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Category: Finance Basics

The basics of markets...

What Is The Stock Market And How Does It Work? A Simple Definition

Stock markets are crucial for business. For many years, the markets have been one of the main sources of financing for companies and at the same time a main source of wealth for many individuals. In today’s world, it’s really important to know how the stock market work, not only because there are attractive investment opportunities there, but also to understand how modern economies operate. What Is A Stock Market And How Does It Work? The Basics Of Financial Markets Stock markets are one of the greatest inventions of our capitalistic world. They work so simply and at the same...

Wealth Inequality changes in the United States in the top 1% by wealth.

The Very Basics Of Starting A Business By William Ackman – How Exactly Business Works For Dummies

This is a great video in which you can learn the basics of business, companies, finance, and money in just 45 minutes. This is all you need to know about the corporate world. You will see how companies raise capital to start their operations and how they use that cash to make a profit. You will see here what happens to money, once it gets into a corporation. The video will also teach you how exactly financial reports are made, you will learn to understand some basic accounting principles and reports as income statements, balance sheets, and cash flow reports. You...

gearing

What Is Gearing? A Simple Definition

Gearing is a popular word in the financial world. It is a synonym of ‘financial leverage’ and both of these words can be used interchangeably. This is a ratio between the amount of own and the amount of borrowed capital in a business, personal budget or any other financial unit. To learn more about leverage in finance, you can read our example on this matter here. Gearing Ratio As we said earlier, gearing ratio is the percentage of own funds from borrowed funds. An example of this is the debt to equity ratio from corporate finance. Let’s say that a...

What Is Financial Leverage? The Basics For Dummies

What Is Financial Leverage? The Basics For Dummies

Financial leverage in simple words is simply a way for achieving bigger results with the relatively small amount of capital/financial resources. This is usually possible with the help of credit, but leverage could also be achieved with the help of some financial instruments like derivatives. In the most common case, borrowing against the initial amount of capital is what actually leverage is. This way one increases the power of his/her money, by adding some more on credit secured by the money. It is used everywhere in the financial world and its main purpose is a greater financial result. Sometimes all...

Halo Report - Sillicon Valey Bank

What Is an Angel Investor? Difference Between Venture Capitalists and Angel Investors

What Is an Angel Investor Actually? First of all, let’s see what a business angel (angel investor) is. This usually is a wealthy person, who is willing to finance a startup, in exchange for a part of the equity of the financed venture, or for convertible debt. It’s not unusual for business angels to be organized in groups, this way they share the risk, combine their experience and know-how and can provide much more financing. In many cases, angel investors are retired entrepreneurs or executives in big companies. They often participate in the management of the startup and provide not only...