An inside director is a director of a company who is also an employee, officer, or major shareholder of that company. An inside director generally has access to confidential information about the company that is not available to outside directors. The term “inside director” is used in contrast to “outside director.” An outside director is … Read more
Cash flow is the movement of money into or out of a business. It is usually measured during a specific period of time, such as a month, quarter, or year. Cash flow can be positive or negative, depending on whether the cash flow is into or out of the business. A business needs cash to … Read more
A control stock is a class of shares in a corporation that gives the holder a controlling interest in the corporation. Control stocks typically have special voting rights that allow the holder to elect a majority of the board of directors or to otherwise control the corporation. Control stocks are often issued to founding shareholders, … Read more
A budget manual is a document that contains the policies and procedures for preparing, submitting, and managing a company’s budget. It is a tool that can be used by both managers and staff to ensure that the budgeting process is conducted in a consistent and efficient manner. What are the components of budget manual? The … Read more
A privately owned company is a company that is not owned by the government or by the public. Privately owned companies may be owned by individuals, by families, or by other private companies. Privately owned companies are usually smaller than publicly owned companies. Who owns privately owned companies? There are two types of privately owned … Read more
The distress cost is the expected cost to a firm of bankruptcy, including the costs of reorganization, liquidation, and other ancillary costs. The distress cost is typically estimated as a function of the firm’s assets, liabilities, and other characteristics. The distress cost is an important consideration in corporate finance because it can have a significant … Read more
A company’s trading assets are the resources that it uses to generate revenue through its core business activities. These assets may include inventory, accounts receivable, and other short-term assets. The term is typically used in the context of companies that engage in international trade. How many types of assets are there explain? There are two … Read more
An audit committee is a group of people within a company who are responsible for ensuring that the company’s financial statements are accurate and transparent. The audit committee is typically made up of members of the board of directors, and its role is to oversee the work of the company’s auditors. Why is audit important? … Read more
Unbundling is the process of separating a company’s products and services into distinct, independent units that can be bought and sold separately. The term is most commonly used in the context of corporate divestitures, where a company decides to sell off certain parts of its business in order to focus on its core competencies. Unbundling … Read more
A spinoff is a type of corporate restructuring in which a company separates itself into two independent companies. A spinoff is typically done to unlock value for shareholders or to focus on two different business segments. There are several reasons why a company might create a spinoff, including to: – divest itself of a non-core … Read more
