http://www.brighthub.com/office/finance.aspxenhttp://www.brighthub.com/office/finance/articles/15544.aspxMon, 28 Sep 2009 20:18:38 GMTb133e95a-c263-4882-8f2a-b24547eff78e:15544johngAs accounting and finance are indelibly linked, one view of a corporation considers the firm to be a set of financial records which provide a snapshot of corporate health. However, financial records are largely historic, not forward thinking. The Basics of the Accounting Model As a subset of the Investment-Vehicle Model, the Accounting Model revolv...http://www.brighthub.com/office/finance/articles/19318.aspxMon, 21 Sep 2009 19:16:13 GMTb133e95a-c263-4882-8f2a-b24547eff78e:19318johngAn investor’s valuation of firm must go beyond book values of assets and liabilities. The market values give a much better estimate of stockholder equity. The historical information found on a corporation’s financial statements represents only the company’s financial position at some time in the past. No matter how strict accounting practices...http://www.brighthub.com/office/finance/articles/19030.aspxMon, 21 Sep 2009 19:08:21 GMTb133e95a-c263-4882-8f2a-b24547eff78e:19030johngPrincipal-Agent relationships occur in many forms in business. Understanding these relationships is crucial for investors. As discussed in another article, the modern corporation can be conceptualized in a variety of ways . The set-of-contracts view illustrates that relationships between and among multiple stakeholders is complicated and provides m...http://www.brighthub.com/office/finance/articles/18890.aspxMon, 21 Sep 2009 19:06:10 GMTb133e95a-c263-4882-8f2a-b24547eff78e:18890johngManaging the amount of a corporation’s debt is crucial to the risk of owning shares of stock in a company. There are two main methods for a corporation to raise capital to finance operations. Equity is the selling of parts of a company to investors. Investors buy several kinds of stock to take ownership and invest in the profitability of a co...http://www.brighthub.com/office/finance/articles/18709.aspxMon, 21 Sep 2009 19:05:43 GMTb133e95a-c263-4882-8f2a-b24547eff78e:18709johngDebt interest paid to creditors and dividends paid to stockholders are treated differently from a tax perspective. This difference has a significant impact on the choices managers must make to finance a corporation. Corporations finance operations through two major methods. Debt is the borrowing of money to be paid back with interest over the life ...http://www.brighthub.com/office/finance/articles/18708.aspxMon, 21 Sep 2009 19:04:59 GMTb133e95a-c263-4882-8f2a-b24547eff78e:18708johngThe S corporation is a subset of the normal corporation that enjoys some of the benefits of a partnership and some of the benefits of a corporation. Benefits of S Corp There are generally three types of business forms from which to choose when starting a new company. The sole proprietorship gives unlimited liability to its owner in which the person...http://www.brighthub.com/office/finance/articles/18540.aspxMon, 21 Sep 2009 19:01:30 GMTb133e95a-c263-4882-8f2a-b24547eff78e:18540johngEthical behavior does more than keep individuals and companies out of trouble. It can have a real impact on the bottom line for stockholders. Business ethics is a subject taught in most management programs throughout the United States. Complex business relationships often test the moral character of employees and managers because it is impossible t...http://www.brighthub.com/office/finance/articles/18710.aspxFri, 18 Sep 2009 19:30:19 GMTb133e95a-c263-4882-8f2a-b24547eff78e:18710johngTo avoid Triple Taxation, most of the dividends received by corporations are not taxed. Read on to learn important taxation information for investors. Although corporations enjoy four main advantages over other organizational forms , one disadvantage is double taxation. Since corporations are considered entities like a person, they may own property...http://www.brighthub.com/office/finance/articles/18712.aspxWed, 09 Sep 2009 19:02:01 GMTb133e95a-c263-4882-8f2a-b24547eff78e:18712johngCorporations reporting negative income may carryback or carryforward these losses into other fiscal years. Sometimes a refund of previously-paid taxes is returned to these companies. Fluctuations in market conditions, devaluing of currency, and bad decision-making all contribute to a company’s inability to show a profit during a fiscal year. One of...http://www.brighthub.com/office/finance/articles/17646.aspxThu, 03 Sep 2009 14:16:07 GMTb133e95a-c263-4882-8f2a-b24547eff78e:17646johngThe price of a security can be calculated by taking into account all future cash flows associated with the asset. The Net Present Value also takes into account the price of the asset. An investment that is expected to have a zero return is not a wise financial decision. With a return of zero, it would be better if the money were not invested at all...http://www.brighthub.com/office/finance/articles/16687.aspxThu, 03 Sep 2009 14:15:41 GMTb133e95a-c263-4882-8f2a-b24547eff78e:16687johngNews articles often discuss the effects of taxes on capital gains when a company sells a long-term investment. Investors must understand the concept of capital gains to properly value their effects on firm profitability. Corporations often invest in long-term securities for the purpose of creating value. However, long-term assets create a type of o...http://www.brighthub.com/office/finance/articles/16834.aspxThu, 03 Sep 2009 14:15:17 GMTb133e95a-c263-4882-8f2a-b24547eff78e:16834johngA perpetuity is a special case in which cash flows are expected to go on forever. Valuing a perpetuity is useful in estimating long-term cash flows. A perpetuity is an asset that is expected to give a steady stream of cash flows forever. In essence, it is an annuity whose cash flows never end. Although, perpetuities are somewhat rare, they do exist...http://www.brighthub.com/office/finance/articles/16835.aspxThu, 03 Sep 2009 14:14:43 GMTb133e95a-c263-4882-8f2a-b24547eff78e:16835johngCurrent tax laws do not allow a corporation to accumulate large sums of retained earnings in lieu of distributing dividends. Doing so incurs a tax penalty. A dividend is a share of corporate earnings distributed to shareholders on a regular basis. Shareholders typically report this income on personal income tax. However, a corporation that holds on...http://www.brighthub.com/office/finance/articles/16347.aspxMon, 24 Aug 2009 15:05:33 GMTb133e95a-c263-4882-8f2a-b24547eff78e:16347johngThe concept of diversification suggests that putting all of one’s eggs in one’s basket is a risky decision. Spreading investments over multiple, unrelated securities reduces the likelihood of a sudden, fatal outcome. One of the simplest concepts in finance theory is that of diversification. Diversification involves spreading a valuable ...http://www.brighthub.com/office/finance/articles/16348.aspxMon, 24 Aug 2009 15:05:05 GMTb133e95a-c263-4882-8f2a-b24547eff78e:16348johngInformation travels quickly when money is on the line. In capital markets, prices of securities react to information swiftly and efficiently. News is happening all the time. In our modern society, information comes at us in a variety of forms such as newspapers, television, radio, and Internet sources. Capital markets are efficient in reflecting th...http://www.brighthub.com/office/finance/articles/16349.aspxMon, 24 Aug 2009 14:59:32 GMTb133e95a-c263-4882-8f2a-b24547eff78e:16349johngMoney today is not the same as money tomorrow or even yesterday for that matter. The old adage “time is money” is an important concept in financial markets. Anyone who uses a credit card knows that paying off debts over a long period of time costs more than if the debt is paid off more quickly. This is because there is a cost with takin...http://www.brighthub.com/office/finance/articles/16351.aspxMon, 24 Aug 2009 14:59:00 GMTb133e95a-c263-4882-8f2a-b24547eff78e:16351johngWhen a company sells a significant asset, the proceeds are recorded as extraordinary income on the company’s financial statements. This event has two major repercussions to investors. In corporate finance, the means to accurately calculate and record the operating activities of a corporation is vital both as an internal measure of performance...http://www.brighthub.com/office/finance/articles/16345.aspxFri, 21 Aug 2009 13:35:28 GMTb133e95a-c263-4882-8f2a-b24547eff78e:16345johngIn almost all aspects of life, the largest risks have the largest payoffs. In competitive financial markets, this holds true almost universally. In life it is generally true that greater rewards are wrought through greater risk-taking. The principle of risk-return trade-off suggests that there is a strong positive relationship between the potential...http://www.brighthub.com/office/finance/articles/15541.aspxWed, 19 Aug 2009 18:00:25 GMTb133e95a-c263-4882-8f2a-b24547eff78e:15541johngMost people assume they understand the purpose of finance and the role it plays in a corporate setting. But finance deals with more than just money. The key is in the value of things. Most people manage money on a small scale such as personal or small business finance. Corporate financial management, however, is a completely different approach to m...http://www.brighthub.com/office/finance/articles/15542.aspxWed, 19 Aug 2009 17:59:56 GMTb133e95a-c263-4882-8f2a-b24547eff78e:15542johngOften referred to as the most basic representation of a corporation, the Investment-Vehicle Model provides a simple schematic of entity relationships. However, simple is not always best. Corporations are complicated entities with many stakeholders, each with its own idea of how the firm should remain profitable. The need for a model that simultaneo...