Everand Logo

Welcome to Everand!

  • Discover millions of ebooks, audiobooks, and so much more with a free trial

    Only €10,99/month after trial. Cancel anytime.

    High-Q Financial Basics. Skills & Knowlwdge for Today's man
    High-Q Financial Basics. Skills & Knowlwdge for Today's man
    High-Q Financial Basics. Skills & Knowlwdge for Today's man
    Ebook94 pages1 hour

    High-Q Financial Basics. Skills & Knowlwdge for Today's man

    By J.M. Lacarte

    ()

    Read preview

    About this ebook

    Highly convenient for those who:
    - Already know about these matters, but they would like to get it refreshed and keep a consulting tool with them
    - Need to master financial concepts in order to enhance their professional or academic performance
    - Want to really know what their money & investments are worth. Here is the rationale.

    The book starts at a basic level for inexpert readers and then moves into the key matters of finance that it is necessary to master. It deals with basic questions on the value over time of money, a correct valuation of different structures of bonds, the discounting and capitalization of different cash flows, methods for NPV (Net present Value), IRR (internal Rate of Return), Pay-back, etc. and the reasoning behind all of them. The book explains how to deal correctly with inflation when making any analysis. The author has explained the basic concepts in some exercises and cases so that the reader can master them.

    CONTENTS
    -The Value of Money Over Time
    -Measuring The Profitability of Investments
    -Solved Exercises on Basic Concepts
    -Determination of Relevant Flows to Make a Business Decision Case
    -FINALTERNA Case
    -The FERSA Case

    LanguageEnglish
    PublisherJ.M. Lacarte
    Release dateAug 17, 2012
    ISBN9781476291291
    High-Q Financial Basics. Skills & Knowlwdge for Today's man

    Related to High-Q Financial Basics. Skills & Knowlwdge for Today's man

    Related ebooks

    Finance & Money Management For You

    View More
    View More

    Related podcast episodes

    Related articles

    • Article

      I Wish I Knew What Discounted Cash Flow Was, But I’m Too Embarrassed To Ask

      Aug 6, 2021

      According to a concept called the time value of money, cash that you’re promised in the future is worth less than cash received today, because you can invest today’s money so that it grows tomorrow, or spend it on a larger quantity of goods than you

      1 min read

    • Article

      What You Need to Know About Mutual Fund Returns

      May 26, 2022

      Past performance may be little guarantee of future results, but when we assess investments, especially mutual funds, past performance is an informative measure. But it's not the only one. The trick is to understand what you're looking at when you scr

      4 min read

    • Article

      4 Tips for Navigating Market Volatility

      Aug 26, 2022

      Despite the inevitable anxiety that accompanies it, stock market volatility may be beneficial. Corrections are a normal and essential part of the cyclical nature of the market, serving as a “pressure release valve” when equity markets soar too high t

      4 min read

    • Article

      Build a Bond Ladder for More Income

      Apr 4, 2018

      It's a sure bet that interest rates have settled into a higher range and are poised to rise further. But don't let that scare you away from bonds (when rates are rising, bond prices tend to fall, and vice versa) or from certificates of deposit. If an

      3 min read

    • Article

      Lower Your Future Income Risk by Taking Action Now

      Apr 13, 2020

      The news about the stock market has been wonderful for a lot of your retirement savings. The portion of your portfolio invested in the stock market has recovered from the thrashing the pandemic delivered and, if it followed the broad market, it has r

      4 min read

    • Article

      Are You Making One of the Top 3 Investing Mistakes?

      Sep 5, 2019

      Those who have been investing long-term know that the market can challenge even the most seasoned professional. Volatility, coupled with the uncertainty of what's next, can lead many to question why they invest in the market at all. Oftentimes, in

      4 min read

    • Article

      How to Spot (and Squash) Nasty Fees That Hide in Your Investments

      Jan 8, 2021

      It’s a new year, and now is the time to compile and look at all your year-end investment statements. You’re likely pretty happy to see some double-digit gains thanks to the stock market (especially tech stocks) hitting record highs. The statements th

      5 min read

    • Article

      Get Off To A Smart Start

      Feb 2, 2022

      Get Off To A Smart Start
      8 min read

    • Article

      4 Potential Problems with Equity Compensation, and How to Solve Them

      May 1, 2021

      Non-cash compensation might not sound like a very good deal for you as an employee — but depending on the type, it can actually provide quite a boost to your net worth over time. Equity compensation is a type of “non-cash” comp that your company may

      4 min read

    • Article

      Build a Bond Ladder with ETFs

      Nov 23, 2020

      The bond world can seem set in its ways, but once in a while an innovative product comes along to upend the notion. In this case, we’re talking about target-maturity bond exchange-traded funds, currently offered by Invesco and iShares. The ETFs inves

      5 min read

    • Article

      Take Charge Of Your Future

      Jul 1, 2020

      Take Charge Of Your Future
      5 min read

    • Article

      How To Use Ratios For Different Sectors On The Bourse

      Jan 10, 2020

      when investing there are several ratios you can use as part of analysing a company’s current performance or to compare it with another company. These ratios would include return on equity (RoE), price-to-earnings (P/E), debt-to-equity (D/E), cash con

      2 min read

    • Article

      Choose The Right Friends

      Apr 29, 2020

      Choose The Right Friends
      7 min read

    • Article

      1 Way to Completely Offset Taxes on Millions in Capital Gains

      Jan 29, 2020

      Opportunity Zones are among the latest tools in alternative investments, but what are the more practical applications of utilizing an Opportunity Zone fund? Two such applications include one for those who are considering selling their business, as we

      5 min read

    • Article

      With Interest Rates Near Zero, Annuities Help Pick Up the Slack

      Jul 23, 2020

      A headline in The New York Times the other day caught my eye. It read: Rates at Rock Bottom Are Expected to Linger in Fed’s Latest Forecast. The question that would be worthy of an in-depth article is, What Do Low Interest Rates Mean to Current and F

      2 min read

    • Article

      3 Key Investment Concepts Explained

      Sep 9, 2022

      Send suggestions for topics and requests for info to yourmoney@you.co.za. We may answer your questions in this column but won’t reply personally. THE world of investment can be complicated, but understanding some basic concepts will help to ensure yo

      3 min read

    • Article

      12 Best Monthly Dividend Stocks and Funds for the Rest of 2022

      Dec 7, 2020

      For all the changes we've experienced in recent years, some things remain regrettably the same. We all have bills to pay, and those bills generally come monthly. Whether it's your mortgage, your car payment or even your regular phone and utility bill

      1 min read

    • Article

      I Wish I Knew What Capitalisation Rate Was, But I’m Too Embarrassed To Ask

      Feb 17, 2023

      The capitalisation rate (or cap rate) is used to value real-estate investments. It is calculated as annual net operating income (NOI) produced by a property, divided by the current value of the property. In turn, net operating income is the income th

      1 min read

    • Article

      For Sustainable Retirement Income, You Need These 5 Building Blocks

      Jun 9, 2022

      Sometimes we have all the elements for a great retirement, but until we put them together the right way, we don’t get the result we want. I call it the H2O problem. We have plenty of oxygen in the atmosphere. Likewise, hydrogen. It seems simple, but

      2 min read

    • Article

      11 Best Monthly Dividend Stocks and Funds for 2021

      Dec 7, 2020

      We're now in the final weeks of what has been the strangest year in living memory. But while so much has changed in 2020, one thing remains unquestionably the same: We still have bills to pay, and the vast majority of those bills come on a monthly sc

      1 min read

    • Article

      Why You Need To Budget

      Sep 14, 2020

      A budget is an estimate of revenue and expenses over a specified future period and is compiled and re-evaluated regularly. It is a vital tool for any business, including a farming operation, as it enables management to take full financial and economi

      3 min read

    • Article

      Questions To Ask Before You Move Your Retirement Money

      Apr 9, 2020

      Send suggestions for topics and requests for info to yourmoney@you.co.za. We may answer your questions in this column but won’t reply personally. YOU’VE compared notes with a friend and discovered the money they’ve invested in their retirement prese

      3 min read

    • Article

      Asset Allocation At Work

      May 14, 2022

      Determining your portfolio's ideal asset allocation is not a onetime set-it- and-forget-it process. It is important to regularly make sure your asset allocation is maintained. Likewise, there are moments when you may need to tweak your asset allocati

      2 min read

    • Article

      The Upside of a Downside Market

      Jun 16, 2020

      The year so far has presented a challenging time for investors. However, periods of market dislocation also can provide opportunities on the financial planning side to create a better long-term position. Here are five things you can do right now, to

      3 min read

    • Article

      A Bad Bet On Trumpflation

      Nov 15, 2024

      Markets expect inflation to pick up under Donald Trump (see page 4), so many investors will be thinking about how to hedge against that risk. Inflation-linked government bonds (see below) might look like the answer – yet it’s by no means certain that

      2 min read

    Related categories

    Reviews for High-Q Financial Basics. Skills & Knowlwdge for Today's man

    0 ratings

    0 ratings0 reviews

    What did you think?

    Tap to rate

    Review must be at least 10 words

      Book preview

      High-Q Financial Basics. Skills & Knowlwdge for Today's man - J.M. Lacarte

      THE TIME FACTOR. THE CONCEPT OF COMPOUND INTEREST

      Money does not have the same value today as it can have tomorrow. The time factor plays a decisive role when it comes to fixing the value of the capital invested. It is not the same to have $ 10,000 now or to receive it one year in to the future. The value of money changes as a consequence of:

      1) Inflation.

      2) the opportunity to invest money in some activity, protecting it from inflation while at the same time giving a return.

      3) credit risk.

      If we have the alternative option of receiving $ 10,000 at the end of the year, that is waiting one year, we could accept on the condition that we receive an additional sum to compensate us for the three factors set out above. Having said this, we are stating that money makes more money, or perhaps it is better to say: Money produces wealth.

      Financial problems normally require the use of compound interest, rather than simple interest. Compound interest assumes that the amounts of interest already earned are reinvested with the original capital and therefore earn a return at the same interest rate.

      This effect is achieved by the action of CAPITALIZATION of the interest generated. Each time they fall due, and therefore are calculated, the interests generated is taken to the capital account. This means that they are now earning interest at the rate agreed, as they are now capital invested (this is not because the borrower has not complied with the contract but because it was agreed like this).

      This way of dealing with interest is much more in line with the time value of money than using simple interest. Under the latter, the amounts earned as interest cannot generate more interest even if the interest is paid over a long time before all the original investment is paid back.

      In this explanation, we will try to keep a lot of mathematics out of the subject, avoiding working with equations and formulas. The quantitative concepts used are illustrated in the numerical examples as simply as possible.

      ELEMENTS

      The elements that intervene in all financial situations are:

      - TIME (time the business takes or the period during which the interest is capitalized).

      - THE INTEREST rate applied to the period.

      - the FLOWS OF FUNDS or CASH FLOWS which take place at different moments.

      TIME

      Normally the time a business lasts is divided into PERIODS (days, months, years, etc.) or intervals, corresponding to the type of capitalization agreed.

      So that the return or cost of each period is equivalent, in principle they should be of equal length, though in some cases models are designed with periods of different lengths but here this is not dealt with as we don’t believe it occurs often.

      GRAPHS usually provide us with a great deal of help in analyzing business situations. Time is represented on one axis, broken down into the periods, (períod 0-1 or period 1, period 1-2 or period 2, etc.):

      THE INTEREST RATE

      The interest rate represents the cost of being lent the capital necessary for the business during a certain time period. Normally it is represented by the letter i, and it is stated as a percentage for a given time period.

      The interest rate is applied to the PERÍOD of COMPOSITION, this is the period during which interest is earned, or must be paid. It is important to note that this interest rate is called the periodic interest rate, and the period for which it is applied must be the same as the periods into which the business Project is divided (years, months, days, etc.)

      The periodic interest rate can be applied at the beginning of the period or once the period is over, as is stipulated in the contract. It is vital to identify with which interest rate we are working. The equivalence developed in later examples use the (over)due interest rate and therefore if the original interest

      Enjoying the preview?
      Page 1 of 1