Debt to Equity Ratio & Debt to Capital Employed
The Debt-to-Equity (D/E) ratio is a financial metric that compares a company’s total debt to its shareholder equity. It measures the degree to which a company finances its operations through debt rather than wholly owned funds. This ratio is essential for investors, analysts, and creditors because it provides insights into a company’s financial leverage and […]
Operating Expenditure (OPEX) – Definition, Example, Formula
What is Operating Expenses Operating expenses are the costs associated with a business’s day-to-day operations. They are necessary for a company to conduct its business and generate revenue. Operating expenses are reported on a company’s income statement and are crucial for assessing the business’s financial health and operational efficiency. Types of Operating Expenses Operating expenses […]
Capital Expenditure (CAPEX) – Definition, Example, Formula
What is Capital Expenditure Capital expenditure, often abbreviated as CapEx, refers to the funds a company uses to acquire, upgrade, and maintain physical assets such as property, industrial buildings, or equipment. This kind of expenditure is considered an investment in the business with the expectation of benefiting the company over the long term beyond the […]
Exchange-Traded Fund, Popularly Known As ETF
What is ETF An exchange-traded fund (ETF) is an investment fund that tracks the performance of an underlying index or asset and can be bought and sold throughout the day on stock exchanges. ETFs are similar to mutual funds in that they offer investors access to a diversified portfolio of securities but with the added […]
Understanding Dividend Distribution Tax
Dividend Distribution Tax (DDT) is a tax levied by the Indian government on dividends, which a company pays its shareholders out of its profits. It is a form of tax paid by the company distributing the dividend, not by the shareholder receiving it. DDT is levied at a fixed rate, currently set at 15% (plus […]
Understanding Equity: A Comprehensive Guide
Types of Equity Private Equity Definition: Private equity is a form of investment into privately held companies not listed on public exchanges. Private equity firms or funds usually engage in direct investment or buyouts of such companies. The investment is made from a long-term perspective and at different stages of the company’s growth and funding […]
Introduction to Minimum Alternate Tax (MAT)
Minimum Alternate Tax (MAT) is a tax mechanism introduced by the Indian Income Tax Act to ensure that companies paying minimal or no income tax through legal tax exemptions and incentives pay a certain minimum amount of tax to the government. The rationale behind MAT is to bring tax equity, ensuring profitable companies cannot entirely […]
The Insolvency and Bankruptcy Code
What is the Insolvency and Bankruptcy Code The Insolvency and Bankruptcy Code (IBC) 2016 is a comprehensive legal framework introduced by the Indian government. The IBC aims to promptly consolidate and amend the reorganisation and insolvency resolution laws of corporate entities, partnership firms, and individuals. The primary objective of the IBC is to maximise the […]
Guide to SEBI Registered Investment Advisors
Meaning Registered Investment Advisors (RIAs) provide personalised financial services to both retail and institutional investors. They offer financial planning, investment advice, and asset allocation based on an in-depth analysis of the client’s financial situation. RIAs cater to different types of investors and tailor their advice accordingly. The language used in their communication is simple and […]
Guide to the Competition Act, 2002
Guide to the Competition Act, 2002 In the wake of globalisation and the liberalisation of the Indian economy, the need for a modern competition law to replace the archaic Monopolies and Restrictive Trade Practices Act 1969 became evident. The Indian government responded by enacting the Competition Act 2002, which aimed to foster competition, curb anti-competitive […]
Shaping Success: The Influence of My Life Mentors
We all have mentors who keep teaching us the good, bad, and ugly during our lifetime. We don’t have to find mentors on Google; it is there around us; we have to identify and give them importance for what they are. In this article, I will share how some of my mentors impacted my life […]
Corporate Social Responsibility Explained
What is Corporate Social Responsibility in India? An In-Depth Analysis Corporate Social Responsibility Law (CSR) in India has evolved from voluntary donations and philanthropy to a statutory requirement, integrating social, environmental, and ethical responsibilities into the corporate sphere. The Indian government’s mandate on CSR under the Companies Act 2013 marked a significant step towards embedding […]
Private Equity Explained With Examples and Ways to Invest
Introduction to Private Equity (PE) and Venture Capital (VC) Private Equity (PE) and Venture Capital (VC) are investment funds that play a crucial role in the financial world. PE funds invest in private companies or conduct buyouts of public companies, aiming for significant control or ownership to influence their direction and growth. Venture Capital targets […]
Hedge Fund Definition, Examples, Types, and Strategies
Hedge Fund Definition, Examples, Types, Benefits, and Strategies Definition – What is a Hedge fund Hedge funds are investment vehicles designed to maximise returns and hedge against market volatility. Some of the concepts are: Core Concept: Hedge funds use diverse investment strategies to generate active returns and aim for high returns by leveraging various asset […]
Foreign Exchange Management Act 1999 Guide
Understanding of Foreign Exchange Management Act 1999: Understanding the Dynamics of the ACT Foreign Exchange Management Act 1999, called FEMA, was introduced to cater to the need for growing regulations around foreign exchange transactions after the Indian economy opened for foreign investment in 1991. It also replaced the Foreign Exchange Regulation Act of 1973 with […]
A Deep Dive into the Strategies and Benefits of Taxes Saved by Businesses
Saving on taxes or understanding tax-saving tips is a crucial aspect of managing business finances effectively. A common question often arises about how to save ta in a private limited company in India. Can we do something legally so that taxes are saved? Some tax planning tips can be implemented in today’s business life to […]
A Complete Guide To ESPOs
ESOPs are the employee stock options that are direct compensation offered by the companies to their employees, granting them the right to purchase a specific number of company shares at a predetermined price within a specified period. ESOPs allow employees to benefit from the potential growth of the company’s stock over time. To whom ESOPs […]