A Final Look Back
This is my 24th blog post, after two whole semesters of conducting an independent seminar/research on finance and entrepreneurship. This semester has definitely gone smoother than the last one has, and I am incredibly thankful for what these two semesters have taught me. Continue reading
The semester is almost over, and I’m inching closer and closer to graduation. My independent study this semester was so much more better structured than it was last semester, and I think it has been much easier because I put more time into planning out the details of how the course was going to go. However, I am still a little bit behind the schedule, because I did not expect the courses to be double the workload they were the last semester. This is only to say that I am behind on the blog posts, because it is insanely difficult to squeeze over two hours of online lectures into one page of a blog post. The learning is very much on track. Continue reading
Last week, I introduced you guys to the idea of Earnings Management, and showed you a very basic example of it. This week, as I promised, I’ll discuss the Motives, Means and Opportunity of Earnings Management.
Ratio Analysis is a very self explanatory subject, as it is really just analyzing situations using different kinds of ratios. Ratios are very handy when assessing risk, liquidity, and profitability, because they can be used to accentuate competitive advantages and warn for potential trouble. Continue reading
Operating, Investing, and Financing Cash Flows
This week, my study was mainly based on what cash flow statements are and what they consist of. The format of the Statement of Cash Flows is as follows: Net cash from operating activities + net cash from investing activities + net cash from financing activities = Net change in cash balance. On a cash flow statement, non-cash transactions are listed on the bottom below the cash transactions, and interest and taxes paid in cash also have to be recorded on the cash flow statements.
The Balance Sheet Equation
There is one basic underlying grammar rule in writing a balance sheet, and that is the balance sheet equation. The balance sheet equation goes: Assets = Liabilities + Stockholder’s Equity. This means that the resources of a company is represented by the claim of resources by the owners of the companies and the outsiders. An apt example of this is housing mortgages. If I pay a part of the price of the house and leave a percentage of it as mortgage, the price that I paid becomes my, the owner’s, claim of the property, which is the house in this case, and the mortgage is the outsider’s claim of the resources.
Last semester, due to the heavy workload that every first semester senior goes through, my independent seminar digressed a little bit from the mathematical fields of business. Therefore, this semester I decided to focus on something much more math-related in the field of business, and I picked financial accounting as the starting point of the study. Continue reading
I was originally going to use this blog post as a reflection of the semester, but I remembered that there was a separate blog post just for that, so I’m going to talk about the different types of stocks in the stock market, like I said I would in the previous post.
Finance is a game about future after all. It is more important to know how a company will do next year than how it is doing now. How do we proceed in forecasting a company’s future performance? What kind of a perspective should we stand from in a forecast? Today we will talk about the general idea of financial forecasting before we delve into the details of doing it.