What are Forward Contracts?
In this article, I will introduce a financial derivative called Forward Contracts. What are forward contracts? Forward contracts are used by companies to take advantage of a speculation.
A forward contract is an agreement between two parties to buy or sell a specific asset at a certain future time for a certain price agreed today. It costs nothing to enter a forward contract. The party agreeing to buy the underlying asset in the future assumes a long position, and the party agreeing to sell
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How FED Controls Money Supply
The Federal Reserve of the US, or simply FED, is the most powerful banking institution in the world. It controls the banking and economic system of the most powerful country in the world - United States of America.
In 1913, the US Congress established the FED. The Fed, although the central bank of the United States, is not really one bank. It consists of twelve regional banks, so that no one region of the country can unfairly gain an economic advantage. The Fed is run by a seven-member team
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Best of the Best Companies in 2009
I am a fan of the word “best”. Just before the year ends, Fortune Magazine released it’s Best of the Best Companies in 2009.
Which of the companies are considered best to work for? Which of the companies are the best when it comes to revenues? Which if the companies are considered the best among all other companies? Definitely, you would like to know it too.
Here are the list that Fortune Magazine released. Given the chance, I definitely would like in one of these companies
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Financial Ratios You Need to Know When Buying a Business
If you want to become educated on business matters, then one of the things that you should know is the financial statement of companies. You need to know how to read numbers because numbers don’t lie.
Financial statements are the health check up of businesses. Just like humans, businesses can be subject of certain “diseases” that you should know before it’s too late. Here are some of the financial ratios that you should know to examine the health of a business. This
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What Caused the Great Depression?
Filed under: Finance Concepts, On the Spotlight, Personal Finance
We’ve talked about the current recession before and we know that the main thing that triggered it is the subprime mortgage crisis which originated from several investment banks. But what about a more severe economic downturn called depression?
According to Wikipedia:
In economics, depression involves sustained, long-term downturn economic activity. While recession is seen as a part of a normal business cycle, depression is a sustained recession. It is characterized by abnormal increase
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How to Fight Inflation
Inflation is one of the reasons why do you need to invest your money. In economics, we have known inflation as the general increase in prices of commodities. The higher the inflation, the lesser the value of our money. Inflation degrades the value of our money. Your money last year cannot buy the same amount of goods now.
WHAT CAUSES INFLATION TO INCREASE?
Increase in oil prices. Oil is a very important commodity in the world because it is one of the raw materials of every company used to
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Opportunity Cost Analysis
Opportunity cost analysis is one of the main foundations used in making financial decisions. In strict accounting terms, opportunity cost is not really a cost or an expense. However, it maybe relevant in making decisions with financial repercussions.
Wikipedia says that opportunity cost has been described as expressing the basic relationship between scarcity and choice. When you are torn between making decisions with mutually exclusive results, then one benefit should be sacrificed and
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Why do you need to borrow money?
Well, aside from the obvious reason that you need it, whether for capital or other expenses; borrowing money can help you to manage your finances if you know how to leverage debt. That is to know the difference between good debt vs. bad debt.
In this article, I will expound more on the idea of debt leveraging by using other people’s money instead of yours. Good debt makes the rich gets richer. There are very few entrepreneurs who did not borrow money to grow their business.
If you can
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