Archive for the ‘accounting’ Category
Fair Value?
Take a deep breath. The market recovered from terrorist attacks, the falls of Enron, WorldCom and Arthur Andersen, soaring oil prices and one very expensive war. Can this sub-prime crisis really hold the market back? To answer this query, the cause must be examined.
Sub-prime loans are generally offered by lenders to customers with either no credit or a poor credit history. In most cases, these loans include adjustable interest rates. During the initial years of the loan, the interest rate will be low (as compared to fixed rate loans for the same customer) and fixed, effectively lulling the payer into a false sense of security. After this initial period, the rates generally revert to the prime rate plus a Read the rest of this entry »
No CommentsWelcome to My Accounting Laboratory: Today’s Experiment is Outsourcing
Wash your hands and put your lab coat on. Today’s experiment: Outsourcing an income tax return.
Outsourcing was presented to me as a cost savings alternative: wages in India are comparatively low to wages in the U.S. So, I’ve tried outsourcing with QuickBooks accounting and I’ve been pleased. Cost savings do result.
But what I discovered is that I am also saving time. And I have even less time than I do money (as for lack of money, I think that has something to do with having two teenagers and an eleven year old…)
And I can use more time very productively: marketing, meeting with my best clients, staff training, going to the beach more often, etc.
But outsourcing tax returns? Read the rest of this entry »
No CommentsFinancial Modelling
FINANCIAL MODELING
Financial modeling is a process of forecasting performance of a certain asset, using relationships among operating, investing, and financing variables. The central aim of all financial modeling is valuation under uncertainty: how to estimate the value of a security when its future trajectory, or the trajectory of the other securities or economic variables it depends on, is unknown. Usually, financial modeling requires a great deal of spreadsheet work.
Financial Modeling Application
ü Business valuation, especially discounted cash flow
ü Cost of capital or WACC
ü Modeling the term structure of interest rate and credit spread
ü Option pricing
ü Real options
ü Risk modeling
ü Portfolio problems
No Comments