Corporate Finance

https://www.investopedia.com/terms/c/corporatefinance.asp
https://corporatefinanceinstitute.com/resources/knowledge/finance/corporate-finance-industry
https://cleartax.in/g/terms/corporate-finance
https://www.managementstudyguide.com/corporate-finance.htm
https://en.wikipedia.org/wiki/Corporate_finance
https://www.bajajfinserv.in/corporate-finance
https://study.com/academy/lesson/what-is-corporate-finance-definition-fundamentals.html
https://www.britannica.com/topic/corporate-finance
http://people.stern.nyu.edu/adamodar/pdfiles/acf4E/webcastslides/session1.pdf -imp
Financing Activity and Investing Activity
https://saylordotorg.github.io/text_managerial-accounting/s16-02-three-types-of-cash-flow-activ.html
Financing Activity
https://www.freshbooks.com/hub/accounting/financing-activities#:~:text=In%20the%20cash%20flow
%20statement,cash%20dividends%20and%20adding%20loans.
https://www.investopedia.com/terms/c/cashflowfromfinancing.asp
https://www.myaccountingcourse.com/accounting-dictionary/financing-activities
https://corporatefinanceinstitute.com/resources/knowledge/accounting/cash-flow-from-financing-
activities/
https://www.wallstreetmojo.com/financing-activities/
https://www.accountingtools.com/articles/what-are-cash-flows-from-financing-activities.html

Investing Activity
https://www.freshbooks.com/hub/accounting/investing-activities#:~:text=Investing%20activities%20are
%20one%20of,within%20a%20specific%20reporting%20period
https://www.investopedia.com/terms/c/cashflowfinvestingactivities.asp
https://corporatefinanceinstitute.com/resources/knowledge/accounting/cash-flow-from-investing-
activities/
https://www.myaccountingcourse.com/accounting-dictionary/investing-activities
https://www.accountingtools.com/articles/what-are-cash-flows-from-investing-activities.html
https://www.readyratios.com/reference/accounting/cash_flows_from_investing_activities.html

Asset Management
Asset management refers to a systematic approach to the governance and realization of value from
the things that a group or entity is responsible for, over their whole life cycles. It may apply both to
tangible assets (physical objects such as buildings or equipment) and to intangible assets (such as
human capital, intellectual property, goodwill or financial assets). Asset management is a systematic
process of developing, operating, maintaining, upgrading, and disposing of assets in the most cost-
effective manner (including all costs, risks and performance attributes).
The term is commonly used in the financial sector to describe people and companies who manage
investments on behalf of others. Those include, for example, investment managers that manage the
assets of a pension fund.
It is also increasingly used in both the business world and public infrastructure sectors to ensure a
coordinated approach to the optimization of costs, risks, service/performance and sustainability.
The International Standard, ISO 55000, provides an introduction and requirements specification for a
management system for asset management.
https://corporatefinanceinstitute.com/resources/knowledge/finance/asset-management/
https://www.investopedia.com/terms/a/assetmanagement.asp#:~:text=Asset%20management
%20refers%20to%20the,over%20time%20while%20mitigating%20risk.&text=The%20role%20of%20an
%20asset,will%20grow%20a%20client's%20portfolio.
https://www.chevinfleet.com/gb/news/what-is-asset-management/

Asset management is the service, usually performed by a firm, of directing a

client's wealth or investment portfolio on their behalf. These firms typically have
investment minimums, so their clients usually have a high net worth.
Understanding the field of asset management and what role asset management
companies play will help you hire the right professional to meet your financial
goals. You may even learn about money management options you didn't know
were available to you.

What Is Asset Management?

Asset management companies take investor capital and put it to work in different
investments, including stocks, bonds, real estate, master limited partnerships,
and private equity.

These companies handle investments according to an internally

formulated investment mandate, or process. Many asset management
companies offer their services to wealthy businesses and individuals because it
can be difficult to offer services to smaller investors at an appropriate price.

Wealthy investors typically have private accounts with asset management firms.
They deposit cash into the account, in some cases with a third-party custodian,
and the portfolio managers take care of the portfolio using a limited power of
attorney.

How Asset Management Works

Asset managers work with client portfolios by considering several variables,
including the client's unique circumstances, risks, and preferences.

Portfolio managers select positions customized for the client's income needs, tax
circumstances, and liquidity expectations. They can even base decisions on the
client's moral and ethical values as well as personality.

High-end firms may cater to a client's every whim, offering a bespoke experience.
It's not unusual for the relationship between investor and asset management firm
to span generations as managed assets are transferred to heirs.

Asset Management Costs

Investment fees for asset management can range anywhere from a few basis
points to a substantial percentage of the shared profits on performance-
agreement accounts. These fees will depend on the specifics of the portfolio.

In other cases, firms charge a minimum annual fee, such as $5,000 or $10,000
per year.
Asset Management Companies and Specialization
Each asset management firm has its area of specialization. Some are generalists
—usually, large companies that design financial services or products they think
investors will want and need.

Some firms have a narrow focus, concentrating on one or a handful of areas,

such as working with fellow long-term investors who believe in a value
investing or passive investing approach.

Some firms only cater to wealthy clients through private accounts known
as individually managed accounts, or with hedge funds. Some focus exclusively
on launching mutual funds, and some build their practice around managing
money for institutions or retirement plans, such as corporate pension plans.

Finally, some asset management companies provide their services to specific

firms, such as managing assets for a property and casualty insurance company.

Many different business models exist in the asset

management world and not all of them are equally beneficial
to the client.

Asset Management Accounts

You may have heard of an asset management account, even if your banking
institution doesn't call itself an asset management company. These accounts are
basically designed to be a hybrid, all-in-one account, combining checking,
savings, and brokerage.

You can deposit your money, earn interest on it, write checks when needed, buy
shares of stock, invest in bonds, and acquire mutual funds and other securities
all from one, centralized account. In many, but not all, cases, the account is
actually managed by a portfolio manager of the institution.

Fees might run you between 1% and 2.75%, depending on your account
balance, but you may receive other advantages that make the price worth your
while.6

For example, some banks offer less-common investing strategies, such as

allowing you to create collateralized loans against securities in your asset
management account at highly attractive rates. This could be useful if you found
an outside investment opportunity that required immediate liquidity.
Sometimes firms will also bundle additional services, such as insurance policies,
so you save money by purchasing more products from the same company.

Asset Management vs. Wealth Management

As we've discussed, asset management has all to do with focusing on
investments. It's a service that's performed by a firm for clients who typically have
a high net worth.

On the other hand, wealth management takes a closer look at the financial
situation of an individual (or family). In doing so, these people can figure out how
best to manage their wealth and protect it in the long run.

Depending on who you are and your level of wealth you may only need one of
these services. Figuring out which one will serve you best could help you to
reach your financial goals.

Key Takeaways
 Asset management is the service, usually performed by a firm, of directing
a client's wealth or investment portfolio on their behalf.
 These firms typically have investment minimums, so their clients usually
have a high net worth.
 Asset managers work with client portfolios by considering several
variables, including the client's circumstances, risks, and preferences.
 Today, some asset management firms have re-tooled their businesses to
serve smaller investors

The term “asset management” refers to the financial service of

managing assets by means of financial instruments with the aim of
increasing the invested assets. Thus, an asset manager is a
company whose business purpose is managing wealth. Asset
managers bundle a person’s savings and invest them as profitably
as possible in the world economy.

Investment opportunities include government financing through

sovereign bonds, private sector financing through equity or bond
purchases, and financing infrastructure needs, with the aim of
generating a return that is shared between the asset manager as
remuneration and the investor as their return.
ASSET MANAGEMENT—THE INDUSTRY OF
MANAGING WEALTH
In contrast to financial or investment advice, asset
management not only provides investment suggestions in the
form of an advisory service, but the asset manager makes
and carries out investment decisions autonomously.

Owing to their business purpose, asset managers either

operate as independent companies or as subsidiaries and
divisions of banks and insurance companies. They manage
the assets of institutional investors (such as pension funds,
insurance companies, banks, foundations, charitable or state
institutions) and/or private investors.

Asset managers use special mandates or funds to manage

these assets, which in turn are subdivided into special funds
for exclusively institutional investors and mutual funds for
institutional and private investors.

Financial Analysis
https://www.investopedia.com/terms/f/financial-analysis.asp -imp
https://en.wikipedia.org/wiki/Financial_analysis -imp
https://corporatefinanceinstitute.com/resources/knowledge/finance/types-of-
financial-analysis/
https://www.financialplannerworld.com/what-is-financial-analysis/

https://www.inc.com/encyclopedia/financial-analysis.html

https://www.analyticssteps.com/blogs/introduction-financial-analysis
-imp

https://marketbusinessnews.com/financial-glossary/financial-
analysis/ - imp
 What is Financial Analysis?

Financial analysis is the examination of financial information to reach business decisions. This
analysis typically involves an examination of both historical and projected profitability, cash
flows, and risk. It may result in the reallocation of resources to or from a business or a specific
internal operation. This type of analysis applies particularly well to the following situations:

 Investment decisions by external investor. In this situation, a financial analyst or investor

reviews the financial statements and accompanying disclosures of a company to see if it is
worthwhile to invest in or lend money to the entity. This typically involves ratio analysis to see
if the organization is sufficiently liquid and generates a sufficient amount of cash flow. It may
also involve combining the information in the financial statements for multiple periods to derive
trend lines that can be used to extrapolate financial results into the future.

 Investment decisions by internal investor. In this situation, an internal analyst reviews

the projected cash flows and other information related to a prospective investment (usually for a
fixed asset). The intent is to see if the expected cash outflows from the project will generate a
sufficient return on investment. This examination can also focus on whether to rent, lease, or
purchase an asset.

The key source of information for financial analysis is the financial statements of a business.
The financial analyst uses these documents to derive ratios, create trend lines, and conduct
comparisons against similar information for comparable firms.

The outcome of financial analysis may be any of these decisions:

 Whether to invest in a business, and at what price per share.

 Whether to lend money to a business, and if so, what terms to offer.

 Whether to invest internally in an asset or working capital, and how to finance it.
Financial analysis is one of the key tools needed by the managers of a business to examine how
their organization is performing. For this reason, they are constantly querying the financial
analyst about the profitability, cash flows, and other financial aspects of their business.
Type of Account
https://www.patriotsoftware.com/blog/accounting/types-of-accounts-
subaccounts-accounting/
Finance with excess finance available excess funds available so invest. Take loans borrow if shortage
funds. Corpororate finance deals with managing funds of a corporation. Short term lians and external
sources are needed to be earned in case of shortage. This is done in order to meet expense.
Liquid assets
Quick asset/current asset is inventory,acc recievable, theey need to be invested in shortage of cash
Fixed asset.
Inventory is remaining stock bit sold yet. Unsold goods opening stock
Stock and inventory same
Asset is resource something corporation own eg cash acc recievable long term land,motor
vehicel,furniture can be small scale to large scale
Assts u own for a long time is long term asset.
Goods /Merchandise/units which compaany produce and provide raw material. These are semi
produced goods that a company hold as raw material. These help in making products which company
sells to earn profit. At the end of financial year, a company have goods available to sell.
Merchandise refers to any type of goods, including personal or commercial products, as
well as commodities that are sold to members of the public (retail) or other businesses
(wholesale).
Merchandise may also refer to ‘freebies’ – promotional items, like the custom drink
bottles here,  that are distributed or sold free of charge. These items may include calendars,
magnets, wall art, stationery, greeting cards, textiles, badges, or any number of of things.
The term may also refer to the stocks that a commercial enterprise has. If merchandise
levels are low, it might mean that stocks need to be replenished.
Goods can be anything from merchandise, supplies, raw materials to already completed products.
All items that are movable and are sold to a particular buyer.

Ingredients is goods/merchandise used to bake the cake and kitchen is asset, cake is profuct
If sales there, revenue there. If money is not needed, investment can be done in CA and fixed asset
Account recievable are sales sold on credit.
Finance is
1. From where to raise and Where to invest whether need to invest in fixed asset or current asset
Fixed asset are more imp because it includes machinery, land
Current asset are required in starting inventory are CA . If inventory is insold then cash is not generated.
Cash management
2. To increase firm value or value of shareholder
Shareholder are real owner the more they are happy with value the more good managerial decision will
be taken by them
The best time to seek funding is when investors are asking for meetings and you don't need the
money. Generally speaking, you want to raise money right after you have done something that
increases the value of your company and gives people a sense that 'the train is leaving the station'.

https://www.investopedia.com/ask/answers/032515/what-are-different-ways-corporations-can-raise-
capital.asp

Firms can raise the financial capital they need to pay for such projects in four main ways: (1) from
early-stage investors; (2) by reinvesting profits; (3) by borrowing through banks or bonds; and (4) by
selling stock. When owners of a business choose sources of financial capital, they also choose how
to pay for them.
Raising and investing is same thing
When your assets increase, your equity increases. When your
liabilities increase, your equity decreases.

What is merchandising?
There are two types of merchandising companies - retail and wholesale.
Merchandising refers to any type of activity that helps boost a product’s sales to a
consumer, specifically in the retail trade. In a store, it refers to the variety of goods available
for sale and the display of those items in such a way that interest is stimulated and
consumers are enticed to make a purchased.

In the world of retailing, visual display merchandising means sales using product design,
pricing, selection, display, and packaging that encourages members of the public to spend
more money. This includes when and where to present products to consumers, discounting,
and special offers. For example: “Buy three for the price of two” is an example of
merchandising.

Marketing experts say merchandising is the glamorous side of retail, be it in upmarket

fashion stores or supermarkets. The merchandising professional literally decides which
products to buy and how they are displayed.

Asset and Liabilities

Assets
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https://corporatefinanceinstitute.com/resources/knowledge/accounting/types-
of-assets/ -imp
https://www.patriotsoftware.com/blog/accounting/accounting-basics-assets/

Assets are recorded on a company’s balance sheet along with liabilities and equity. 

Equity refers to the amount of money contributed by shareholders, plus retained

earnings (or losses). 
Liabilities are balances that effectively reduce a company’s overall spending power,
such as outstanding loans or debt. 

For accounting purposes, a company’s value is equal to their assets minus their
liabilities.

Types of Assets and Liabilities

The two main types of assets and liabilities are long-term and current. 

The economic value provided by long-term assets is typically used to pay long-term
liabilities, and the economic value provided by current assets is used to pay current
liabilities.

For example, large loans may be paid with revenue-generating PP&E, while dividends
are paid with cash.

Determining the value of your

assets
The value of an asset is not always the original cost. When determining an asset’s
value, look at factors like fair market value and depreciation.
Fair market value is how much your asset would sell for in the current market. Your
fair market value can be higher, lower, or equal to its original purchase price. To find
the price of an asset, conduct a fair market value analysis. Gather asset information
and compare your asset to other assets on the market. Consider consulting a
professional, such as an accountant, to evaluate your assets.

As mentioned, depreciation is the process of spreading an asset’s cost over a longer

period of time. To determine your asset’s value, calculate depreciation expense.

Recording your assets in

accounting
Assets help show you the financial status of your small business. The more frequently
you update your balance sheet, the more accurate your accounting books will be.

While reporting your assets on your business’s balance sheet, you must record them in
descending order, based on their level of liquidity.

The more liquid an asset, the less time it takes to convert it into cash. List your most
liquid assets first. Always list your cash first since you don’t need to convert it

Record both current and fixed assets on your balance sheet. Because current assets
are more liquid, list them higher up on your balance sheet. Fixed assets are less
liquid, meaning you list them further down on your balance sheet.

Here’s a breakdown of the order your assets should be in on your balance sheet:

1. Cash (under current assets)

2. Current assets (short-term and more liquid)
3. Fixed assets (long-term and less liquid)
https://efinancemanagement.com/financial-accounting/meaning-and-different-
types-of-assets - imp
https://www.wallstreetmojo.com/types-of-assets/ -imp

The two main types of assets are current assets and non-current assets. These
classifications are used to aggregate assets into different blocks on the balance
sheet, so that one can discern the relative liquidity of the assets of an organization.

Investment Assets
 The classifications used to define assets change when viewed from an investment
perspective. In this situation, there are growth assets and defensive assets. These types
are used to differentiate between the manner in which investment income is generated
from different types of assets.

Growth assets generate income for the holder from rents, appreciation in value, or
dividends. The values of these assets can rise in value to generate a return for the holder,
but there is a risk that their valuations can also decline. Examples of growth assets are:

 Equity securities

 Rental property

 Antiques

Defensive assets generate income for the holder primarily from interest. The values of
these assets tend to hold steady or can decline after the effects of inflation are
considered, and so tend to be a more conservative form of investment. Examples of
defensive assets are:

 Debt securities

 Savings accounts

 Certificates of deposit
Current Assets
https://byjus.com/commerce/what-are-current-assets/
Fixed Assets

Current Liabilities
https://www.patriotsoftware.com/blog/accounting/tangible-
vs-intangible-assets/
 General
The definition of corporate finance varies considerably across the world. In the United
States, for example, it is used in a broader way than in the UK to describe activities,
decisions and techniques that deal with many aspects of capital allocation – including
funding of new activities, investment in and divestment of assets, and the generation
and management of cash.

In the UK and many other countries, the terms corporate finance and corporate financier
tend to be associated with transactions in which existing capital is utilised and new
capital raised in order to create, develop and grow new projects and ventures, and to
acquire other businesses.

Corporate finance is often associated with corporate transactions that lead to the
creation of new capital structures and/or change of ownership.

Types of corporate finance activity

 Mergers and acquisitions (M&A), and demergers involving private companies.

 Mergers, demergers and takeovers of public companies, including public-to-

private deals.

 Management buy-outs, buy-ins or similar of companies, divisions or subsidiaries

– typically backed by private equity.

 Equity issuance by companies, including the listing of companies on a

recognised stock exchange by way of an initial public offering (IPO) and the use of
online investment and share-trading platforms; the purpose may be to raise capital for
development or to restructure ownership.

 Financing and structuring joint ventures or project finance.

 Raising infrastructure finance and advising on public-private partnerships and

privatisations.

 Raising capital via the issuance of other forms of equity, debt, hybrids of the two,
and related securities for the refinancing and restructuring of businesses.
 Raising seed, start-up, development or expansion capital.

 Raising capital for specialist corporate investment funds, such as private equity,
venture capital, debt, real estate and infrastructure funds.

 Secondary equity issuance, whether by means of private placing or further issues

on a stock market, especially where linked to one of the transactions listed above.

 Raising and restructuring private corporate debt or debt funds.

Principal roles
The principals in corporate finance transactions may include:

 Companies acting through their directors and other staff, including specialists in
strategy, corporate development and M&A;

 Institutional or private investors, including private equity firms and venture

capitalists;

 Banks and independent lenders who provide debt;

 Governments and other public authorities and agencies.

Inventory and Stock

https://www.asp.com.au/main-difference-between-stock-inventory/

https://www.educba.com/stock-vs-inventory/

https://www.wallstreetmojo.com/inventory-vs-stock/ - very imp

What Is the Difference Between Inventory and Stock?

Stock items are the goods you sell to customers. Inventory includes the products you sell, as well
as the materials and equipment needed to make them. Although the definition of stock is concise,
there are four main types of inventory: raw materials, work in progress, MRO supplies and
finished goods. 
Stock
Stock includes finished products, parts, materials—whatever you sell to customers. The more
stock—or products—you sell, the more revenue your business generates.

Inventory
Inventory includes finished products and all the assets a business owns or uses to complete
production. There are four main types of inventory

1. Raw materials 
Raw materials are parts or components used to make a final product. For example, if your
company manufactures HVAC parts, the raw materials used to make fan motors, compressors, or
thermostats might include:

 Metal
 Plastic 
 Fiber or other materials 

2. Work in Progress (WIP)

Work-in-progress, or work-in-process, inventory is still in production. Some examples are
incomplete goods that require time to dry, seal, bond, or ferment before they are ready to be
packaged and sold. And WIP includes raw materials, labor, overhead, and other essentials
needed to complete production. 

3. Maintenance, Repair, and Operating Supplies (MRO)

Items that support production but are not part of the finished product are MRO supplies. For
example, if you’re tracking medical inventory for a company that manufactures continuous
glucose monitors, production might be supported with these MRO supplies:

 Adhesives
 Calibrators
 Computers
 Gloves
 Packing materials
 Safety glasses

4. Finished Goods
Finished goods are completed products that are packaged and ready to be sold.
Tracking Stock and Inventory
As demand for stock grows, or as stock levels decrease, raw materials and MRO supplies must
be available for production.

Inventory
https://en.wikipedia.org/wiki/Inventory
https://www.investopedia.com/terms/i/inventory.asp
https://www.zoho.com/inventory/guides/inventory-definition-meaning-
types.html - very imp
Inventory management is a systematic approach to sourcing,
storing, and selling inventory—both raw materials (components)
and finished goods (products).
In business terms, inventory management means the right stock,
at the right levels, in the right place, at the right time, and at the
right cost as well as price.
https://www.netsuite.com/portal/resource/articles/inventory-
management/inventory.shtml - imp

If there’s one thing that is true for inventory, it’s that it moves across a lot of channels before it
gets to the consumer. To run your business cost-effectively, it’s important to understand the four
different types of commonly used inventory and the stages they move through.

What are the 4 types of inventory? 

The four types of inventory most commonly used are Raw Materials, Work-In-Progress (WIP),
Finished Goods, and Maintenance, Repair, and Overhaul (MRO). When you know the type of
inventory you have, you can make better financial decisions for your supply chain. That includes
choosing the best inventory management software to keep track of all that inventory.

 Raw Materials
Materials that are needed to turn your inventory into a finished product are raw materials. For
example, leather to make belts for your company would fall under this category. Or if you sell
artificial flowers for your interior design business, the cotton used would be considered raw
materials.

2. Work-In-Progress
Inventory that is being worked on is Work-In-Progress (WIP), just like the name sounds. From a
cost perspective, WIP includes raw materials, labor, and overhead costs. Think of the inventory
under this category as being a part of the bigger end-product picture. If you sell medical
equipment, the packaging would be considered WIP. That’s because the medicine cannot be sold
to the consumer until it is stored in proper packaging. It’s literally a work-in-progress.

3. Finished Goods
Maybe the most straight-forward of all inventory types is finished goods inventory. That
inventory you have listed for sale on your website? Those are finished goods. Any product that is
ready to be sold to your customers falls under this category.

4. Overhaul / MRO
Also known as Maintenance, Repair, and Operating Supplies, MRO inventory is all about the
small details. It is inventory that is required to assemble and sell the finished product but is not
built into the product itself. For example, gloves to handle the packaging of a product would be
considered MRO. Basic office supplies such as pens, highlighters, and paper would also be in
this category.

Depending on the specifics of your business, this inventory might be in storage, at a supplier, or
in transit out for delivery.