERVE BANK OF INDIA:
~ The reserve Bank Of India is the most important player in the Indian Money Market.
~ The Organised money market comes under the direct regulation of the RBI.
~ The RBI operates in the money market is to ensure that the levels of liquidity and short-term interest rates are maintained at an optimum level so as to facilitate economic growth and price stability.
~ RBI also plays the role of a merchant banker to the government. It issues Treasury Bills and other Government Securities to raise funds for the government.
~ The RBI thus plays the role of an intermediary and regulator of the money market.
*GOVERNMENT:
~ The Government is the most active player and the largest borrower in the money market.

~ It raises funds to make up the budget deficit.
~ The funds may be raised through the issue of Treasury Bills (with a maturity period of 91day/182day/364 days) and government securities.
*BANKS:
~ Commercial Banks play an important role in the money market.
~ They undertake lending and borrowing of short term funds.
~ The collective operations of the banks on a day to day basis are very predominant and hence have a major impact and influence on the interest rate structure and the liquidity position.
*FINANCIAL INSTITUTIONS:
~ Financial institutions also deal in the money market.
~ They undertake lending and borrowing of short-term funds.
~ They also lend money to banks by rediscounting Bills of Exchange.
~ Since, they transact in large volumes, they have a significant impact on the money market.
*CORPORATE FIRMS:
~ Corporate firms operate in the money market to raise short-term funds to meet their working capital requirements.
~ They issue commercial papers with a maturity period of 7 days to 1 year. These papers are issued at a discount and redeemed at face value on maturity.
~ These corporate firms use both organised and unorganised sectors of money market.
*INSTITUTIONAL PLAYERS:
~ They Consist of Mutual Funds, Foreign Institutional Players, Insurance Firms, etc.
~ Their level of Participation depends on the regulations.
~ For instance the level of participation of the FIIs in the Indian money market is restricted to investment in Government Securities.
*DISCOUNT HOUSES AND PRIMARY DEALERS:
~ They are the intermediaries in the money market.
~ Discount Houses discount and rediscount commercial bill and Treasury Bills.
~ Primary Dealers were introduced by RBI for developing an active secondary market for Government securities.
~ They also underwrite Government Securities.
*FUNCTIONS OF MONEY MARKET:
i) It facilitates economic development through provision of short term funds to industrial and other sectors.
ii) It provides a mechanism to achieve EQUILIBRIUM between DEMAND and SUPPLY of short-term funds.
iii) It facilitates effective implementation of the RBIs monetary policy.
iv) It provides ample avenues for short-term funds with fair returns to investors.
v) It instils financial discipline in commercial banks.
vi) It provides funds to meet short term needs.
vii) It enhances capital formation through savings and investment.
viii) Short-term allocation of funds is made possible through inter-bank transactions and money market instruments.
ix) It helps in employment generation.
x) It provides funds to government to meet its deficits.
xi) It helps to control inflation.
Q2) Explain the structure of Indian Money Market?
Ans: STRUCTURE OF INDIAN MONEY MARKET.
*INTRODUCTION:
~ Money market is a market for lending and borrowing of short-term funds and financial instruments.
~ The Indian money market comprises of:
^ ORGANISED SECTOR
^ UNORGANISED SECTOR
~ While the organised sector comes under the direct regulation of RBI, the unorganised sector comprises of indigenous bankers, money lenders and unregulated non-banking financial institution.
*STRUCTURE:
~ The Indian money market consists of two main sectors:
^ ORGANISED SECTOR
^ UNORGANISED SECTOR
1) ORGANISED SECTOR:
~ The RBI is the apex institution that controls and monitors all the organisations in the organised sector.
~ Also, the organised money market is composed of various components / instruments that are highly liquid in nature.
~ The instruments traded are call money, treasury bills, commercial bills, certificate of deposits, commercial papers, repos etc.
~ The organised money market is further diversified with the establishment of the Discount and finance House of India, and Money market Mutual Funds.
# The instruments of the Organised money Market are:-
i) CALL MONEY AND NOTICE MONEY MARKET:
~ The call money market is the most important segment of the Indian money market. It is also called as inter-bank call money market.
~ Under call money market, funds are transacted on an over-night. Generally, banks rely on call money market where they raise funds for a single day.
~ The notice money market funds are transacted for a period of 2 to 14 days. The loans are to be repaid at the option of either the lender or the borrower.
~ The rate at which funds are borrowed / lent in this market is called the call money rate.
~ The call money rate (that depends on depends on demand for and supply of funds) is highly variable from day to day and from centre to centre.
~ The main participants in the call money market are commercial banks (excluding RRBs), co-operative banks and primary dealers.
~ The Discount and finance House of India and non-banking financial institutions like LIC, GIC, UTI, NABARD, etc, also participate in the call money market.
~ Call money markets are generally concentrated in large commercial centres like Mumbai, Delhi, Chennai, Kolkotta and Ahmedabad.
~ The RBI intervenes in the call money market because it is highly sensitive and it is the indicator of liquidity position in the organised money market.
ii) Treasury Bills Market:
~ Treasury bills are short-term securities issued by the RBI on behalf of the Government of India.
~ Treasury bills are of three types: 91 day treasury bills, 182 days treasury bills and 364 day treasury bills.
~Since these bills are issued through auctions, interest rates on all types of treasury bills are determined by market forces.
~ Treasury bills are highly liquid and are readily available.
~ They give assured yields at a low transaction cost.
~ Treasury Bills are eligible for inclusion in the SLR.
~ Moreover, they have negligible capital depreciation.
~ Treasury Bills are available for a minimum amount of Rs 25000 and in multiples of RS 25000.
~ Treasury Bills are traded in the secondary market. Commercial banks, Primary Dealers, Mutual Funds, Corporates, and Financial Institutions, Provident / Pension funds and Insurance companies participate in the treasury Bills Market.
~ However Treasury Bills Market in India is very narrow and undeveloped.
iii) COMMERCIAL BILLS:
~ A commercial bill is a short- term, negotiable, self liquidating instrument drawn by the seller on the buyer for the value of goods delivered by him.
~ Such bills are called trade bills / bills of exchange and when they are accepted by banks, they are called commercial bills.
~ Generally the bill is payable at a future date (mostly, the maturity period is up to 90 days).
~ During this period, the seller may discount the bill with the banks. The commercial banks may rediscount these bills with FIs like EXIM bank, SIDBI, IDBI, etc.
~ Thus, commercial bills are very important for providing short-term credit to trade and commerce.
#Derivative usance promissory notes:
~ In order to eliminate movement of papers and to facilitate multiple rediscounting, the RBI introduced Derivative Usance promissory Notes (DPNs).
~ These are backed by commercial bills having usance period up to 90 days.
~ Since they are exempted from stamp duty, institutions can easily rediscount these bills.
~ Discount and finance House of India trade in DPNs drawn by commercial banks as well as DPNs sold to investors.
iv) CERTIFICATES OF DEPOSITS: (CDs)
~ Certificates of Deposits are unsecured, negotiable promissory notes issued by commercial banks and development financial institutions.
~ CDs are marketable receipts of funds deposited in a bank for a fixed period at a specified rate of interest.
~ They are highly liquid and riskless money market instruments.
~ CDs were originally introduced in India to enable commercial banks to raise funds from the market.
~ The RBI has modified its original scheme for CDs. The following are the recent guidelines for the issue of CDs:-
#ELIGIBILITY: CDs can be issued by commercial banks (except RRBs and Local Area Banks) and financial institutions that have been permitted to raise short-term loans by RBI.
#AMOUNT: While banks can issue CDs depending on their requirements, financial institutions can issue CDs within the limit fixed by the RBI.
#MINIMUM SIZE: The minimum size of an issue for a single investor is Rs 1 lakh and it can be increased in multiples of Rs 1 lakh.
#DISCOUNT RATE: CDs are issued at a discount to face value. Bank / Financial institutions are free to determine discount rates on floating rate basis.
#INVESTORS: CDs are issued to individuals, corporations, companies, trusts, etc.
#TRANSFERABILITY: CDs are freely transferable by endorsements / delivery. However dematted CDs have to transferred as per specified procedures. There is no lock-in period for CDs.
#MATURITY: Commercial banks can issue CDs with a maturity period between 7 days to 1year. Financial institutions can issue CDs with a maturity period between 1 year to 3 years.
#RESERVE REQUIREMENTS: CDs are subject to CRR and SLR since banks have to report CDs to RBI.
#LOANS / BUY-BACK: Commercial banks / FIs cannot give loans against CDs. Similarly, they cannot buy-back their own CDs before maturity period.
#FORMAT: Banks /FIs should issue CDs only in the dematerialized form. However, investors have the option to seek CDs in physical form.
~ Due to absence of a well-developed secondary market in CDs, the size of CD market in India is quite small.
v) COMMERCIAL PAPERS:
~ Commercial paper is an unsecured, highly liquid money market instrument in the form of a promissory note / a dematerialised form through any of the depositories registered with SEBI.
~ It has fixed maturity whereby the purchaser is promised a fixed amount at a future date.
~ Commercial paper are issued by leading nationally reputed manufacturing and finance companies (public / private sector).
~ They are issued on a discount to face value.
~ Commercial papers are issued (by corporates / primary dealers / all India financial institutions) on the following conditions:
a) The tangible net worth of the issuing company should not be less than RS 4 crores.
b) The working capital limit of the company has been sanctioned by banks / financial institution.
c) The borrowal a/c of the company is rated as a standard asset by banks / financial institutions.
~ All eligible participants should have a minimum rating P2 from CRISIL.
~ Commercial Papers have maturity period between 7days and 1year from the date of issue.
~ CPs are issued in denominations of Rs 5 lakhs (minimum) or multiples of Rs 5 lakhs.
~ Individuals, banks, corporate bodies, NRIs and FIIs can invest in commercial papers.
~ Every issuer must appoint an IPA (Issuing and Paying Agent) for issuance of commercial papers. Only a scheduled commercial bank can act as an IPA.
vi) REPOS AND REVERSE REPOS:
~ The RBI achieves the function of maintaining liquidity in the money market through REPOS / REVERSE REPOS.
~ The repo / reverse repo is a very important money market instrument to facilitate short-term liquidity adjustment among banks, financial institutions and other money market players.
~ A repo / reverse repo is a transaction in which two parties agree to sell and repurchase the same security at a mutually decided future date and price.
~ From the sellers point of view, the transaction is called a repo, whereby the seller gets immediate funds by selling the securities with an agreement to repurchase the same at a future date.
~ Similarly, from the buyers point of view, the transaction is called a reverse repo, whereby the purchaser buys the securities with an agreement to resell the same at a future date.
~ The RBI, commercial banks and primary Dealers deal in the repos and reverse repo transactions.
~ The financial institutions can deal only in the reverse repo transactions i.e. they are allowed only to lend money through reverse repos to the RBI, other banks and Primary dealers.
~ The maturity date varies from 1 day to 14 days.
~ The two types of repos are:
^ Inter-bank repos (the transaction takes place between banks and DFHI).
^ RBI repos (The repos / reverse repos are undertaken between banks and the RBI to stabilize and maintain liquidity in the market).
~ Repos and Reverse Repos are used for following purposes:-
^ For injection / absorption of liquidity.
^ To create an equilibrium between the demand for and supply of short-term funds.
^ To borrow securities to meet SLR requirements.
^ To increase returns on funds.
^ To meet shortfall in cash positions.
vii) DISCOUNT AND FINANCE HOUSE OF INDIA (DFHI)
~ The Discount and Finance House of India is jointly owned by the RBI, the public sector banks and all India financial institutions.
~ The DFHI helps in developing and stabilizing the money market by stimulating activity in the money market instruments and developing secondary market in those instruments.
~ The DFHI deals in treasury bills, commercial bills certificates of deposits, commercial papers, short term deposits, call money market and govt securities. It also participates in repo operations.
~ Thus, the DFHI has helped corporate entities, banks and financial institutions to invest their short-term surpluses in money market instruments.
viii) MONEY MARKET MUTUAL FUNDS: (MMMFs):
~ The RBI introduced Money Market Mutual Funds to enable small investors to participate in the money market. Thus, MMMFs mobilises saving of mutual funds and invest them in such money market instruments that mature in less than one year.
~ The following are the important features of MMMFs:-
^ MMMFs can be set by scheduled commercial banks and public finance institutions.
^ Individuals, corporates, etc can invest in MMMFs.
^ The lock-in period has been reduced to 15 days.
^ MMMFs are under the regulation of SEBI.
^ NRIs and Overseas Corporate Bodies can invest in MMMFs (on a non-repatriation basis) floated by commercial banks / public sector financial institutions / private sector financial institutions. However, they do not need separate permission from the RBI.
^ MMMFs are ideal for investors seeking low-risk investment for short-term surpluses.
2) UNORGANISED SECTOR:
~The unorganised Indian money market mainly comprises of indigenous bankers, money lenders and unregulated non-banking financial intermediaries.
~Though they may exist in urban centres, their activities are mainly concentrated in rural areas. In fact, 36% of rural households depend on these for their financial requirement.
~ The main components of unorganised money market are:
i) INDIGENOUS BANKERS:
~ These financial intermediaries operate as banks by receiving deposits, giving loans and dealing in hundies (The hundi is a short term indigenous bill of exchange)
~ The rate of interest varies from market to market / bank to bank.
~ However they do not solely depend on deposits, they may use their own funds.
~ They are called by different names like Kathawals, Saraf, Shroffs,Chettis,etc.
~ They provide loans to trade and industry and agriculture.
~ The main advantages of indigenous bankers are simple and flexible operations, informal approach, personal contact, quick services and availability of timely funds.
~ However, they have their drawbacks like a very high rate of interest (18% to 36%), combining banking with trade, interest in non-banking activities like general merchants, brokers, etc.
ii)MONEY LENDERS:
~ Money lenders predominate in villages and they deal in the business of lending money.
~ Their interest rates are very high:
~ loans are given to agricultural labourers, marginal and small farmers, artisans, factory workers, etc for unproductive purposes.
~ Their services are prompt, informal and flexible.
iii)UNREGULATED NON_BANK FINANCIAL INTERMEDIARIES:
# Chit funds:
^ They are saving institutions wherein members make regular contribution to the fund.
^ The fund is given to some member by bids / draws.
^ Chit funds are famous in Kerala and Tamil Nadu.
#Nidhis:
^ They are mutual benefit funds as loans are given to members (from the deposits made by members themselves) at a reasonable rate of interest.
^ The loans are generally given for purposes like house construction / repairs.
^ Nidhis are prevalent in South India
# Loan companies:
^ Loan Companies (also called as finance companies) have capital in the form of borrowings, deposits or owned funds.
^ They attract deposits by offering high rate of interest and other incentives.
^ Loans are also given at a very high rate of interest (36% t0 48% p.a).
^ Traders, small-scale industries and self-employed people are the main participants.
iv) FINANCE BROKERS:
~ They are found in all major urban markets, especially in cloth market, commodity market and grain market.
~ They are intermediaries between lenders and borrowers.
Q3: Explain the drawbacks of money market in India.
Ans: DRAWBACKS OF INDIAN MONEY MARKET.
*INTRODUCTION:
~ The money market is a market for lending and borrowing of short-term funds.
~ It deals in highly liquid financial instruments like call money, treasury bills, commercial bills, commercial paper, etc.
~ The RBI, Government, commercial banks, financial institutions, corporate firms, money lenders, etc are the important players in the Indian Money Market.
~ In spite of the various measures taken by the RBI to strengthen and deepen the money market, it still remains comparatively underdeveloped.
*DRAWBACKS:
~ The following are some of the drawbacks of the Indian Money Market:-
i)DICHOTOMY:
~ Dichotomy i.e. existence of two markets (organised money market and unorganised money market) is a major defect of the Indian Money Market.
~ The unorganised money market comprises of indigenous bankers, money lenders, chit funds, nidhis, loan companies and finance brokers that do not come under the control and supervision of the RBI.
~ This unorganised sector is mainly concentrated in the rural areas and it does not differentiate between short term and long term finance and between the purposes of finance.
~This puts a limit on the RBIs control over the money market.
ii) LACK OF INTEGRATION:
~The RBI finds it difficult to integrate the organised and the unorganised money market.
~While the RBI can control and supervise the working of the organised sector effectively, the heterogeneous unorganised sector is out of RBIs control.
~ There is no uniformity in the practices and operations of the unorganised money market.
~ Moreover, the interest rates in both the markets are also different.
~ Thus there is lack of integration in the Indian money market.
iii) MULTIPLICITY IN INTEREST RATES:
~ There is diversity in rates of interest in the Indian money market.
~ This multiplicity in the interest rates is due to lack of mobility of funds from one section of the money market to another.
~ The rates differ from institution to institution even for funds of the same duration.
~ Although the wide differences are being narrowed down, the existing differences do hamper the efficiency of the money market.
iv) ABSENCE OF ORGANISED BILL MARKET:
~ The existence of a well-organised bill market is essential for effective linking up various credit agencies.
~ It refers to a mechanism where bills of exchange are purchased and discounted by commercial banks / financial institutions.
~ The bill market is not yet developed in India due to the following reasons:
^ Banks keeping large amount of cash.
^ Preference for borrowing rather than discounting bills.
^ Overdependence on cash / cheque transactions.
^ High stamp duty on usance bill, etc.
v) SHORTAGE OF FUNDS:
~ The Indian money market is characterized by shortage of funds.
~ Various factors like inadequate banking facilities, low savings, lack of banking habits, existence of parallel economy, etc lead to shortage of funds.
~ Thus, demand for short-term funds far exceeds the supply. This results in high interest rate.
~ However now banks are flush with funds especially in urban area as people prefer to invest their money with banks rather than keeping them as deposits in the unorganised sector.
vi) SEASONAL STRINGENCY OF MONEY:
~ Since agriculture continues to play a major role in the Indian economy, farm operations do influence the demand for and supply of money.
~ Thus seasonal stringency of money and high interest rate during the busy season (November to June) is a striking feature of the Indian money market.
~ Also, there a wide fluctuations in the interest rates from one reason to another.
~ however, the RBI makes attempt to reduce the fluctuations by adding money into the money market during the busy season and withdrawing the funds during the slack season.
vii) INADEQUATE CREDIT INSTRUMENTS:
~ The Indian money market lacked adequate short-term paper instruments till 1985-86.
~ Only call money market and bill market existed.
~ Also there were no specialised dealers / brokers in the money market.
~ After 1985-86 the RBI Introduced new credit instruments in the market like CDs, CPs, MMMF, etc, but they are not yet fully developed in India.
viii) ABSENCE OF A WELL-ORGANISED BANKING SECTOR IN RURAL AREA:
~ There is poor banking system in the rural area due to the problems of overheads and maintenance of branches.
~ The commercial bank branches in rural area are only 40% of the total bank branches.
~ This also hampers the development of money market in India.
ix) INEFFICIENT AND CORRUPT MANAGEMENT:
~ Faulty selection, lack of training, poor performance appraisal and faulty promotions result in inefficiency and corruption in the banking sector.
~ this adversely affects the success and performance of money market.
*CONCLUSION:
~ Thus the Indian money market is relatively less developed.
~ It has yet to acquire sufficient depth and width.
~ It cannot be compared with the developed money market in London and New York.
Q4: Discuss the various reforms taken by the RBI to strengthen the Indian money market?
Ans: REFORMS IN THE INDIAN MONEY MARKET:
*INTRODUCTION:
~ Money market is a market for lending and borrowing of short-term funds and it deals in highly liquid financial instruments.
~ Indian Money Market comprises of unorganised and organised sectors that suffer from various drawbacks.
~ To overcome these drawbacks and to strengthen the market, the RBI has taken certain measures.
~ These measures are taken with a view to deeper and widen the Indian Money Market.
*MEASURES:
~ The following are the measures taken by the RBI to reform the Indian Money Market:-
i) DEREGULATION OF INTEREST RATES:
~ The RBI has deregulated interest rates on deposits (except saving deposits) as well as on advances (except on export credit for a period of 180days before shipment).
~ The ceiling on the call money market, inter-bank short-term deposits, bill rediscounting and inter-bank participation has been removed and the rates are decided on market forces.
~ This ensures healthy competition and improves efficiency.
ii) INTRODUCTION OF NEW MONEY MARKET INSTRUMENTS:
~ The RBI introduced new money market instruments to diversify the Indian money market and make it more effective.
~These include instruments such as 182-day treasury bill, 364-day treasury bill, commercial papers and certificates of deposits.
~Government, commercial banks, financial institutions and corporates can raise funds through these instruments.
~The RBI has also reduced the minimum investment amount and the minimum maturity period to expand the investor base for CDs and CPs.
iii) REDUCTION IN CRR AND SLR:
~ The RBI has brought about considerable reduction in the Cash Reserve Ratio (CRR) and the Statutory Liquidity Ratio.
19912010
CRR15%6%
SLR38.5%25%
~ This reduction improves the liquidity of banks and they can lend more money in the market.
iv) REMITTANCE OF STAM DUTY:
~ The RBI has remitted the stamp duty on bills to make the bill market more popular in India.
~ In fact the bill market is not developed in India due to:
^ High discount rates
^ Over dependence on cash / cheque transactions.
^ Greater chances of dishonour.
v) REPOS AND REVERSE REPOS:
~ The RBI introduced Repos in Dec 1992 and Reverse Repos in November 1996.
~ Repos and Reverse Repos bring about a balance in the short-term fluctuations in the liquidity existing in the money market.
~ Also, they provide a short-term avenue to the banks to park their surplus funds in the money market.

vi) LIQUIDITY ADJUSTMENT FACILITY: (LAF)
~ The RBI introduced LAF as an important tool for adjusting liquidity through REPOS and REVERSE REPOS.
~ This stabilizes short-term interest rates / call rates in the money market.
vii) MONEY MARKET MUTUAL FUNDS:
~ The RBI introduced Money Market Mutual Funds to enable small investors to participate in the money market. Thus, MMMFs mobilises saving of mutual funds and invest them in such money market instruments that mature in less than one year.
~ The following are the important features of MMMFs:-
^ MMMFs can be set by scheduled commercial banks and public finance institutions.
^ Individuals, corporate, etc can invest in MMMFs.
^ The lock-in period has been reduced to 15 days.
^ MMMFs are under the regulation of SEBI.
^ NRIs and Overseas Corporate Bodies can invest in MMMFs (on a non-repatriation basis) floated by commercial banks / public sector financial institutions / private sector financial institutions. However, they do not need separate permission from the RBI.
^ MMMFs are ideal for investors seeking low-risk investment for short-term surpluses.
^ Resource mobilized through this scheme can be invested in money market instruments as well as in rated corporate bonds / debentures with a maturity period up to 1 year.
viii) DISCOUNT AND FINANCE HOUSE OF INDIA (DFHI):
~ In 1988, DFHI was set up jointly by the RBI, public sector banks and financial institutions.
~ The main reason for setting up DFHI was to impart liquidity to money market instruments and the development of active secondary market in these instruments.
ix) DEVELOPMENT OF INTER-BANK CALL AND NOTICE MONEY MARKET:
~ The call and notice money market is an inter-bank market all over the world. So, the NARSHIMAM Committee recommended that we adopt the same policy in India.
~ However, the RBI had permitted the non-banking institutions to participate in the call and notice money market as lenders.
~ So the RBI is now taking steps to gradually reduce the role of non-banking institutions and transform the call and notice money market into a pure interbank money market.
x) REGULATION OF NON-BANKING FINANCIAL CORPORATIONS:
~ A non-banking financial corporation (NBFC) cannot carry on any business of a financial institution (including acceptance of Public Deposit) without a Certificate of Registration (COR) from the RBI.
~ Companies accepting public deposits are required to comply with all the directions on public deposits, prudential norms and liquid assets.
~ They are obliged to submit regular returns to the RBI.
xi) CLEARING CORPORATION OF INDIA LIMITED (CCIL):
~ The Clearing Corporation of India LTD (CCIL) was registered under the Companies Act 1956, with the State Bank Of India as the chief promoter.
~ The CCIL clears all transactions in government securities and repos reported on the NDS (Negotiated Dealing System) of the RBI.
~ It also clears rupee / Us dollar foreign exchange spot and forward deals.
~ All trades in government securities below Rs 20 crores have to be settled through the CCIL.
~ Trades in government securities above 20 crores can be settled through the CCIL or the RBI.

xii) RECOVERY OF DEBTS:
~ For speedy recovery of debts, the RBI has set up Special Recovery Tribunals in 1993.
~ These provide legal assistance to banks to recover their dues.
xiii) MINIMUM LOCK-IN PERIOD:
~ In October 2004, the RBI reduced the minimum lock-in period for term deposits (below Rs 15 lakhs) from 15 days to 7 days.
~ Thus, the depositor can deposit money for 7 days and earn interest.
~ This increases the term-deposits with the banks.
~ Thus, the money can be effectively deployed in the market.

A Handy Primer on the World of Financial Services

Money, they say is everything and there’s quite a bit of truth in that. One may romanticize things, going on and on about looking at life through rose tinted glasses. But the fact remains that everything in this world that we do, costs money.

This is why human beings around the world spend a good part of their lives in pursuit of gainful employment, in-order to earn the money that they would need to sustain themselves. Apart from regular, living expenses, there are instances where one is required to seek the assistance of financial services providers to fund their acquisitions or investments. Included in the ambit of the scope of work, services providers could range from banking and credit firms to investment and insurance firms.

In this day and age, mobility holds the key to liberating numerous opportunities for personal and professional growth. While people in the cities and A-towns have found it easier to gain access to funding, those from towns situated further away from the city centre have had to traditionally face multiple hardships when trying to round up the necessary funds.

Thankfully, the situation has been changing quite steadily and there are many operators reaching out with finance offers to people in villages and B-category towns. These are often availed off to purchase farming equipment and tractors, etc. They can also be used to augment one’s business premises and their ilk.

Insurance is another sector under the ambit of finance providers. Some offer solutions in specific sectors such as motor insurance and healthcare. These days, tailor-made packages are in high demand and insurance players are ramping up their game in a bid to attract new clients, even as they roll out personalized plans to retain existing ones.

Getting a roof over the head is one of life’s most essential dreams. People that have gone on to achieve this can later rest easy, knowing quite well that they have at-least one place on the planet where strangers cannot evict them out. In the rural areas, people often struggle on account of their credit worthiness. While banks have their own criteria, private institutional financiers often step up to fill in the demand-supply gap. What’s more, rural clients can also secure financing for activities such as house repairs and renovations.

At the end of the day, the markets can become quite saturated with players big and small. Since regulation can be difficult, there is always the risk of frauds and scams. Thus, it is extremely crucial that one choose an operator that has the necessary checks and balances in place. Reputation and market standing therefore, are strong indicators for choosing a provider and not, the lowest possible quote.