Dela Cruz, Romar C.

BSTM 2-3N
Business Finance

Synopsis and Reactions

Link 1:
What is the 'time value of money?

The time value of money or TMV clarified that you could bring in a profit and get
more prominent cash in the event that you put resources into now instead of later or as
such, this is the possibility that cash that is accessible right now is worth more than a
similar sum later on, because of its latent capacity procuring limit. It is the guideline of
the estimation of cash that was being contributed throughout some stretch of time with a
particular loan cost, which can be acquired after the maturity date expires, it is
additionally utilized to direct the investors looking at another choices of investments
offered by which gets a better yield.

In more straightforward terms, it is protected to state that a peso was worth more
yesterday than today and a peso today is worth in excess of a peso tomorrow.

As a student the time value of money is important because it allows us students

to make a more informed decision about what to do with our money Also, it can help us
to understand which option may be best, based on interest, inflation, risk and return. It
can also be used to help us understand how much money to save in an account if we
have a certain goal in mind.
Link 2:
Time value of money | Interest and debt | Finance & Capital Markets | Khan
Academy

Time value of money is defines as a concept which states that purchasing power
of money differs with the passage of time. How you are going to give and to receive the
money is also matters, which are why we need to consider always the future and the
present value of money’s.

This video examines the contrast between present value and future value of
money. The idea called the "time value of money" accepts that people face either an
expansion in costs in the economy over the long haul as a inflation rate, for example, a
4% yearly inflation rate, or an occasion to place their reserve funds in a venture account
offering a loan fee, for example, 5% every year. Thusly, under the "time value of money"
idea, you can see that 1,000 pesos that you can get in a long time from today doesn't
have a similar incentive as 1000 pesos today. Truth be told, it will have a lesser worth
today. Similarly, on the off chance that you get 1,000 pesos today and have the
occasion to place this cash in a venture account procuring 5% every year, in two years
you will have more than 1,000 pesos.

The value of a given amount of money is generally greater the earlier it is

received, the earlier you start saving, the more quickly your money can earn interest
and grow.

Link 3:
“Financial Statement Analysis”

Financial statement analysis includes picking up a comprehension of an

association's monetary circumstance by auditing its monetary reports. The outcomes
can be utilized to settle on venture and loaning choices. This audit includes
distinguishing the accompanying things for an organization's financial statements.
There are number of users of financial statement analysis, first is creditors, followed by
investors, and management. Creditors are any individual who has loaned assets to an
organization is keen on its capacity to repay the obligation, and so will focus on various
cash flow measures. Investors, both current and prospective investors look at fiscal
reports to find out about an organization's capacity to keep giving profits, or to create
income, or to keep developing at its recorded rate. Management, The organization
regulator prepares a continuous examination of the organization's monetary outcomes,
especially comparable to various operational measurements that are not seen by
outside entities.

There is this so called financial statement analysis technique; these techniques

are horizontal and vertical analysis, and ratio. Horizontal analysis is the correlation of
monetary data over a progression of revealing periods, while vertical analysis is the
relative examination of a budget report, where each detail on a financial statement is
recorded as a level or percentage of another item. Ratios are utilized to ascertain the
general size of one number corresponding to another. After a ratio is determined, you
would then be able to contrast it with a similar ratio determined for an prior period, or
that depends on an industry average, to check whether the organization is acting as per
desires.

Link 4:
CFA Level 1 Financial Reporting and Analysis Reading 21 LO1 and LO2

Financial reporting alludes to standard practices to give stakeholders a precise

portrayal of an organization's accounts, including their revenues, costs, benefits, capital,
and cash flow, as formal records that give inside and out bits of knowledge into financial
information. The 3 common types of financial reporting is also discussed in the video,
The income statement, Balance sheet, and last is Cash Flow Statement. Income
statement tells you how much money a company made (or lost) in a given time period
(typically a fiscal year). It does so by showing you revenues earned and expenses paid,
with the ultimate goal of showing a company’s profit numbers. Balance sheet, This
piece of financial reporting software offers a snapshot of your assets and liabilities
(debts) at a given moment in time. It’s definitely possible to fall into bother with your
profitability and cash flow situations while having a healthy balance sheet and this report
will help you dig deeper, assisting your strategic decision-making. And last is cash flow
statement, this report shows how much money flowed into and out of your business in a
period of time. The cash flow statement is crucial for things like making sure you have
enough money to make payroll.
As a finance student, Like it or not, financial reporting will be around as long as
businesses are making, and indeed, spending money. For the basic explanation that
administrations will always gather taxes from businesses. Taxes are one of the few
certainties in life – and one of the primary reasons for financial reporting. This is where
the importance of financial statements comes into play for investors. This also applies to
credit vendors and banks who are considering lending money to a company.