Questions tagged [financial-literacy]

for questions related to understanding basic concepts in finance or certain terms in a particular context

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24 views

Book value per share calculation for Visa

From what I read on the web: Book value per share = Stockholders' Equity - Preferred Stock Equity/Average number of Common Shares Number So if we look into the Visa balance sheet: That means: Book ...
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1answer
161 views

What really is a recurring deposit?

What I do not understand is what is really meant by the term "recurring"? Also why is the minimum time limit between recurring and fixed deposit so different (min :6 months and min :7days) ...
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2answers
71 views

Is deal value equal to the enterprise value?

If a buyers pays $1.55 per share to get 6,480,000 shares of the target company such that the total outstanding shares of the target is 12,180,265. So deal value is $1.55 x 6,480,000 = $10.044M, but is ...
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1answer
50 views

Is book value in BVPS really just shareholders equity?

So shareholders equity is total assets - total liabilities while book value is tangible assets - total liabilities. But apparently book value in practice could also just be total assets - total ...
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1answer
42 views

How is BVPS calculated for common shares vs for preferred shares?

I've read a whole bunch of articles (eg: BVPS Definition) and all of them say BVPS is calculated using a formula similar to this: (total shareholder's equity - preferred equity) / total outstanding ...
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2answers
94 views

Foundational equations or concepts of Finance [closed]

For the other sciences it´s easy to point to the most important equations, inequalities, propositions or concepts that ground the discipline. If I want to explain Finance to a physicist say, what are ...
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2answers
84 views

Market Cap, NAV and finite resources

Gave a read through this question and I believe I understand the following: NAV is the sum of a companies assets; represents the value if the company was liquidated Market Cap is (shares outstanding ...
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2answers
319 views

Office and the human capital [closed]

I heard a business man saying "The Office is not a storage of the Human Capital". I do not understand this phrase and I believe there is an interesting and intuitive analysis behind it. Can ...
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8answers
9k views

We're in an asset bubble currently, what can I do about it?

My opinion is that we are in an asset bubble: house and property prices are sky-rocketing, interest rates are low, and inflation rates are high. I'm aware of the futility of trying to time the top of ...
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1answer
53 views

How does the continuously compounded interest formula work in terms of months?

The continuously compounded interest formula is: Pe^rt Where: P = Principle e = 2.718... r = Annual interest rate t = time in years If instead of an annual interest rate, I got a monthly interest ...
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1answer
57 views

Is using proceeds from a short sell or put option to cover the cost of excercising a call option considered freeriding?

I heard that freeriding is not having the cash to pay for the underlying shares when a call option is exercised. If I purchase a call option that is ITM and (purchase a put OR short sell) above the ...
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1answer
3k views

Why would you risk bankruptcy if you lend more money than you own?

Difficult to summarize the question in just a few words, so let me elaborate here. I am currently reading the Financial Times Guide to Banking by Glen Arnold, section Money creation, and there is ...
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1answer
127 views

How to get the basic financial literacy about money, banks, etc [closed]

I am just under 18 and I want to become rich but I do not know much about money. Being from a developing country, I don't know how banks and other financial institutions actually work, and what are ...
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2answers
159 views

What are non-banking financial companies?

I read in the book Indian Economy by Ramesh Singh that, NBFCs are fast emerging as an important segment of Indian financial system. It is an heterogeneous group of institutions performing financial ...
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1answer
68 views

Would shipping costs count as COGS? [closed]

I'm coming from non-accounting and non-finance backgrounds. I need help in form of understanding through a question. When a company sends items to club members but is charged for shipping fees from a ...
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2answers
169 views

What is the US subprime crisis of 2008? [closed]

I have heard that after the US subprime crisis of 2008,particularly a lot of people were pointing fingers at the Economic policymakers. I am not really familiar with why it is so, a detailed ...
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0answers
19 views

Distinction between ROCE formulas

I am interested in the distinction in the following formulas for ROCE. The first one is from Financial Management for the academy profession program by L. Hansen, T.R. Jensen, and M. Dalboge. But ...
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1answer
109 views

Why is mandatory vehicle test and vehicle lifetime a part of the union budget? [closed]

Why is the vehicle test and vehicle lifetime included here. What has the vehicle to do with the Union Budget? https://thedailyguardian.com/union-budget-2021-voluntary-vehicle-scrapping-policy-and-its-...
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2answers
156 views

A doubt in definition of banks

"Banking means accepting money for the purpose of lending or investment,of deposits of money from the public,repayable on demand or otherwise,and withdraw able by cheque,draft,order or otherwise.&...
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6answers
283 views

What is a fair way to split the profits for a co-owned property?

Seeking out some financial guidance... My partner and I recently purchased a home with my sister and brother-in-law. All spaces will be shared with the exception of bedrooms. We will be meeting with ...
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5answers
443 views

Why does society require the common man, who is not at all interested in finance, to engage in investing? [closed]

I am a young graduate who is 3-4 years into his job, and has just started to make enough savings from my job that I am debt free now, and hence having to look into stock market trading/investing so ...
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0answers
106 views

Doubt Regarding Equity Beta and Asset Beta

I know regarding levered beta (equity beta) and how to convert into unlevered beta (asset beta). But recently my finance professor in one of his slides showed the below formula : asset beta = (D/D+E)*...
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45 views

Rights issues: How do I estimate what the share price *now* would have been before a rights issue?

IAG SA had a significant rights issuance in September (details below). Given the share price now (~200p), I want to estimate what the equivalent price would have been before the rights issuance. How ...
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1answer
191 views

What's the difference between "gross profit", "operating income" and "net income"?

I received an email boasting about a company doing the following in their 4th quarter Revenues up 94% to $978m USD Operating Income up 600% to $200m Net profit of $123.9m What is the difference ...
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1answer
54 views

Operating Margin depends on Revenue?

It is said that high Operating Margin means that the company is efficient in its operations and is good at turning sales into profits. But let's suppose that market demand has increased. The company ...
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4answers
2k views

How can I budget a 'conditional reimbursement'?

To start off, I don't know the correct term for this situation, which limits my research options. I have looked for 'conditional loan', 'conditional reimbursement' and such, but none of the results ...
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2answers
116 views

What is a company allowed to do with investors funds?

Imagine there are two companies. Company A invests £1m in Company B. Company B stock price goes up. Company B now has £1m and decides to Invest in company A. Company A stock price goes up and with the ...
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2answers
269 views

Why don't GameStop, AMC issue shares?

In line with https://money.stackexchange.com/a/7985, why don't corporations with skyrocketing share prices issue shares immediately? Famous examples this past week are AMC, BBBY, GME. They were all at ...
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1answer
94 views

The dividend yield of AMC is reported differently on different financial info websites. How do I know which is correct?

Google Finance says the dividend yield of AMC is 2.68%, Yahoo Finance says it's "N/A", Marketwatch says it's "0.00%", and Robinhood says it's 17.95%. I'm very surprised to see that ...
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0answers
16 views

How to calculate Weighted-average common shares outstanding-Diluted

I see the following Form 3. When I calculate Weighted-average common shares outstanding-Diluted, do I have to include all the number of Class A Common Stock and all the number of Class B Common Stock? ...
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0answers
28 views

Is COT (cost of transfer) exsists in bank from a certain country to another? (Eg. Uk to philippines or othe country to philippines) [duplicate]

Heres the scenario: I have invested through bitcoin to a certain company but the thing is endless payments were being asked and i have complied with them. A few days i received from a certain bank ...
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8answers
440 views

First car out of college

I am graduating college soon with a job lined up making 100K a year at an area with relatively low cost of living. I am fortunate enough to have no debt whatsoever (thanks mom and dad!). I am ...
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1answer
426 views

May I use my IRA account to pay off "parent plus" loans?

My spouse and I are 60 yrs old. We paid for our first 3 children's higher education (in state 4 yrs $100,000) and launched them into adulthood without student loan debt, with the understanding they ...
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3answers
7k views

Can someone just forcefully take over a public company for its market price?

I am working for a Fortune 500 company. A recent drop in our stock price caused, let's say, some startle. Following that, one of our executives said in a global Q&A session in response to one ...
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2answers
113 views

Whats my worth of stock after I do the following [closed]

If I buy H stock at $100 then buy another stock at $200. Will my stock then be worth $150? Please don't take me back to college in the answer. Lol
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0answers
147 views

How do companies benefit from increase of shares value in the stock market? [duplicate]

I am completely ignorant on the subject and am trying to understand the fundamentals of finance in order to better understand some topics for example how the exchange market works. This is what I ...
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1answer
62 views

Research and Development Costs Not Shown on SEC Income Statements

I'm new to analyzing company financial statements (specifically, Income Statements). I noticed that some companies do not have Research and Development costs reported on their Income Statements, and I'...
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1answer
62 views

Income Statement Question -- Confusing Operating Expense Calculation?

I'm completely new to looking at company financial statements for analysis, so please correct any misconceptions I have here. I'm having trouble with reading an Income Statement. I am looking at the ...
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4answers
2k views

Why do people who sell something on a marketplace ever allow the price to go down?

This question really goes for any kind of "financial instrument" or whatever the generic term is, but I'm going to mention Bitcoin as an example. I fundamentally don't understand why, once ...
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1answer
99 views

Am I using the right method for this compound / simple interest problem with annual deposits?

I am trying to solve the following exercise: A bank account is opened at the beginning of the year 2013 by making a one-off deposit of £1000. A further deposit of £200 is made at the beginning of each ...
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1answer
81 views

How does interest rate influence the strength of the currency?

Here's a statement that spawned the question: "A rising interest rate means higher returns for investors, increasing the demand for that cutrency and therefore its value". Here's a ...
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1answer
59 views

The term "debt financed" as a source of payment for doing the Acquisition, is it?

I have a question for word phrase "debt financed" in Acquisitions but for my best understanding, I would like to ask a question on random example: Let's say we have three companies: CompanyA,...
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1answer
194 views

Cash flow Analogy

I want to understand and/or get a more intuitive feeling of different financial terms from financial statement by comparing it to persons salary. I have tried to come up with an analogy, as to how I ...
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0answers
40 views

Why do some market makers have many Market Participant Identifiers (MPIDs)?

I noticed that some (most?) market making firms have many Market Participant Identifiers (MPIDs). For example, from the list of NASDAQ market participants1: "Jane Street Capital, LLC" has ...
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1answer
213 views

Why do companies issue depositary shares for preferred stock instead of issuing preferred stock directly?

I was looking at the list of US Bancorp preferred stock issues. Among them are: Depositary Shares Each Representing a 1/1,000th Interest in a Share of Series B Non-Cumulative Perpetual Preferred ...
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2answers
225 views

Does credit score show you are a responsible borrower or a profitable client for the bank?

This might be a silly question, but I'm trying to wrap my head around how the US Credit Score works. I'm from Europe. Credit Score represents creditworthiness, which as I understand it, represents a ...
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1answer
88 views

Why technology companies don't report high net income from the use of GAAP?

The article GAAP vs. Non-GAAP: What's the Difference? says: Technology companies have been large users of non-GAAP adjustments as these companies typically don't report high net income from the use ...
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1answer
56 views

Coupon payment intervals in bond names

Consider the name of a bond: "American Telephone & Telegraph Co. Convertible 4½s, due 1933"†. I have some questions about the coupon payment interval information contained in the name: ...
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1answer
73 views

Why do some stocks have a pre-market value whereas others do not?

Why do some stocks open at 4 AM and have a pre-market value whereas others do not? For example, AAPL opened at $114 (pre-market) but MSFT still has its Friday close value.
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3answers
8k views

In what way does technical analysis involve astrology and reading tea leaves?

I am considering whether or not I should learn technical analysis after fundamental analysis. When I searched for "technical analysis" on internet forums to gauge whether or not it is ...

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