finance essay

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What Is Finance? Essay Example

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Finance can have many specific definitions depending on perspective. For example, personal finance addresses the business decisions and economic situations of individuals. In an economic and business sense, however, finance refers to an economic science that emphasizes successful performance in business. In traditional economic terminology, a successful business means turning a profit and maximizing the funds of a business. Funds can be defined itself in many different ways, and can include anything from currency to stocks. The goal of finance and the study of finance are to thus make a business as profitable as possible. Finance attempts to use economic strategies and various means that are made possible through the economy and legal system to realize this goal. In the following paper, we shall present a summary of some of the key areas of finance, with the aim of providing an introductory account of this important area of economic theory and practice.

Businesses generally have the aim of achieving maximum wealth. As Groppelli and Nikbakht suggest, “no one really knows when maximum wealth is achieved, though it is assumed to be the ultimate goal of every firm.” (4) In other words, for finance it is not important to have a definition of maximum or any limits. Finance is not concerned with any ethical questions, but is rather merely concerned with the production of wealth. But what is finance’s definition of wealth? Wealth in financial terms can be understood as how much money a company or business is worth. This worth can be calculated by figuring out how many assets a company may have, which can include the value of its properties, how much money it has in its reserves, the value of its labor power etc., For finance, one of the key means to determine wealth is to look at the value of the firm’s stocks. Stocks on the stock market indicate how much a firm is valued by the financial community. For example, a company with high prices on their stocks is viewed as a successful firm. For this reason, finance can be understood as the utilization of strategies with the intent to determine how the stock value of a company can be maximized.

Current stock prices, however, are not the only indicator of the value of a company. A crucial part of the stock exchange and financial process is to look at future trends, in order to determine the future value of a stock, and thus how viable a given company may be: “stock prices capture very quickly all available information as well as the outlook for future changes in the wealth of the firm.” (Gropelli & Nikbakht, 4) In other words, to maximize wealth one must also have an eye to future performance of a given company and stock. Finance is therefore not only concerned with present situations, but must also anticipate subsequent changes that can affect wealth.

Yet finance is not only confined to the fierce arena of the stock exchange. Finance, as Erik Banks notes, is much more extensive: “The penetration of finance is so thorough that we needn’t look far to see its impact: consider that on any given day many of us are likely to be aware of economic growth, unemployment and inflation estimates….a financial transaction occurs every time we place savings into a deposit account, or…makes  a purchase with a credit card.” (4) Accordingly, finance can be understood as a giant network of interrelated economic acts, concepts and principles that happen on a daily basis, both on major and minor scales. But what differentiates finance from economics? As stated, finance tries to understand this network in order to maximize wealth. Therefore, finance studies all these details to determine how to best create profit.

This is where some of the key concepts that are a part of financial analysis come into play. Finance has to create profit, and according to Banks, this is done in three major ways: “investing, speculating, or restructuring.” (7) Investment is not only the investment in a stock exchange. Investment means what kind of resources a given company will have. For example, a company can maximize wealth through production, such as producing certain goods, commodities or services. In the production process, therefore, many investments are made, as companies must decide on resources such as “plant and equipment, technology, intellectual property, human resources, and financial assets.” (7) For example, a company invests in its workers, paying them a salary to produce goods: for the company to be successful financially, they must have a good team of workers. Furthermore, a company has to invest in material. For example, if a company makes hamburgers it has to invest in meat for the hamburgers: this can mean having a contract with, for example, a specific farm to supply the company with meat, or a company may buy its own farming facilities. Investment considers all these factors “in order to create more value.” (Banks, 7) Therefore, it looks for the best deals to make sure that maximum wealth is generated.

Speculating, according to Banks, is another key aspect of finance. Speculating generally differs from investing, as it is not related to the direct production of goods. So for example, buying meat for a hamburger company is not part of speculation in finance, but investing; speculation for this same company would mean “purchase or sale of securities, financial contracts, or select physical assets.” (7) Speculating is another way for a company to maximize wealth that is outside of the primary production goals of the company. Speculation is therefore by definition a risky aspect of financial calculation, as these are exterior ways of making money that are often hazardous.

Restructuring refers to changing the basic business operation of the company. For example, a company may decide that the maximization of wealth is best achieved through merging with another company. This restructuring looks at ways to make the business more efficient with the aim of generating a greater profit through expanding revenue or lowering the general cost of production.

Financial decisions can also be analyzed in terms of macro factors and micro factors. Macro factors refer to the broad economic picture outside of a company’s jurisdiction. For example, the state of a country’s economy can affect how the company does business. In a bad economy, a business will have to adjust accordingly to remain afloat. Micro decisions refer to financial decisions that are internal to the company itself, such as laying off workers. While the micro and the macro levels can be sometimes interrelated, they are generally considered as separate in financial theory.

Accordingly, finance is “keenly focused on risk.” (Banks, 10) Since finance is constituted by many different decision making processes in many different arenas, there is always a calculated hazard in financial analysis. One cannot know, for example, if a national economy will suddenly implode: this will be a macro factor that affects a given business. In this regard, the best type of financial analysis must take into account all these various factors, and attempt to minimize risk and maximize profit. This is where the true art of the science of finance emerges.

In essence, finance is a complicated form of economic theory because it has to deal with many factors in its analysis, while at the same time the present business and economic world is very dynamic. While the goal of finance remains consistent – that of maximizing wealth – there are many ways to either accomplish or fail at this goal. A general understanding of the basic principles of finance can nevertheless aid one in making correct decisions.

Works Cited

Banks, Erik. Finance: The Basics . New York: Taylor & Francis, 2010.

Groppelli, Angelico A. and Nikbakht, Ehsan. Finance . New York: Barron’s Educational Series, 2006.

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How to Write a Finance Essay

The primary thing you need to do when you learn how to write a finance essay is to be sure you understand the different financial theory and practices. Finance is an area that might be divided into 3 different parts like the public, corporate & personal finance. More so, every sub-category has a lot of sides with different methods & explanations when offered by financial experts from various parts of the world. Hence, coming up with a good level of comprehension about finance by simply reading a well written literature is your initial step in learning how to write a finance essay.

The writing method is not different from writing other kinds of essays in the first place, you will find out as you read on. The 3 primary stages of writing the paper are the research stage, this is where you will collect all of the materials needed, the writing phase, this is where you will develop the real essay and the revision phase, wherein all the errors will be checked and corrected & this is where the paper will get its final form.

The research

There are lots of books about financial theory & practices. You need to pick the one that will be of help to your study, but this depends on the topic of your writing. You need to check the bibliography lists, textbooks & notes to come up with an idea of the books you need to look for. You can go over some of the online information that offers books & studies, like https://scholar.google.com.ph/ or  http://books.google.com/ to come up with titles that will be very useful for you to help you in comprehending about the subject that you are about to compose. Nonetheless, you need be ready to visit some of the local library, since some of the online sites are not offering absolute studies about academic content.

More so, there are lots of reliable financial newspapers & magazines that you can also use to give you more information about the essay you are about to compose. Hence, to be able to learn how to write a finance essay, you need to know how to fix your time, so that you will collect all of the bibliographical sources for your essay.  Carefully check all of the tools needed, emphasize some of the essential excerpts you have stumbled upon. This can aid you during the process of essay writing, most especially when you have decided to compose the outline for the essay.

The outline or the abstract will be of help and very much valuable for pupils who are still learning how to write a finance essay , since it has the key points of the conversation and it also gives the audience an idea about the association about the significance of the essay. Since the field of finance is more composite, the writer must have well-organized skills, since it is very important. You need to track every piece of related material with associated details and be sure you fully comprehend it.

The writing stage

After you have fixed all of the materials & outline for the essay, it is about time to start composing the content of the paper. If the lecturer wasn’t able to indicate the format style you need to use, you can either use MLA or Harvard, to be able to make your paper more professional. Pupils who know how to compose a finance essay will focus on the references of the sources, this is to come up with a more reliable and substantial paper.  The primary steps in making an essay must be these:

• The introduction should be well written, just like any other form of essay, there should be a topic that will be tackled, along with some other theories & point of view of the writers, it must be objective with truth, since financial essay is about allowing personal opinions.
• In the body of the paper, you need to explain some points visible in the outline. Give some evidence, quotations & formulations to sustain your proofs. A decorative style of writing is something that you need to prevent, learning the proper way to compose a finance essay is something you need to know how to showcase your objectives in the paper. More so, you also need to have a well detailed diagrams, tables & balances to sustain your conclusions, case studies on the other hand are essential element, it is useful in demonstrating or invalidating some financial theories & formats. The more case studies & illustrations you have, the more substantial your paper will be. You can also present some of your theories in a sequential manner or through relevance.
• The conclusion must not be lengthier than any sentences. You can tell, the main keys of the discussion again & them you can underline or bold some of the significant points of your study about finance. Moreover, discuss how your paper might trigger some more studies in this field, or how particular information can be placed into practice. If you know the proper way to compose a finance essay, you must also know how to respond to some of the inquiries about the matter, since a noble conclusion will not leave any inquiry unanswered.
• The final part of the paper must have a list of references. List down some of the sources you have checked and cited in the paper, giving all the details needed by the format standard you have used. This is best if you wish to prevent some risk of plagiarizing some content.

The revision

After working on the essay, the next step is to do some revision. Regardless of how self-assured you are while working on your essay and no matter how skilled you are, there is always a small probability of overlooking something. More so, there might be typographical errors that must be fixed as soon as possible. This part of composing an essay will not take much of your time; it might be finished just after reading your essay thoroughly. You can also ask some of your classmates or a close friend to read your paper and then say if there are some mistakes that must be changed, or you can also ask a professional proofreader or professional proofreading firm & editing service providers to do this for you.

By doing this, you are actually increasing your chance of getting high remarks. Giving so much attention to every detail of the paper is very essential for someone who knows how to write a good finance essay. After working on all of these things, you can say that you are good at writing a finance essay. Nonetheless, some of you might not be sure about their writing ability or they might not have enough time to do the research. In this matter, our traditional essay writing & dissertation writing pages professionals can help you with this. Our writers are specially trained to work on essays and papers according to your guidelines. You will not worry about the cost, because our rates are very minimal.

Learning How to Write an Essay

Normally, composing an academic paper like an essay plays a vital role in the life of pupils aiming for a career after graduation. The capacity to work on a good essay entails primary aids & appropriate delivery. It is really essential for you to learn the ways to compose an essay to be able to comprehend its purpose, format & structures as well. Preferably, the structure of the paper is normally similar with whatever purpose you may have. If you will follow this guide, the essay writing task will be easier for you. Of course, there are different types of essays that you may be asked to write, which will regulate a particular part of concentration. On the other hand, as soon as the essay subject is selected, the main points of its basis still rests associated through the whole essay writing method.

Starting the essay

The primary step in composing a good essay is to pick a subject for it. In some instances, the topic might be given to you, but no matter what it is, it is essential to appropriately check the posing queries. When you learn the ways to compose an essay, there are few things that must be considered beforehand. Analyzing your subject is important and it must not be underrated. You need to know some keywords like to develop, test, compare & analyze to determine the presence for starting the discussion on the given subject. Moreover, you will be able to know the determination of the essay, which will make sure that the topic will fit into its purpose.

When you have picked your topic, make sure your concepts are well organized. You can fix your concepts on a piece of paper to soberly organize the structure for a positive flow. Also, this can help you in appropriately developing the argument. You need to spend some time in re-checking the original subject or question given to you. This is essential to make sure that you are really answering the question. If a subject has been given to you, the task might not be as hard as it seems. But, you still need to decide on your own and you will be expected to go through a research to establish the argument aim.

Finding a subject

As soon as you have criticized the question, it is about time to start seeking for the subject. The method will necessitate you to look for related sources along with removing associated contents from the sources. While doing this, on the other hand, it is important to keep in mind your purpose all the time. Precisely, your paper is expected to answer the queries backed with sustaining proofs from the sources. Along the way of learning how to compose an essay and researching the subject matter, you need to give appropriate and enticing academic arguments for your readers.

As you collect some proofs, it is also ideal to record some information not just to build the argument, but to also save some time by referencing & bibliography later in the process. The proof will be taken from the sources, like journal, articles, online sites and course materials. The proof will help you find out some key points in literature. As you track all the sources or proof, keep a record of those that sustains your thoughts along with those that shows contradiction to your viewpoint. This means that a strong essay shows off a balance consciousness of all the viewpoints you have. A particular academic writing style will be asked, like the Harvard referencing system, MLA, APA, OSCOLA & Chicago, but usually, lecturers just want their pupil’s writing style in Harvard or APA. But whatever referencing style you may have, you should always be aware of the guidelines about plagiarism.

Planning for the essay composition

While you are in the process of taking the skills in writing, you might have hard time thinking about how and where to start. The key in making sure that an essay is precise and it adheres to a certain pattern is by planning carefully. Planning the paper is close to having a mind map, this will check if the writing is well reasoned, well structured, and well researched. Moreover, you need to take some time to focus on answering the question. Make sure you are well informed in comprehending the question and what it is asking you to do.

Primarily, you are asked to know if the question is open— ended or closed. An open—ended question must be broad enough to allow you to further more clarify your intention for making the introduction precise and short. With a closed question, your response to the question should be referred to and kept within the limits of the question. Then again, you need to check the question a lot of times, explain it to yourself for precision.  It will be helpful as well for you if you will break the question into pieces and make sub-questions. You can ask yourself about what the question is asking for; why it is essential and how will you plan your answers.

Cutting the questions into pieces can help you in identifying some important points or topics that define the overall question. If there is anything else, it will help in clearing your focus going to the research topic to provide your paper with a good structure.  Another way to carefully plan your paper is to underline some of the keywords you have used. These are words that you have picked carefully to help you while doing the research. The keywords will also help you can simplify the purpose of the question. Is the question asking you to analyze or is it asking you to discuss and compare the subject?

At this point of your paper, while you are still clasping all the knowledge about writing the essay, you must consider making a diagram of the paper. This will be your good reference later on in terms of the thought processed & structuring. Of course, composing the argument for the paper must be very clear when it comes to the paragraph flow that leads to a good conclusion.

Composing the paper

Now that you have gone through some steps, it is about time to work on your essay. Your notes will serve as a proof and straightforward guide to writing the paper. When you compose your paper, make sure that it is tailored with high quality and researched with hundred percent legitimacies. Comprehending the proper way to compose your paper positively includes a presentation. You need to make a lasting impression on the reader, more so it is important to edit your work for spelling, grammar and any punctuation errors. When you neglect some mistakes that will lead to lower marks, not to mention totally shattering of your presentation and its value. Even if it is appropriate for you to proofread your own work, you are enticed to get someone else for you to recheck your work. Getting help from someone professional is always safer than going through your own work.

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Finance Essay Examples

Top 5 Finance Essay Examples to Help You Ace Your Next Assignment

16 min read

Published on: May 7, 2023

Last updated on: Jan 31, 2024

Share this article

Many students struggle with writing finance essays due to the technical language and vast topics to cover.

It's easy to feel overwhelmed and unsure of where to start, resulting in poorly written papers that don't meet academic standards.

With the right approach and tools, you can learn the art of finance essay writing and achieve academic success.

In this blog, we'll provide practical examples and expert tips to help you craft winning finance essays.

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The following essays are perfect examples of financial situation essays. Give them a read to get inspiration for your next essay. 

Financial Hardship Essay Examples

Get inspiration for your next financial essay from these examples!

Financial Aid Essay Examples

Financial aid essay for an undergraduate essay

In conclusion, writing a financial essay can seem like a daunting task, but with the right guidance, it can be a rewarding experience. The examples we've provided in this blog post are just a small sample of the many financial essay topics that you can explore. 

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Our finance essay writing service is here to provide you with expert assistance, ensuring your essays are both accurate and well-crafted. And for those seeking a more efficient way to tackle their writing tasks, explore our AI essay writer tool.

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Essay on Finance

Students are often asked to write an essay on Finance in their schools and colleges. And if you’re also looking for the same, we have created 100-word, 250-word, and 500-word essays on the topic.

Let’s take a look…

100 Words Essay on Finance

Understanding finance.

Finance is a field that deals with the study of investments. It involves the dynamics of assets and liabilities over time under conditions of different degrees of uncertainty and risk.

Types of Finance

Finance can be divided into three types: personal, corporate, and public/government. Personal finance involves managing individual or family funds. Corporate finance relates to how companies raise and invest capital. Public finance focuses on government revenue and expenditures.

Importance of Finance

Finance is important as it helps individuals and businesses to make use of resources in the best possible way. It assists in achieving financial goals and increases overall economic efficiency.

250 Words Essay on Finance

Introduction to finance.

Finance is a critical field that deals with the allocation of assets and liabilities over time under varying degrees of risk and uncertainty. It is the lifeblood of the global economy, driving decisions in every sector, from households to multinational corporations.

The Importance of Finance

Finance plays a pivotal role in the smooth functioning of an economy. It helps businesses to raise capital, manage resources efficiently, and make informed decisions regarding investments and profit maximization. Moreover, it aids in risk management by enabling the prediction of future financial trends.

Fields of Finance

Finance is a broad discipline that encompasses several fields. Corporate finance focuses on the financial activities of businesses, while personal finance pertains to individuals’ financial management. Public finance, on the other hand, deals with governmental financial affairs.

Finance and Technology

The advent of technology has revolutionized the finance industry. Fintech, a blend of finance and technology, has made financial services more accessible and efficient. It has transformed traditional banking systems, enabling transactions and investments to be executed with just a few clicks.

In conclusion, finance is an essential discipline that underpins economic growth and stability. Its significance extends beyond mere money management, influencing decision-making processes at both individual and corporate levels. The integration of technology in finance has further enhanced its scope, paving the way for a more inclusive and efficient financial system.

500 Words Essay on Finance

Finance, a cornerstone of the business world, is a broad term that encapsulates numerous activities related to money management. It involves the allocation of resources, investment, and risk management, all of which are critical in both personal and corporate contexts. Understanding finance is essential for making informed decisions that affect both short-term and long-term economic stability.

The Fundamental Principles of Finance

Finance operates on several key principles. The first, risk and return, states that higher potential returns often come with increased risk. Investors must balance their desire for profit with their tolerance for risk. The second principle, time value of money, suggests that money’s value decreases over time due to factors such as inflation. Therefore, money invested today is worth more than the same amount in the future.

The third principle, cash flow, is vital for businesses. It reflects the inflow and outflow of money, determining the financial health of a company. Lastly, the principle of diversification encourages the spread of investments across different assets to mitigate risk.

Functions of Finance

Finance serves several functions. In corporate finance, it helps in capital budgeting, where companies decide on investments that yield the highest returns. It also aids in determining a company’s optimal capital structure, balancing debt and equity to minimize financial risk.

In personal finance, it guides individuals in managing their income, savings, and expenditures. It also helps in planning for future needs, such as retirement and education expenses. Moreover, financial knowledge is crucial for investment decisions, enabling individuals to grow their wealth over time.

The Role of Finance in Economic Growth

Finance plays a pivotal role in economic growth by facilitating trade, promoting entrepreneurship, and fostering technological advancements. By providing credit, financial institutions enable businesses to invest in capital, leading to increased productivity and economic expansion. Furthermore, finance aids in the distribution of wealth and resources, contributing to economic stability and social equity.

Challenges in Finance

Despite its importance, finance also poses challenges. Economic fluctuations and market volatility can lead to financial instability. Moreover, the complex nature of financial products and services can lead to information asymmetry, where one party in a transaction has more information than the other, leading to potential exploitation. Additionally, the global nature of finance can amplify economic crises, as seen in the 2008 financial meltdown.

In conclusion, finance is a multifaceted discipline that serves as the lifeblood of the economy. It is both an art and a science, requiring a blend of analytical skills, strategic thinking, and risk management. As we navigate an increasingly complex financial landscape, the importance of finance only continues to grow. Therefore, a solid understanding of financial principles is invaluable for both individuals and businesses alike.

That’s it! I hope the essay helped you.

If you’re looking for more, here are essays on other interesting topics:

• Essay on Where the Mind is Without Fear
• Essay on How to Overcome Fear
• Essay on Fear of Failure

Apart from these, you can look at all the essays by clicking here .

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August 1, 2018

How to Portray Experiences in Your Masters in Finance Essays

Your professional experience probably isn’t all that different from that of other Master’s in Finance (MFin or MSF) applicants. And you worry it won’t stand out. Maybe you feel it’s not interesting or dramatic enough to captivate adcom readers.

DON’T WORRY!

Only you have your experience; in a sense, you are your experience. So, it is inherently unique . That is why your experience should form the core of your essays.

And all of your MFin essays – your personal statements, statements of purpose, and goals essays – should include your actual experience. The more your real experience forms the muscle, bone, and sinew of the essay, the more individual, distinctive, and interesting the essay will be.

Which experiences should you present in your Masters of Finance application?

Different people will present different types of experiences. Follow these tips to choose the best experiences for you:

I often suggest to my clients that, when possible, make the essays, and the experiences portrayed in them, do “double duty,” e.g., a given story might underscore your ability to handle a quantitatively demanding role and simultaneously spotlight your teamwork skills or deftness in managing up or willingness to mentor a less quant-savvy colleague.

Select experiences/stories that show you effectively navigating the organizational arena and interacting effectively; perhaps displaying leadership (formal or informal). In addition, mine senior thesis research projects, club participation roles, volunteer and extracurricular experiences, etc. for experiences that are both relevant and distinctive.

And show that you understand the realities in the finance world and have integrated that knowledge and experience into your toolkit, perspective, and/or goals.

This applies to experienced and inexperienced applicants. Demonstrate your leadership skills, even though it’s not usually explicitly required by MFin adcoms.

Recent experiences reflect the current person who is applying (some people are fast out of the starting gate but don’t have staying power), and they give the adcom a sense of the talents and attributes you will bring to the table.

If you do decide to share an older experience, (a) make sure that you ALSO have a recent one or two, and (b) link it to the present somehow, e.g., show you’re applying a lesson learned, or a quality gained, or insight developed.

MFin applicants come from and are interested in a range of industry segments – and this is fine, so highlight your specific area of expertise!

How should you present experience in your Masters of Finance application?

Imagine sitting at a café (or a bar 😉) and recounting to a colleague or friend an interesting recent experience you had. You don’t cite every detail but rather convey just the details relevant to that particular conversation, and you supplement the facts of the story with brief reflections or elaborations of what you were thinking or feeling at a pivotal moment. You slow down when approaching the turning point. You wrap up with a brief comment or look back (“I learned a lot, but I really hope I never have to go through that again!”).

Well, that is the approach you’ll take in presenting experiences in your essays – simply narrate the story as you’d tell it to someone. Adapted, of course, for length and relevance.

Managing length and relevance in your storytelling

The story of an experience may comprise a whole essay, a paragraph within an essay, or a sentence or two within a paragraph. To incorporate experiences within a goals essay, which I encourage you to do, most likely it will be the last situation. And yes, you can tell a story in one sentence: “After weeks of preparation, a cancelled flight caused our team to miss the presentation in Kuala Lumpur, but to my dejected teammates’ surprise I found telecon resources at the airport and we did the presentation from there!”

The ABCs of narrating a story:

• A ttract the reader’s interest by setting the scene, which includes where, when, what, why, and who (or at least most of these elements).

• B e a storyteller: tell the story as it occurred.

• C onclude the story by relating results, changes, and outcomes that stemmed from the story.

Three additional tips to make your experience as interesting, exciting, meaningful, vivid, and memorable as possible:

• What project specifically, and what makes it “high profile”?

• What complex systems exactly?

• What global client organization? (if you can’t name the client, at least indicate industry)

• What specific outcomes? What was the actual impact?

• What stakeholders exactly – who are they?

• Clarify what’s at stake . The higher the stakes, the better.
• In a story, something changes; the starting point is different than the ending point. Frequently the main character has evolved (sometimes you and sometimes your team, department, and/or organization). Make sure to spotlight this development.

Learn more about applying to Masters in Finance programs by reading these additional MFin-focused posts .

Looking for one-on-one advising to help you through the MFin application process? Check out our Master’s in Finance Admissions Services for more information on how we can help you get ACCEPTED.

Related Resources:

• From Example to Exemplary , free guide to writing outstanding application essays • 4 Pillars of a Splendid Statement of Purpose , a short video • What is an Accomplishment?

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62 Corporate Finance Essay Topic Ideas & Examples

🏆 best corporate finance topic ideas & essay examples, 👍 simple & easy corporate finance essay titles, 🔎 interesting topics to write about corporate finance.

• Starbucks: Corporate Finance Analysis Thus, there is no strict separation between management and the Board of Directors in Starbucks, and Johnson as CEO and the member of the Board of Directors is interested in the company’s growth.
• Corporate Finance Law in Saudi Arabian Insurance Institutions This study will stand on available research to examine the fundamental growth drivers and estimate the prospects that Insurance institutions in Saudi Arabia have under the corporate finance law in terms of the situation of […]
• Southwest Airlines’ Strategic Corporate Finance By revenue, Southwest airlines are the sixth-largest airline in the United States which makes it one of the most profitable airlines in the world.
• Corporate Finance and Investment: Caterpillar, Inc. Caterpillar is in a position to keep the bulk of what it earns from sales, and the more cash it keeps the more it has to fund growth, finance strategic plans and distribute to the […]
• Modern Issues in Corporate Finance Grenadier & Malenko notes “there has been an increase in financial market sophistication leading to a constant change and increase in competition therefore Innovation and the development of new products is a core factor that […]
• International Corporate Finance – Factors of Impact Corporate finance denotes a field of finance that tackles sources of financing, the capital structure of corporations, the instruments and assessment employed in the allotment of monetary resources, and the activities of managers in an […]
• Corporate Finance: Capital Cost, Budgeting, and Structure It is also important to note that the results of the survey showed that firms that pay dividends are more likely to use the NPV and the IRR methods of capital budgeting than those firms […]
• Corporate Finance of Domino’s Pizza Enterprises Still, to reduce the risks, Domino’s Pizza Enterprises follow the risk management policy The capital structure is the combination of the share capital and loan capital which is considered to denote the long term financial […]
• Significance of Inflation to Corporate Finance The argument goes on that with elevated inflation rates, there is always a chance to cut down on interest rates as compared to instances when the inflation rates are low and interest rates need to […]
• Corporate Finance Fundamentals in the UAE: Specifications Analysis To prove the validity of this strategy, we should first discuss the factors which have led to the decline in their profits.
• American Express Inc.: Revision of Corporate Finance According to the Brand Survey conducted by Interbrand, American Express enjoys the 14th Spot in the List of Top 100 Global Brands in 2006 period only goes after citation.
• Strategic Corporate Finance and Its Importance Organizations are operating to raise the value of the share and it should not only consider the internal structure, its product, and competitor, but also the interaction and performance of the organization, and if any […]
• Corporate Finance: Capital Budgeting In this context, it is also seen that the funds that could be invested in the purchase of assets could be either the company’s own funds or loan funds.
• Strategic Corporate Finance in Business Debt financing can be broadly divided into two broad categories according to the type of debt that is being searched for.
• Corporate Finance: Tools, Analysis, Financial Solutions Corporate finance is an area of finance dealing with the financial decisions corporations make and the tools and analysis used to make these decisions.
• Corporate Finance: Business Valuation Methodologies For the most part, the salary approach decides value by computing the net present value of the advantage stream produced by the business; the asset-based methodology decides value by including the total of the parts […]
• Corporate Finance and Business Ownership Types One of the most common types of ownership is a sole proprietorship: a form of ownership where the business is owned by a single individual in its entirety.
• Corporate Finance and Governance of 1980s The article continues to note that the only reason the issue of corporate debts began being addressed was because of the recession.
• Corporate Finance: Weighted Average Cost of Capital Assets’ beta is the average of the different sources of finance that a firm chooses. Fabozzi et al.discuss that the “asset market risk is the weighted average of the company’s debt beta and equity beta […]
• Fundamental Principles of Corporate Finance To finance a project effectively, the company must consider the amount of equity that should be tied up on the project. The principles namely the investment, financing and dividend principles collaborate to influence the value […]
• International Corporate Finance: The Global Financial Environment In the 2007 Annual Report, the Coca-Cola products consumption was noted 44% in the US, 34% in China, India, Japan, Mexico, and Brazil and, finally, 22% in the rest of the world.
• Investment Opportunities, Corporate Finance, and Dividend Payout Policy: Evidence From Emerging Markets
• Structural Models and Endogeneity in Corporate Finance: The Link Between Managerial Ownership and Corporate Performance
• Publication Patterns and Coauthorship in the Journal of Corporate Finance
• Foreign Direct Investment, Corporate Finance, and the Life Cycle of Investment
• Ten Badly Explained Topics in Most Corporate Finance Books
• The Three Main Areas of Corporate Finance
• Dynamic Models and Structural Estimation in Corporate Finance
• Estimating Dynamic Panel Models in Corporate Finance
• Analyzing Research And Application Of Corporate Finance Tools
• Debt Maturity and the Back-To-The-Wall Theory of Corporate Finance
• Capital Tax Reform, Corporate Finance, and Economic Growth and Welfare
• Agency Theory and Its Impact on Corporate Finance Theory
• Financial Crises and Corporate Finance: Causes, Context, and Consequences
• Japanese Corporate Finance: What Factors Affect the Financial Decisions of Japanese Firms?
• Corporate Finance Peculiarities: Comparative Approach in Relation to Developed Countries
• Corporate Finance for Expected Returns and Standard Deviation
• McCallum Graduate School: Corporate Finance and Global Financial Analysis
• Innovation, Firm Size and Corporate Finance: An Initial Inquiry
• Institutional Investors, Monitoring and Corporate Finance Policies
• The Difference Between Project Finance and Corporate Finance
• Optimal Contracting, Corporate Finance, and Valuation With Inalienable Human Capital
• Banking, Corporate Finance, and Monetary Policy: An Empirical Perspective
• Business Taxation, Corporate Finance, and Economic Performance
• Real Options Analysis and the Assumptions of Corporate Finance: A Non-technical Review
• Central and East European Corporate Finance: Between Commonality and Heterogeneity
• Case Solutions for Corporate Finance Ross, Westerfield, and Jaffe 9th Edition
• Off-Balance-Sheet Corporate Finance With Synthetic Leases: Shortcomings and How to Avoid Them With Synthetic Debt
• The Modigliani and Miller Propositions: The History of a Failed Foundation for Corporate Finance
• Market Manipulation and Corporate Finance: A New Perspective
• Bridging the Theory-Practice Gap in Corporate Finance: A Survey of Chief Financial Officers
• The Theory and Practice of Corporate Finance: Evidence From the Field
• Stock Markets, Corporate Finance, and Economic Growth: An Overview
• Credit Expansion, Corporate Finance, and Overinvestment
• Gender and Corporate Finance: Are Male Executives Overconfident Relative to Female Executives?
• Severance Pay and Corporate Finance: Empirical Evidence From a Panel of Austrian and Italian Firms
• Pension Funding, Pension Asset Allocation, and Corporate Finance: Evidence From Individual Company Data
• Private Information and Limitations of Heckman’s Estimator in Banking and Corporate Finance Research
• Investor Sentiment and Corporate Finance: Micro and Macro
• Firms’ Cash Holdings and Performance: Evidence From Japanese Corporate Finance
• Jean Tirole: The Political Economy of Corporate Finance
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What Is Personal Finance?

The importance of personal finance, areas of personal finance, personal finance services, personal finance strategies, personal finance skills, personal finance education.

• What Classes Can't Teach

Breaking Personal Finance Rules

Frequently asked questions, the bottom line.

• Personal Finance

What Is Personal Finance, and Why Is It Important?

Investopedia / Sydney Saporito

Personal finance is a term that covers managing your money as well as saving and investing. It encompasses budgeting, banking, insurance, mortgages, investments, and retirement, tax, and estate planning. The term often refers to the entire industry that provides financial services to individuals and households and advises them about financial and investment opportunities.

Individual goals and desires—and a plan to fulfill those needs within your financial constraints—also impact how you approach the above items. To make the most of your income and savings, it’s essential to become financially savvy—it will help you distinguish between good and bad advice and make intelligent financial decisions.

Key Takeaways

• Few schools have courses on managing your money, so it is important to learn how through free online articles, courses, blogs, podcasts, or books.
• The core areas of managing personal finance include income, spending, savings, investments, and protection.
• Smart personal finance involves developing strategies that include budgeting, creating an emergency fund, paying off debt, using credit cards wisely, saving for retirement, and much more.
• Being disciplined is important, but it’s also good to know when you shouldn't adhere to the guidelines.

Personal finance is about meeting your personal financial goals. These goals could be anything—having enough for short-term financial needs, planning for retirement, or saving for your child’s college education. It depends on your income, spending, saving, investing, and personal protection (insurance and estate planning).

Not understanding how to manage finances or be financially disciplined has led Americans to accumulate enormous debt. In February 2024, the Federal Reserve Bank reported household debt had increased by $3.4 trillion since December 2019, prior to the recession. In addition, the following balances increased from the third quarter of 2023 to the fourth:

• Credit card balances : Up by $50 billion
• Auto loans : Up by $12 billion
• Consumer loans and store cards : Up by $25 billion
• Total non-housing : Up by $89 billion
• Mortgages : Up by $112 billion

Student loans remained unchanged, at about $1.6 trillion.

Americans are taking on an ever-increasing amount of debt to finance purchases, making managing personal finances more critical than ever, especially when inflation is eating away at purchasing power and prices are rising.

The five areas of personal finance are income, saving, spending, investing, and protection.

Income is the starting point of personal finance. It is the entire amount of cash inflow that you receive and can allocate to expenses, savings, investments, and protection. Income is all the money you bring in. This includes salaries, wages, dividends, and other sources of cash inflow.

Spending is an outflow of cash and typically where the bulk of income goes. Spending is whatever an individual uses their income to buy. This includes rent, mortgage, groceries, hobbies, eating out, home furnishings, home repairs, travel, and entertainment.

Being able to manage spending is a critical aspect of personal finance. Individuals must ensure their spending is less than their income; otherwise, they won't have enough money to cover their expenses or will fall into debt. Debt can be devastating financially, particularly with the high-interest rates credit cards charge.

Savings is the income left over after spending. Everyone should aim to have savings to cover large expenses or emergencies. However, this means not using all your income, which can be difficult. Regardless of the difficulty, everyone should strive to have at least a portion of savings to meet any fluctuations in income and spending—somewhere between three and 12 months of expenses.

Beyond that, cash idling in a savings account becomes wasteful because it loses purchasing power to inflation over time. Instead, cash not tied up in an emergency or spending account should be placed in something that will help it maintain its value or grow, such as investments.

Investing involves purchasing assets, usually stocks and bonds, to earn a return on the money invested. Investing aims to increase an individual's wealth beyond the amount they invested. Investing does come with risks, as not all assets appreciate and can incur a loss.

Investing can be difficult for those unfamiliar with it—it helps to dedicate some time to gain an understanding through readings and studying. If you don't have time, you might benefit from hiring a professional to help you invest your money.

Protection refers to the methods people take to protect themselves from unexpected events, such as illnesses or accidents, and as a means to preserve wealth. Protection includes life and health insurance and estate and retirement planning.

Several financial planning services fall under one or more of the five areas. You're likely to find many businesses that provide these services to clients to help them plan and manage their finances. These services include:

• Wealth Management
• Loans and Debt
• Risk Management
• Estate Planning
• Investments
• Credit Cards
• Home and Mortgage

The sooner you start financial planning , the better, but it’s never too late to create financial goals to give yourself and your family financial security and freedom. Here are the best practices and tips for personal finance.

The 2022 Investopedia Financial Literacy Survey surveyed 4,000 adults and found that most Americans are concerned about personal finance basics, retirement funding, and investing in crypto.

1. Know Your income

It's all for nothing if you don't know how much you bring home after taxes and withholding. So before deciding anything, ensure you know exactly how much take-home pay you receive.

2. Devise a Budget

A budget is essential to living within your means and saving enough to meet your long-term goals. The 50/30/20 budgeting method offers a great framework. It breaks down like this:

• Fifty percent of your take-home pay or net income (after taxes) goes toward living essentials, such as rent, utilities , groceries, and transport.
• Thirty percent is allocated to discretionary expenses, such as dining out and shopping for clothes. Giving to charity can go here as well.
• Twenty percent goes toward the future—paying down debt and saving for retirement and emergencies.

It’s never been easier to manage money, thanks to a growing number of smartphone personal budgeting apps that put day-to-day finances in the palm of your hand. Here are just two examples:

• YNAB (an acronym for You Need a Budget) helps you track and adjust your spending to control every dollar you spend.
• Mint streamlines cash flow, budgets, credit cards, bills, and investment tracking from one place. It automatically updates and categorizes your financial data as information comes in, so you always know where you stand financially. The app will even dish out custom tips and advice.

3. Pay Yourself First

It’s important to “pay yourself first” to ensure money is set aside for unexpected expenses, such as medical bills, a significant car repair, day-to-day expenses if you get laid off, and more. The ideal safety net is three to 12 months of living expenses.

Financial experts generally recommend putting away 20% of each paycheck every month. Once you’ve filled up your emergency fund , don’t stop. Continue funneling the monthly 20% toward other financial goals, such as a retirement fund or a down payment on a home .

4. Limit and Reduce Debt

It sounds simple enough: Don't spend more than you earn to keep debt from getting out of hand. But, of course, most people have to borrow from time to time, and sometimes going into debt can be advantageous—for example, if it leads to acquiring an asset . Taking out a mortgage to buy a house might be one such case. Still, leasing sometimes can be more economical than buying outright, whether renting a property, leasing a car, or even getting a subscription to computer software.

On the other hand, minimizing repayments (to interest only, for instance) can free up income to invest elsewhere or put into retirement savings while you’re young when your nest egg gets the maximum benefit from compounding interest . Some private and federal student loans are even eligible for a rate reduction if the borrower enrolls in auto pay.

Student loans account for $1.59 trillion of consumer debt—if you have an outstanding student loan, you should prioritize it. There are myriad loan repayment plans and payment reduction strategies available. If you’re stuck with a high interest rate, paying off the principal faster can make sense.

Flexible federal repayment programs worth checking out include:

• Graduated repayment—progressively increases the monthly payment over 10 years
• Extended repayment—stretches out the loan over a period that can be as long as 25 years
• Income-driven repayment—limits payments to 10% to 15% of your income (based on your income and family size)

5. Only Borrow What You Can Repay

Credit cards can be major debt traps, but it’s unrealistic not to own any in the contemporary world. Furthermore, they have applications beyond buying things. They are crucial to establishing your credit rating and a great way to track spending, which can be a considerable budgeting aid.

Credit needs to be managed correctly , meaning you should pay off your entire balance every month or keep your credit utilization ratio at a minimum (that is, keep your account balances below 30% of your total available credit).

Given the extraordinary reward and incentives offered these days (such as cashback), it makes sense to charge as many purchases as possible—if you can pay your bills in full.

Avoid maxing out credit cards at all costs, and always pay bills on time. One of the fastest ways to ruin your credit score is to constantly pay bills late—or even worse, miss payments.

Using a debit card , which takes money directly from your bank account, is another way to ensure that you will not be paying for accumulated small purchases over an extended period with interest.

6. Monitor Your Credit Score

Credit cards are the primary vehicle through which your credit score is built and maintained, so watching credit spending goes hand in hand with monitoring your credit score. If you ever want to obtain a lease, mortgage, or any other type of financing, then you’ll need a solid credit report . There are a variety of credit scores available, but the most popular one is the FICO score .

Factors that determine your FICO score include:

• Payment history (35%)
• Amounts owed (30%)
• Length of credit history (15%)
• Credit mix (10%)
• New credit (10%)

FICO scores are calculated from 300 to 850. Here’s how your credit is rated:

• Exceptional: 800 to 850
• Very good: 740 to 799
• Good: 670 to 739
• Fair: 580 to 669
• Poor: 579 and below

To pay bills, set up direct debiting where possible (so you never miss a payment) and subscribe to reporting agencies that provide regular credit score updates. In addition, you can detect and address mistakes or fraudulent activity by monitoring your credit report. Federal law allows you to obtain free credit reports once a year from the “Big Three” major credit bureaus : Equifax, Experian, and TransUnion.

Reports can be obtained directly from each agency, or you can sign up at AnnualCreditReport.com, a federally authorized site sponsored by the Big Three.

Some credit card providers, such as Capital One, will provide customers with complimentary, regular credit score updates, but it may not be your FICO score. Instead, Capital One's CreditWise program offers your VantageScore .

Due to the COVID-19 pandemic, the three major credit bureaus are providing free credit reports weekly. The program was extended twice in 2022 and it is now permanent.

7. Plan for Your Future

To protect the assets in your estate and ensure that your wishes are followed when you die, be sure you make a will and—depending on your needs—possibly set up one or more trusts . You also should look into insurance and find ways to reduce your premiums, if possible: auto , home , life , disability , and long-term care (LTC) . Periodically review your policy to ensure it meets your family’s needs through life’s major milestones.

Other critical documents include a living will and a healthcare power of attorney . While not all of these documents directly affect you, all of them can save your next of kin considerable time and expense when you fall ill or become otherwise incapacitated.

Retirement may seem like a lifetime away, but it arrives much sooner than expected. Experts suggest that most people will need about 80% of their current salary in retirement. The younger you start, the more you benefit from what advisors call the magic of compounding interest—how small amounts grow over time.

Setting aside money now for your retirement not only allows it to grow over the long term but also can reduce your current income taxes if funds are placed in a tax-advantaged plan, such as an individual retirement account (IRA) , a 401(k) , or a 403(b) .

While your children are young, take the time to teach them about the value of money and how to save, invest, and spend wisely.

If your employer offers a 401(k) or 403(b) plan , start paying into it immediately, especially if your employer matches your contribution. By not doing so, you’re giving up free money. Take time to learn the difference between a Roth 401(k) and a traditional 401(k) if your company offers both.

Investing is only one part of planning for retirement. Other strategies include waiting as long as possible before opting to receive Social Security benefits (which is smart for most people) and converting a term life insurance policy to permanent life .

8. Buy Insurance

As you age, it's natural for you to accumulate many of the same things your parents did—a family, home or apartment, belongings, and health issues. Insurance can be expensive if you wait too long to get it. Health care, long-term care insurance, life insurance; it all increases in cost the older you get. Additionally, you never know what life will send your way. If you're the sole breadwinner for the family, or you and your partner both work to make ends meet, a lot depends on your ability to work.

Insurance can cover most of the hospital bills as you age, leaving your hard-earned savings in your family's hands; medical expenses are one of the leading reasons for debt. If something happens to you, life insurance can give those you leave behind a buffer zone to deal with the loss and get back on their feet financially.

9. Maximize Tax Breaks

Due to an overly complex tax code , many people leave hundreds or even thousands of dollars sitting on the table every year. By maximizing your tax savings, you’ll free up money that can be invested in your reduction of past debts, enjoyment of the present, and plans for the future.

You should start saving receipts and tracking expenditures for all possible tax deductions and tax credits . Many office supply stores sell helpful “tax organizers” that have the main categories already labeled.

After you’re organized, you’ll want to focus on taking advantage of every tax deduction and credit available, as well as deciding between the two when necessary. In short, a tax deduction reduces the amount of income on which you are taxed, whereas a tax credit reduces the amount of tax that you owe. This means that a $1,000 tax credit will save you much more than a $1,000 deduction.

10. Give Yourself a Break

Budgeting and planning can seem full of deprivations. Make sure you reward yourself now and then. Whether it’s a vacation, a purchase, or an occasional night on the town, you need to enjoy the fruits of your labor. Doing so gives you a taste of the financial independence you’re working so hard for.

Last but not least, don’t forget to delegate when needed. Even though you might be competent enough to do your own taxes or manage a portfolio of individual stocks, it doesn’t mean you should. Setting up an account at a brokerage and spending a few hundred dollars on a certified public accountant (CPA) or a financial planner —at least once—might be a good way to jump-start your planning.

The key to getting your finances on the right track is using skills you likely already have. It’s also about understanding that the principles that contribute to success in business and your career work just as well in personal money management. Three key skills are finance prioritization, assessing the costs and benefits, and restraining your spending.

• Finance Prioritization : This means that you can look at your finances, discern what keeps the money flowing in, and make sure that you stay focused on those efforts.
• Assessing the Costs and Benefits : This key skill keeps professionals from spreading themselves too thin. Ambitious individuals always have a list of ideas about other ways that they can hit it big, whether it is a side business or an investment idea. While there is a place and time for taking a flier, running your finances like a business means stepping back and honestly assessing the potential costs and benefits of any new venture.
• Restraining Your Spending : This is the final big-picture skill of successful business management that must be applied to personal finances. Time and again, financial planners sit down with successful people who still manage to spend more than they make. Earning $250,000 a year won’t do you much good if you spend $275,000 annually. Learning to restrain spending on non-wealth-building assets until after you’ve met your monthly savings or debt reduction goals is crucial in building net worth .

Personal money management isn't one of the most popular topics in educational systems. Many college degrees require some financial education, but it isn't geared toward individuals, which means that most of us will need to get our personal finance education from our parents (if we’re lucky) or learn it ourselves.

Fortunately, you don’t have to spend much money to find out how to manage it better. You can learn everything you need to know for free online and in library books. Almost all media publications regularly dole out personal finance advice, too.

Online Blogs

Reading personal finance blogs is a great way to start learning about personal finance. Instead of the general advice you’ll get in personal finance articles, you’ll learn exactly which challenges real people face and how they address them.

Mr. Money Mustache has hundreds of posts full of insights on escaping the rat race and retiring early by making unconventional lifestyle choices. CentSai helps you navigate myriad financial decisions via first-person accounts. Million Mile Secrets and The Points Guy each teach you how to travel for a fraction of the retail price using credit card rewards. These sites often link to other blogs, so you’ll discover more sites as you read.

Of course, we can’t help tooting our own horn in this category. Investopedia offers a wealth of free personal finance education. You might start with our special sections on budgeting , buying a home , and planning for retirement —or the thousands of other articles in our personal finance section.

At the Library

You may need to visit your library in person to get a library card if you don’t already have one, but after that, you can check out personal finance audiobooks and e-books online without leaving home. Some of the following best sellers may be available from your local library: I Will Teach You to Be Rich , The Millionaire Next Door, Your Money or Your Life , and Rich Dad Poor Dad . Personal finance classics such as Personal Finance for Dummies , The Total Money Makeover , The Little Book of Common Sense Investing , and Think and Grow Rich are also available as audiobooks.

Free Online Classes

If you enjoy the structure of lessons and quizzes, try one of these free digital personal finance courses:

• Morningstar Investing Classroom offers a place for beginning and experienced investors alike to learn about stocks, funds, bonds, and portfolios. Some of the courses you’ll find include “Stocks Versus Other Investments,” “Methods for Investing in Mutual Funds,” “Determining Your Asset Mix,” and “Introduction to Government Bonds.” Each course takes about 10 minutes and is followed by a quiz to help you make sure that you understood the lesson.
• EdX is an online learning platform created by Harvard University and the Massachusetts Institute of Technology. It offers at least three courses that cover personal finance: 'Personal Finance, Part 1: Investing in Yourself" from Wellesley College, “Personal Finance” from Purdue University, and “Finance for Everyone: Smart Tools for Decision-Making” from the University of Michigan. These courses will teach you how credit works, which types of insurance you might want to carry, how to maximize your retirement savings, how to read your credit report, and what the time value of money is.
• “Planning for a Secure Retirement” is an online course from Purdue University. It’s broken up into 10 main modules, and each has four to six sub-modules on topics such as Social Security, 401(k) and 403(b) plans, and IRAs. You’ll learn about your risk tolerance , think about what kind of retirement lifestyle you want, and estimate your retirement expenses.

Personal finance podcasts are a great way to learn how to manage your money if you’re short on free time. While you’re getting ready in the morning, exercising, driving to work, running errands, or preparing for bed, you can listen to expert advice on becoming more financially secure. In addition to “The Investopedia Express with Caleb Silver,” you may find these valuable:

• Freakonomics Radio and NPR’s Planet Money both make economics enjoyable by using it to explain real-world phenomena such as “how we got from mealy, nasty apples to apples that actually taste delicious,” the Wells Fargo fake-accounts scandal, and whether we should still be using cash.
• American Public Media’s Marketplace helps make sense of what’s happening in the business world and the economy.
• So Money with Farnoosh Torabi combines interviews with successful business people, expert advice, and listeners’ personal finance questions.

The most important thing is to find resources that work for your learning style and that you find interesting and engaging. If one blog, book, course, or podcast is dull or difficult to understand, keep trying until you find something that clicks.

Education shouldn’t stop once you learn the basics. The economy changes, and new financial tools like the budgeting apps mentioned earlier are always being developed. Find resources you enjoy and trust, and keep refining your money skills through retirement and beyond.

What Personal Finance Classes Can’t Teach You

Personal finance education is a great idea for consumers, especially people starting out who want to learn investing basics or about credit management; however, understanding the basic concepts is not a guaranteed path to financial sense. Human nature can often derail the best intentions to achieve a perfect credit score or build a substantial retirement nest egg. These three key character traits can help you stay on track:

One of the most important tenets of personal finance is systematic saving. For example, say your net earnings are $60,000 per year, and your monthly living expenses—housing, food, transportation, and the like—amount to $3,200 per month.

There are choices to make surrounding your remaining $1,800 in monthly salary. Ideally, the first step is to establish an emergency fund or perhaps a tax-advantaged health savings account (HSA) .

To be eligible for a health savings account, your health insurance must be a high-deductible health plan (HDHP) .

Establishing an emergency fund takes financial discipline—without it, giving in to the temptation to spend rather than save can have dire consequences. In the event of an emergency, you may not have the money to pay the expenses—leading you to finance them through debt.

Once you have your emergency stash, you'll need to develop investing discipline—it’s not just for institutional money managers who make their living buying and selling stocks. Average retail investors tend to do better by setting an investment target and abiding by it rather than buying and selling stocks trying to time the market.

A Sense of Timing

Timing can be crucial. For instance, imagine you're three years out of college, have established your emergency fund, and want to reward yourself. A Jet Ski costs $3,000, but you want to start investing also. "Investing in growth stocks can wait another year," you say. "I have plenty of time to launch an investment portfolio."

However, putting off investing for one year can have significant consequences. The opportunity cost of buying a personal watercraft can be illustrated through the time value of money.

The $3,000 used to buy the Jet Ski would have amounted to nearly $49,000 in 40 years at 7% interest, a reasonable average annual return for a growth mutual fund over the long haul. Thus, delaying the decision to invest wisely may likewise delay the ability to reach your goal of retiring at age 65.

Doing tomorrow what you could do today also extends to debt payment. If you were to put the Jet Ski on your credit card, the $3,000 credit card balance would take 222 months (18.5 years) to pay off if you only made minimum payments of $75 each month. And don’t forget the interest you’re paying: at an 18% annual percentage rate (APR) , it comes to $3,923 over those months. So, if you were to plunk down the $3,000 to pay the balance rather than let it compound, you'd see substantial savings—nearly $1,000.

Emotional Detachment

Personal finance matters are business, and business should not be personal. A difficult but necessary facet of sound financial decision-making involves removing emotions from a transaction.

Making impulsive purchases feels good but can significantly impact long-term investment goals. So can making unwise loans to family members. Your cousin Fred, who has already burned your brother and sister, will likely not pay you back, either. The smart thing to do is decline his requests for help—you're trying to make ends meet also.

The key to prudent personal financial management is to separate feelings from reason. However, when loved ones are experiencing real trouble, it pays to help if you can—just try not to take it out of your investments and retirement.

Many people have loved ones who always seem to need financial help—it is difficult to refuse to help them. If you include planning to assist them in real emergencies using your emergency fund, it can make the burden easier.

The personal finance realm may have more guidelines and tips to follow than any other. Although these rules are good to know, everyone has their own circumstances. Here are some rules prudent people, especially young adults, are never supposed to break—but can break if necessary.

Saving or Investing a Set Portion of Your Income

An ideal budget includes saving a portion of your paycheck every month for retirement—usually around 10% to 20%. However, while being fiscally responsible is important and thinking about your future is crucial, the general rule of saving a given amount for retirement may not always be the best choice, especially for young people just getting started.

For one thing, many young adults and students need to consider paying for their biggest expenses, such as a new car, home, or postsecondary education. Taking away 10% to 20% of available funds would be a definite setback in making those purchases.

Additionally, saving for retirement doesn’t make much sense if you have credit cards or interest-bearing loans to pay off. The 19% interest rate on your Visa card probably would negate the returns you get from your balanced mutual fund retirement portfolio five times over.

Finally, saving money to travel and experience new places and cultures can be especially rewarding for a young person who’s still unsure about their life path.

Long-term Investing/Investing in Riskier Assets

The rule of thumb for young investors is that they should have a long-term outlook and stick to a buy-and-hold philosophy. This rule is one of the easier ones to justify breaking. Adapting to changing markets can be the difference between making money or limiting your losses and sitting idly by and watching your hard-earned savings shrink. Short-term investing has its advantages at any age.

Common investing logic suggests that because young investors have such a long investment time horizon, they should be investing in higher-risk ventures; after all, they have the rest of their lives to recover from any losses that they may suffer; however, you don’t have to take on undue risk in your short- to medium-term investments if you don’t want to.

The idea of diversification is an important part of creating a strong investment portfolio; this includes both the riskiness of individual stocks and their intended investment horizon .

At the other end of the age spectrum, investors near and at retirement are encouraged to cut back to the safest investments—even though these may yield less than inflation —to preserve capital . Taking fewer risks is important as the number of years you have to earn money and recover from bad financial times dwindles, but at age 60 or 65, you could have 20, 30, or even more years to go. Some growth investments could still make sense for you .

Personal finance is the knowledge, instruments, and techniques used to manage your finances. When you understand the principles and concepts behind personal finance, you can manage debt, savings, living expenses, and retirement savings.

What Are the 5 Main Components of Personal Finance?

The five main components are income, spending, savings, investing, and protection.

What Is an Example of Personal Finance?

One of the key ideas behind personal finance is not to spend more than you make. For instance, if you make $50,000 a year but spend $65,000, you'll end up with debt that continues to compound because you'll be spending more than you make to pay for past expenses.

Why Is Personal Finance So Important?

The concepts behind managing your personal finances can guide you in making intelligent financial decisions. In addition, the decisions you make throughout your life on what to buy, sell, hold, or own can affect how you live when you can no longer work.

Personal finance is managing your money to cover expenses and save for the future. It is a topic that covers a broad array of areas, including managing expenses and debt, how to save and invest, and how to plan for retirement. In addition, it can include ways to protect yourself with insurance, build wealth , and ensure wealth is passed on to the people you want it to pass to.

Understanding how to manage your finances is an important life-planning tool that can help set you up for a life without debt; you gain control of financial stresses and have a way to manage the expensive surprises that life can throw at you.

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ESSAY SAUCE

FOR STUDENTS : ALL THE INGREDIENTS OF A GOOD ESSAY

Essay: Introduction to finance

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INTRODUCTION TO FINANCE: Finance is the integral part of business. The economic development of any country, depends upon the ‘existence of a well- organized financial system. It is the financial system, which supplies the necessary financial input for the production of goods and services, which in turn promotes the well-being, and standard of people of the country. Finance, and function of finance are the part of the economic activity. Finance is the essential, need for all type of organization viz., small, medium, large-scale industries, and agriculture and service sector. Over the 60 years of independence, the availability of finance, has been made easy through functioning of commercial banks, development banks and primary markets. But all these services and instruments are associated, with different types of costs. Hence, it had become a necessity to make use of such sources not only to recover the cost but also to increase, the wealth of investors. Contrary to this, the new economic reforms created a challenging, environment in the economy. This calls for effective utilization of funds, to yield the pre-determined returns of a firm’s success and its survival, depends upon how efficiently it is able to generate funds, as and when needed. Finance, holds the key to all activities. The Sanskrit says, ‘Arthasachivah’ which means, ‘Finance’ reigns supreme’, speaks volume for the significance of the function, of finance in any organization. According to Paul G. Hassings.., ‘Finance is the management of the monetary, affairs of a company. It includes determining what has to be paid for the money of the best terms available, and devoting the available funds to the best uses’. ‘Finance’ guides and regulates, investment decisions and expenditures. The expenditure decision may pertain, to recurring expenditure or they may be about capital budgeting. To get the best out of the available funds, is major task of finance. The finance manager, has to perform this task most efficiently if he is to be successful. The finance function, does not draw any distinction between the private sector and the public sector. It is important, even indispensable to the both sectors, even the government treats finance as a, signpost to control a measure what it has achieved or propose to achieve. It may be rightly, considered as the sinew of any business activity, and that is how its importance is recognized in any branch of science. Every business activity requires financial support, because financial viability, is the center theme of any business preposition. This point of view is well brought out by Mr. A.L. KINGSHOTT, who states. ‘Finance is the common denominator for a vast range of corporate objectives, and the major part ,of any corporate plan must be expressed in financial terms’. Financial decision, must be viewed in the light of financial viability of its financial outcomes. It is difficult to conceive a policy decision, which does not have financial implications. Moreover, business activities are not mutually exclusive; there dependence on each other, and can be measured only in terms of finance. Any economic transaction, consists of buying and selling, which implies money transactions, but it may not involve immediate payment of money, as there may be credit terms involved. In any transaction therefore, whether it is buying or selling, the payment of money, at present or in future, is involved. FINANCIAL STATEMENTS An organization communicates, its financial information to the users through financial statements and reports. Financial statement contains summarized information of the organizations – financial affairs, organized in a systematic form. These statements comprises of the income statements or profit and loss account and the position statements or the balance sheet. To give a full view of the financial affairs, of the undertaking it is also necessary to include statement of retained earnings, a statement of changes , in the financial position and a few schedules such as schedules of fixed assets, and schedule of debtors. Income Statement: The profit and loss account set out income as well as expenses of the same period and after matching the two, the difference that is net profit or net loss, is shown as the difference between the two sides of the account. Thus, the earning capacity and the potential of the organizations are reflected by its profit and loss account. Balance Sheet: Also known as the position statement, displays all the total resources of a business and the owners, creditors equity in these resources. It indicates the statement of affairs of the business at a particular moment of time and thus, its nature. Profit and Loss Appropriation account: Also known as statement of retained earnings, is generally a part of the profit and loss account. It shows, how the profit of the business for the accounting period is appropriated, towards reserve and dividend and how much of the same is carried forward, as retained earnings Fund Flow Statement: Also known as the statement of changes in financial position, summarizes the changes in the assets, liabilities and owners’ equity between two balance sheet dates. Thus, it is a statement of flows, i.e. it means the changes have been taken in the financial position of the firm of two balance sheet dates. It summarizes the sources, and uses of the funds obtained. FINANCIAL ANALYSIS Financial analysis, is the process of identifying the financial strength and weakness of the firm by properly establishing, relationships between the items of the balance sheet and profit and loss account. The purpose of financial analysis is, to disclose the information available in the financial statements so as to judge the profitability, and financial health of the organization. The first task of the financial analyst is to select the information relevant to the decisions under consideration from the total information available in the financial statement. Secondly, to arrange the information in a way that would highlight the significant relationships. Finally, to interpret and draw inferences, and conclusions. In brief, financial analysis, is the process if selection, relation and evaluation of profitability and financial soundness and health of the organization. TECHNIQUES OF FINANCIAL STATEMENT A financial analyst, analyses the financial statement by selecting the appropriate techniques according to purpose of the analysis. Financial statements may be analyzed by means of any of the following techniques: ‘ Comparative Statement analysis. ‘ Common Size Statement analysis. ‘ Trend analysis. ‘ Ratio analysis. ‘ Fund Flow Statement. ‘ Cash Flow Statement. ‘ Cost Volume Profit analysis. COMPARATIVE ANALYSIS Comparative Analysis means, comparison of two or more comparable alternatives, processes, products, qualifications, sets of data’s, systems, etc. In accounting, for example, changes in a financial statement’s items over, several accounting periods could be presented together to detect the emerging trends in the, firm’s operations and results. Comparative Analysis is performed by professionals, who prepare reports using financial tools and techniques that make use of information taken from financial statements and the other reports. These reports are usually, presented to top management as one of their base in making business decision. These decisions include the following:- ‘ Continue or discontinue in its main operation or part of its business; ‘ Make or purchase certain materials, in the manufacture of its product; ‘ Acquire or rent/lease certain, machineries and equipment in the production of its goods; ‘ Issue stocks or negotiate for a bank loan, to increase its working capital; ‘ Make decisions regarding investing and lending capital; ‘ Other decisions that allow management to make an, informed selection on various alternatives in the conduct of its business. Comparative analysis often assesses the firm’s:- 1. Profitability ‘ Firm’s ability, to earn income and sustain growth in both short-term and long-term. A company’s degree of profitability, is usually based on the income statement, which reports on the company’s results of operations 2. Solvency ‘ Firm’s ability to pay of its obligation to creditors and third parties in the long term. 3. Liquidity – its ability to maintain a positive cash flow, while satisfying immediate obligations. 4. Stability- the firm’s ability is to remain in business in the long run, without having to sustain significant losses, in the conduct of its business. Assessing a company’s stability requires the use of the income statements and the balance sheet, as well as other, financial and non-financial indicators. Methods of Comparative Analysis Comparative analysts often compare on the basis of following things: ‘ Past Performance – Across historical time periods, for the same firm (the last 5 years for example), ‘ Future Performance – Using historical figures and certain, mathematical and statistical techniques, including present and future values, This extrapolation method is the main source, of errors in financial analysis as past statistics can be the poor predictors of future prospects. ‘ Comparative Performance – Comparison between the similar firms. Comparing financial ratios is merely one way of conducting, financial analysis. Financial ratios face several theoretical challenges: ‘ They say little about the firm’s prospects, in an absolute sense. Their insights about, relative performance, require a reference point from other time periods or any similar firms. ‘ One ratio, holds little meaning. As indicators, ratios can be logically interpreted in at least two ways. One can be partially overcome this problem by combining several related ratios, to paint a more comprehensive and exact picture of the firm’s performance. ‘ Seasonal factors, may prevent year-end values from being representative. A ratio’s values may be distorted as the account balances will change from the beginning to the end of an , accounting period. Use average values, for such accounts, whenever it is possible. ‘ Financial ratios, are no more objective than the accounting methods employed. Changes in accounting policies, or choices can yield drastically different ratio values. Financial analysts, can also use percentage analysis which involves reducing a series of the figures as a percentage of some base amounts. For example, a group of items can be expressed, as a percentage of net income. When proportionate changes in the same figure, over a given time period expressed as a percentage is known as horizontal analysis. Vertical or common-size analysis, reduces all items on a statement to a ‘common size’ as a percentage of some base value, which assists in the comparability with other companies of different sizes. As a result, all Income Statement items are divided by Sales, and all the other Balance Sheet items are divided by Total Assets. Another method is, comparative analysis. This provides a better way to determine trends. Comparative analysis, presents the same information for two or more time periods and is, presented side-by-side to allow for easy analysis. BALANCE SHEET BASICS In financial accounting, the balance sheet or statement of financial position is a summary of the financial balances, of a sole proprietorship, a business partnership or a company. Assets, liabilities and ownership equity, are listed as of a specific date, such as to the end of its financial year. A balance sheet is often described as a “snapshot of a company’s financial condition”. The balance sheet is the only statement which applies to a single point at time of a business’ calendar year. Understanding balance sheet, is very important because it gives an idea of the financial strength of a company at any given point of time. The various components of balance sheet are as follows:- ‘ Assets: – Anything tangible or intangible that is capable, of being owned or controlled to produce value and that is, held to have positive economic value is considered as an asset. ‘ Gross block: – The total value of all the assets that a company own’s and value is determined by the amount ,it cost to acquire these assets. It is inclusive of depreciation, that is to be charged on each asset. ‘ Net block: – If the gross block is less accumulated depreciation on assets. Net block is actually what; the asset is worth to the company. ‘ Capital Work-In-Progress: – sometimes, at the end of the financial year, there is some construction or installation going-on in the company. Which is not complete, such installation is recorded in the books as: capital work in progress because it is asset for the business. ‘ Investments: – If the company has made some, investments out of its free cash, it is recorded, under the head investments. ‘ Inventory: -The raw materials, work-in-process goods and completely finished goods that are considered to be the portion of a business assets which are ready or will be ready for sale. ‘ Receivables: – include the debtor’s of the company, i.e., it includes all those accounts which are to give money back to the company. ‘ Other Current Assets: – include all the assets, which can be converted into cash, within a very short period of time like cash in bank etc. ‘ Liabilities:- In financial accounting, a liability is defined as an obligation of an entity, arising from past transactions or events, the settlement of which may result in the transfer or use of assets, provision of services, or other yielding of economic benefits in the future. ‘ Share Capital: – Share capital or issued capital refers to as the portion of a company’s equity that has been obtained by trading stock, to a shareholder for cash or an equivalent item of capital value. Share capital usually comprises the nominal values of all shares issued, and less those repurchased by the company. It includes both ordinary shares and preference shares. If the market value of shares is greater than their nominal value (value at par), the shares are said to be at a premium, which is also called as share premium. ‘ Reserves and surpluses: – Amount appropriated out of earned surplus, retained earnings for future plan or unforeseen expenditure. It includes, the free reserves of the company which are built out of the genuine profits of the company. Together they are known as net worth of the company. ‘ Total debt: – It includes the long term and short debt of the company. Long term is for a longer duration, usually for a period more than 3 years like debentures. Short term debt, is for a lesser duration, usually for less than a year like bank finance for the working capital. ‘ Creditors: – They are those entities to which the company owes’s money. ‘ Other Liabilities and Provisions: – It includes, all the liabilities that do not fall under any of the above head and various provisions made. PROFIT AND LOSS STATEMENT Profit and Loss Statement which is also known as the Income Statement is a company’s financial statement that indicates how the revenue, which is money received from the sale of products and services, before expenses are taken out, also known as the “top line” is transformed into the net income, which is the result after all revenues and expenses have been accounted for, also known as the “bottom line”. It displays, the revenues recognized for a specific period, and the cost and expenses charged against all these revenues, including write-offs (e.g., depreciation and the amortization of various assets) and taxes. The purpose of the income statement is to show manager’s and investors whether the company made or lost money, during the period being reported. Items in Profit & Loss Statement Operating Expenses ‘ Revenue: -Cash inflows, or other enhancements of assets of an entity during a period from delivering, or producing goods, rendering services, or other activities that constitute the entity’s ongoing, major operations. It is usually presented as the sales minus sales discounts, returns, and allowances. ‘ Expenses: – Cash outflows, or other using-up of assets or incurrence of liabilities during a period, from delivering or producing goods, rendering services, or carrying out other activities that constitute, the entity’s ongoing major operations. ‘ General and Administrative Expenses: -Represent expenses, to manage the business; which includes salaries of officers/executives, legal and professional fees, utilities, insurance, depreciation of office building and the equipment, office rents, office supplies, etc.). ‘ Selling Expenses: -It represents, expenses needed to sell products which include salaries of sales people, commissions, and travel expenses, advertising, freight, shipping, depreciation of sales store buildings and equipment, etc. ‘ R & D Expenses: -Investigative activities, that a business chooses to conduct with intention of making a discovery that can either lead to the development of a new products or procedures, or in the improvement of existing products or procedures. ‘ Depreciation/Amortization: -It is the charge, with respect to fixed assets / intangible assets that have been capitalized, on the balance sheet for a specific accounting period. It is a systematic and rational allocation of cost, rather than the recognition of market value decrement. Non-operating Expenses ‘ Other Revenues or Gains: -They are, revenues and gains from other than primary business activities (e.g. rent, income from patents). It also includes unusual gains, that are either unusual or infrequent, but not both (e.g. gain from sale of securities or gain from disposal of fixed assets). ‘ Other expenses or losses: – Expenses or losses which are not related to primary business operations, (e.g. foreign exchange loss). ‘ Finance costs ‘ It is the cost of borrowing from various creditors (e.g. interest expenses, bank charges). ‘ Income tax expense: – It is the sum of the amount payable to tax authorities for the current reporting period (current tax liabilities/ tax payable) and the amount of deferred tax liabilities (or assets). Irregular Items They are reported separately, because this way the user can better predict future cash flows. Irregular items most likely may not appear in next year. These are reported as net of taxes. ‘ Extraordinary items: -They are both, unusual (abnormal) and infrequent, for example, unexpected natural disaster, expropriation, prohibitions, under new regulations. [Note: natural disaster, might not qualify depending on location (e.g. frost damage would not qualify in Canada, but would in the tropics). ‘ Changes in accounting principles: -For example, deciding to depreciate, an investment property that has previously not been depreciated. However, changes in the estimates (e.g. estimated useful life of fixed assets) do not qualify. ‘ Discontinued operations: -These are the most common type of irregular items. Shifting business location, stopping production temporarily, or changes due to technological improvement, do not qualify as discontinued operations. 1.2 SPECIFIC INTRODUCTION RETAIL BACKGROUND OF INDUSTRY The Indian retail industry, is divided into organized and unorganized sectors. Organized retailing, refers to trading activities undertaken by licensed retailers, that is, those who are registered for sales tax, income tax, etc. These include the corporate-backed, hypermarkets and retail chains, and also the privately owned large retail businesses. Unorganized retailing, on the other hand, refers to the traditional formats of the low-cost retailing, for example, the local kirana shops, owner manned general stores, paan/beedi shops, convenience stores, hand-cart and pavement vendors, etc. India’s retail sector is wearing new clothes and with a three-year compounded annual growth rate of 46.64 per cent, retail is the fastest growing sector, in the Indian economy. Traditional markets, are making way for new formats such as departmental stores, hypermarkets, supermarkets and specialist stores. Western-style malls, have begun appearing in metros and second-rung cities alike, introducing the Indian consumer, to annul paralleled shopping experience. The Indian retail sector, is highly fragmented with 97 per cent of its business being run by the unorganized retailers, like the traditional family run stores and corner stores. The organized retail however is at a very nascent stage, though attempts are being made to increase its proportion to 9-10 per cent by the year 2015 bringing in huge opportunities for prospective new players. This sector is the largest source of employment after agriculture, and has deep penetration, into rural India generating more than 10 percent of India’s GDP. The last few years witnessed immense growth by this sector, the key drivers being the Changing consumer profile and demographics, increase in the number of international brands, available in the Indian market, economic implications of the Government increasing urbanization, credit availability, improvement in the infrastructure, increasing investments in technology, and real estate building a world class shopping environment for the consumers. In order to keep pace with the increasing demand, there has been, a hectic activity in terms of entry of international labels, expansion plans, and focus on technology, operations and processes .This has led, to more complex relationships involving suppliers, third party distributors and retailers, which can be dealt, with the help of an efficient supply chain. A proper supply chain will help to meet the competition head-on, manage stock availability; supplier relations, new value-added services, cost cutting and most importantly reduce the wastage levels in fresh produce. Large Indian players: like Reliance Ambani’s, K.Rahejas, Bharti AirTel, ITC and many others are making significant investments, in this sector leading to emergence of big retailers who can bargain with suppliers to reap, economies of scale. Hence, discounting is becoming, an accepted practice. Proper infrastructure is a pre-requisite in retailing, which would help to modernize India and facilitate rapid economic growth. This would ,help in efficient delivery of goods and value-added services to the consumer making a higher, contribution to the GDP. International retailers see India as the last retailing, frontier left as the China’s retail sector is, becoming saturated. However, the Indian Government restrictions on the FDI are creating, ripples among the international players like Walmart, Tesco and many other, retail giants struggling to enter Indian markets. As of now the Government has, allowed only 51 per cent FDI in the sector to ‘one-brand’ shops like Nike, Reebok, etc. However, other international players are taking alternative routes to enter ,the Indian retail market indirectly via strategic licensing agreement, franchisee, agreement and cash and carry wholesale trading (since 100 per cent FDI is allowed, in wholesale trading). RETAIL INDUSTRY India has one of the largest numbers, of retail outlets in the world of the 12 million retail outlets present in the, country, nearly 5 million sell food and related products. Though the market has, been dominated by unorganized players, the entry of domestic and international, organized players is set to change the scenario. Organized retail segment has been ,growing at a blistering pace, exceeding all previous estimates. According to a, study by Deloitte Haskins and Sells, organized retail has increased its share, from 8 percent of total retail sales in 20012 to 10 percent in 2013. The, fastest growing segments have been the wholesale cash and carry stores, (150 percent) followed by supermarkets (100 percent) and hyper markets, (75-80 percent). Further, it estimates the organized segment to account for 25 per cent of the total sales by 2014. India retail industry is the, largest industry in India, with an employment of around 8% and contributing, to over 10% of the country’s GDP. Retail industry in India is expected to rise, 25% yearly being driven by strong income growth, changing lifestyles, and, favorable demographic patterns. It is expected that by, 2016 modern retail industry in India will be worth US$ 200-225 billion. India, retail industry is one of the fastest growing industries with revenue expected, in 2014 to amount US$350 billion and is increasing at a rate of 5% yearly. A ,further increase of 7-8% is expected in the industry of retail in India by growth in ,consumerism in urban areas, rising incomes, and a steep rise in rural consumption. It has further been predicted that the retailing industry in India will, amount to US$ 21.5 billion by 2015 from the current size of US$ 7.5 billion. Shopping, in India has witnessed a revolution with the change in the consumer buying, behavior and the whole format of shopping also altering. Industry, of retail in India which has become modern can be seen from the fact that there, are multi-stored malls, huge shopping centers, and sprawling complexes ,which offer food, shopping, and entertainment al under the same roof. India retail, industry is expanding itself most aggressively; as a result a great demand for, real estate is being created. Indian retailers preferred means of expansion is ,to expand to other regions and to increase the number of their outlets in a city,. India retail industry is progressing well and for this to continue retailers as well, as the Indian government will have to make a combined effort. Retail sector, one, of India’s largest industries, has presently emerged as one of the most dynamic, and fast paced industries of our times with several players entering the market. India is being, seen as a potential goldmine for retail investors from over the world. India, gets 2nd position according to AT Kearney’s annual Global Retail Development, Index (GRDI). India earned $511 billion in the year of 2012 and drawing both, local as well as global players. Organized retail accounts still less than 5% of the, market is expected to grow at CAGR of 40%, from $20 billion in 2007 to $107, billion by 2013 and to $1.3 trillion by 2018, at a CAGR of 10%. India has one, of the largest numbers of retail outlets in the world. One of the 12 million retail, outlets, present in the country, nearly 5 million sell food and related products. Though, the market has been dominated by unorganized player, the entry of domestic, and international organized players is set to change the scenario. As the contemporary, retail sector in India is reflected in sprawling shopping centers, multiplex- malls, and huge complexes offer shopping, entertainment and food all under one roof, the concept of shopping has altered in terms of format and consumer buying behavior, ushering in a revolution in shopping in India. This has also contributed to large, scale investments in real estate sector with major national and global players, investing in developing the infrastructure and construction of the retailing, business. The retailing configuration, in India is fast developing as shopping malls are increasingly becoming familiar, in large cities. When it comes to development of retail space specially the malls, the Tier, II cities are no longer behind in the race. If development plans till 2007 is studied, it shows the projection of 220 shopping malls, with 139 malls in metros and the, remaining 81 in the Tier II cities. The government of states like Delhi and, National Capital Region (NCR) are very upbeat about permitting the use of, land for commercial development thus increasing the availability of land for, retail space; thus making NCR render to 50% of the malls in India. Wal-Mart, the world’s largest retail, chain, recently joined Bharti to operate within India. Some MNC giants already, serving from the past couple of years like SPAR group, Carrefour, Marks &, Spencer, Metro. Local retailers such as Future group, RGP group and Reliance, have all taken an early lead due to their aggressive expansion plans. The outlook for private consumption, has become more negative and customers are becoming more cautious. The retail, sector is concentrated. Indian retail chains are meeting the stiff competition, through increased efficiency, centralizing purchases, forming international, alliances and expanding operations. INDIAN RETAIL INDUSTRY- ITS GROWTH, CHALLENGES AND OPPURTUNITIES. As the contemporary retail, sector in India is reflected in sprawling shopping centers, multiplex- malls, and huge complexes offer shopping, entertainment and food all under one roof, the concept, of shopping has altered in terms of format and consumer buying behavior, ushering, in a revolution in shopping in India. This has also contributed to large- scale, investment in real estate sector with major national and global players investing, in developing the infrastructure and construction of relating business. The trends that are driving the growth of retail sector in India are: ‘ Low share of organized ,retailing ‘ Falling real estate, prices ‘ Increase in disposal, income and customer aspiration ‘ Increase in expenditure, for luxury items Another credible factor in the, prospects of retail sector in India is the increase in the young working, population. In India, hefty pay packets, nuclear families in urban areas, along, with increasing working- women and emerging opportunities in the service sector. These key factors have been the growth drivers of the organized retail, sector in India which now boast of retailing almost all the preferences of, life- Apparel & Accessories, Appliances, Electronics, Cosmetics and Toiletries, Home & Office Products. With this the retail sector in India is witnessing, rejuvenation as traditional markets make way for new formats such as departmental, stores , hypermarkets, supermarkets and specially stores. The retailing, configuration in India is fast developing as shopping malls are increasingly, becoming familiar in large cities. When it comes to development of retail space, specially the malls, the Tier II cities are no longer behind in the race. If development, plans till 2007 is studied it shows the projection of 220 shopping malls, with 139, malls in metros and the remaining 81 in the Tier II cities. The government of, states like Delhi and national capital region (NCR) are very upbeat about, permitting the use of land for commercial development, thus increasing, the availability of land for retail space; thus making NCR render to 50% of the, malls in India. The Indian Retail Scene India, is the country having the most unorganized retail market. Traditionally it is a, family’s livelihood, with their shop in the front and house at the back, while they, run the retail business. More than 99% retailers, function in less than 500 square feet of shopping space. Global retail consultants, KSA Techno park have estimated that organized retailing in India is expected to ,touch Rs 35,000 crore in the year 2013-14. The Indian retail sector is estimated at ,around Rs 90,000 crore, of which the organized sector accounts for a mere, 2 percent indicating a huge potential market opportunities that is lying in the ,waiting for the customer savvy organized retailer. Purchasing power of Indian urban consumer is ,growing and branded merchandise in categories like Apparels, cosmetics, Shoes, Watches, are slowly ,becoming lifestyle products that are widely accepted by the urban Indian. consumer. Indian retailers need to advantage of this growth and aiming to grow, diversify and introduced new formats have to pay more attention to the brand, building process. The emphasis here is on retail as a brand rather than retailers, selling brands. The focus should be on branding the retail business itself. In their, preparation to face fierce competitive pressure, Indian retailers must come to, recognize the value of building their own stores as brands to reinforce their, marketing positioning, to communicate quality as well as value for money. The Indian, retail scene has witnessed too many players in a short time, crowding several, categories without looking at their core competencies, or having as well, thought out branding strategy. Strategies, Trends and Opportunities Retailing in India is gradually inching its way toward, becoming the next boom industry. The whole concept of shopping has altered, in terms of format and consumer buying behavior, ushering in a revolution in, shopping in India. Modern retail has entered India as seen in sprawling shopping, ce

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Hitendra Patil is the President of Global F&A Services, Datamatics Business Solutions, Inc. | Exclusive Services for CPA/Accounting Firms.

In my previous article about accounting and tax outsourcing for CPAs, I provided insights on:

• Increased demand and staffing shortages.

• Offshore outsourcing as a solution.

• The transition from profit to growth.

• Challenges in offshore outsourcing for accountants.

• Essential offshore outsourcing considerations for CPAs.

While the previous article discussed the offshore outsourcing landscape, this piece aims to be a relevant guide on effectively implementing outsourcing for your firm. You, as a CPA/accountant, want to ensure you do everything you can to deliver and enhance your influence on your clients. Outsourcing is an impactful way to do that.

New FBI Warning As Hackers Strike Email Senders Must Do This 1 Thing

2 obvious signs of workplace gaslighting from a psychologist, baby reindeer real martha reveals identity in photo with piers morgan.

Now, let us discuss the next steps. How will you determine what work to outsource? What should you look for in an outsourcing partner? How can you build and maintain an effective outsourced team? Let's take a look.

Determine Your Needs

Before your firm wades into outsourcing, you must first define what you need for yourself. Do you need to outsource to overcome a talent shortage, cater to growth, add more service capabilities or combine these objectives? Do you want to outsource basic bookkeeping, complex tax filings or more specialized work?

If the scope of the activity you want to outsource is clear, identifying the right partner for your situation is more straightforward. A competent provider will work with you to nail the exact scope of work.

Ensure You Choose The Right Outsourcing Partner

The best partner for you depends a lot on your needs, but here are some general considerations:

• Relevant expertise: Does the outsourcing provider come with a stellar track record in serving CPA firms? At the same time, look out for the financial stability of the provider and its hiring practices. Can the provider ensure talent that does justice to your reputation with your clients?

• Data security measures: Considering the sensitive nature of financial data, this is an absolute must. It is essential that your chosen service provider complies with international standards for information security management, such as GDPR , SOC 2 , ISO 27001 , etc., and makes continued technological investments.

• Cultural fit: Strong communication is at the heart of any successful partnership. That means ensuring the provider's cultural practices match your firm's expectations.

• Legal and ethical considerations: International outsourcing involves many legal and ethical considerations. Your CPA firm has to comply with local laws as well as with rules that govern the particular jurisdiction where the outsourcing provider operates. This includes understanding data protection and labor laws and any specific regulations related to the provider's practices.

Invest In Technology

Leverage technology to ensure effective interaction between the onshore and offshore teams. Make a strong investment in communication tools and cloud-based platforms, which can provide seamless collaboration.

For example, you can leverage collaboration tools (such as Microsoft Teams), workflow tools (e.g., Jetpack Workflow) and coordination tools (e.g., Microsoft Teams or Zoom for video meetings) to build a relationship with your overseas team. You can also automate daily operations with tools like Bill or Dext so that both onshore and offshore teams can do top-notch work. Keep an eye on leveraging AI, whether third-party tools (like ChatGPT) or AI features that are coming into your account/tax/payroll/audit software.

Build Your Global Team

The most important decision you will make in your offshore outsourcing journey is whether you want to manage people in another country yourself or focus on the outcome of what those people do, i.e., whether you manage your global operations yourself or whether you want to obtain managed services. When you choose the latter, you will build a partnership with an offshore outsourcing company that does your work, and you would want to treat that company as an extension of your firm by:

• Checking in regularly: You want to manage and nurture the relationship with your outsourcing partner actively. Set up periodic reviews to assess the outsourcing provider's performance against agreed benchmarks. Ensure regular, planned interactions with the outsourced team assigned to your work.

Additionally, consider scheduling periodic checks to see how well the outsourcing company is doing, not just how your work is done. You can do so by reviewing the company's financial statements. Government websites in many countries provide such information for free or for a nominal payment. You can also check company reviews from sources publicly available, such as Glassdoor, for employee reviews to learn how the company is doing in its labor practices—a critical aspect for outsourcing companies to ensure seamless talent availability.

• Creating a feedback loop: Do not treat the company as just a vendor. Establish structured feedback mechanisms that identify improvement areas and fix problems quickly.

• Sharing culture: Make ways for local and offshore teams to share their cultures. It can help bridge any gaps between them. Participate (by video calls when needed) in the local festivities, provide tax-season completion goodies as gifts, have quarterly team meetings, etc., to make the interactions feel human-to-human, not just business-to-business.

• Keeping an eye on what's coming next: CPA firms and outsourcing providers must keep up as the world changes. New technologies, regulations and changes in how work is done will make outsourcing more effective. Your firm is the expert in managing such factors for your clients, and you'd want to ensure you share your insights on upcoming changes with your outsourcing provider.

Offshore outsourcing can provide a practical, viable and profitable alternative to the current resource crunch CPA firms are experiencing. By being intentionally selective and better managing your outsourcing relationship, your firm can benefit from a quick but effectively controlled and high-quality capacity ramp while giving your local teams enhanced work experience.

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Josh kesselman, founder of raw rolling papers, announces $100,000 donation to last prisoner project.

New York, New York--(Newsfile Corp. - May 8, 2024) - Josh Kesselman, founder of BBK, the company behind RAW Rolling Papers, has announced the company's latest philanthropic efforts with a $100,000 donation to the Last Prisoner Project, a nonprofit dedicated to the release and rehabilitation of individuals incarcerated for cannabis offenses. This decision reinforces RAW and Kesselman's role in addressing the repercussions of the War on Drugs.

RAW has consistently shown a dedication to social justice since its inception.

The donation - which was made in December of 2023 - is allocated between two of the Last Prisoner Project's (LPP) goals. Half of the funds will go to assisting individuals recently released from prison on cannabis-related charges to help them get back on their feet. The other half of the donation will go towards programs that help people who were incarcerated under non-violent cannabis-related crimes. Josh Kesselman and RAW have demonstrated a consistent commitment to social justice, with their total donations to a variety of causes totaling over $3 million.

Managing director of LPP, Mary Bailey, was quoted in Benzinga Cannabis saying, "We are grateful for the generous donation from Josh Kesselman and the team at RAW, which has helped us facilitate the liberation of non-violent cannabis offenders, as well as fund our push for systemic change. In just a few short months, RAW's donation has provided significant impacts to our organization," highlighting the impact of RAW's support.

Josh Kesselman, RAW Founder

Josh Kesselman reflected on the significance of RAW's donation, "While our customers are rolling up with our papers, thousands of people remain wrongfully jailed for nonviolent cannabis offenses," Kesselman told Benzinga, "We are proud to be part of the solution through our donations to Last Prisoner Project, an organization that is truly putting in the work to reform our criminal justice system."

By donating to organizations like the Last Prisoner Project, RAW and Josh Kesselman are demonstrating their dedication to social justice and using their platforms to spread awareness to their wide consumer base.

Further information about RAW's philanthropic work and the Last Prisoner Project can be found at their respective websites https://rawgiving.com/ and https://www.lastprisonerproject.org/ .

Email: [email protected] Website: https://www.provenmedia.com/ SOURCE: Proven Media

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/208387

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Follow our news, recent searches, hyundai, kia unit settles us charges it repossessed service members' vehicles, advertisement.

FILE PHOTO: A U.S. Justice Department logo or seal showing Justice Department headquarters, known as "Main Justice," is seen behind the podium in the Department's headquarters briefing room before a news conference with the Attorney General in Washington, January 24, 2023. REUTERS/Kevin Lamarque/File Photo

:Hyundai's and Kia's American financing arm will pay $334,941 to settle charges it illegally repossessed vehicles belonging to military service members, the U.S. Department of Justice said on Wednesday.

According to papers filed in Los Angeles federal court, Hyundai Capital America violated the Servicemembers Civil Relief Act between 2015 and 2023 by repossessing 26 vehicles whose owners had begun paying off their loans prior to active duty.

The Justice Department said the law required the financing arm to obtain court permission before repossessing vehicles.

It cited as an example the 2017 repossession and sale of Navy Airman Jessica Johnson's three-year-old Hyundai Elantra, after the financing arm determined that she was on active duty but "not deployed."

Johnson still owed $13,796 on the car, and Hyundai Capital America realized in 2020 it should not have repossessed it, court papers show.

“Members of our Armed Forces should not have to worry about having their cars repossessed while they are in military service," Assistant Attorney General Kristen Clarke said in a statement.

Without admitting wrongdoing, Hyundai Capital America will pay $10,000 plus lost vehicle equity to each of the 26 service members, and repair their credit. It will also pay $74,941 to the U.S. Treasury "to vindicate the public interest."

Hyundai Capital America is based in Irvine, California.

"HCA takes pride in supporting our military families," it said in a statement. "Additionally, we have already taken steps to further enhance our compliance with all SCRA requirements."

The Justice Department in the last several years settled claims under the servicemembers law against several financing companies, including General Motors, Nissan and Wells Fargo financing arms.

The case is U.S. v. Hyundai Capital America, U.S. District Court, Central District of California, No. 24-03818.

(Editing by Diane Craft)

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