What is a Corporate Action? A corporate action is a move – enacted by a publicly-traded company – that encourages or furthers processes that have a direct impact on whatever assets the company issues. In other words, any actions (conducted by a company) that materially alter or otherwise change the company can be considered corporate…
What is a Corporate Reorganization Clause? A corporate reorganization clause is a provision contained in a company’s charter. The provision guides mergers and acquisitions, changes in assets or ownership structure, as well as changes in corporate control. The most common forms of corporate reorganization include mergers and acquisitions, financial restructuring, corporate buyouts, and divestitures. While many companies…
Managing Risks in Investment Banking The idea of managings risks in investment banking may seem pretty straightforward, but in order to cover the topic fully, let’s start with a brief overview of what it entails in the general sense. Risk management entails protecting financial assets against loss. In order to do this, risky behaviors or…
What is the National Bureau of Economic Research (NBER)? The National Bureau of Economic Research (NBER) is a not-for-profit organization established in 1920. It aims to produce high-quality and objective economic research for policymakers, businesses, and academia. Some of the most prominent economists are members of the NBER and contribute to its research database. Some…
What is Voodoo Accounting? “Voodoo accounting” is a slang term that describes a system through which profits for a company can be inflated. Unscrupulous and/or flat-out illegal methods of financial record-keeping are used to bolster a company’s bottom line, in large part, to make current investors happy and to attract new investors. Voodoo accounting may…
What is an Associate Company? An associate company, also known as an affiliate company, is a company in which a notable portion of shares is owned by a parent company. The portion usually lies between 20% and 50%. Ownership of higher than 50% of the stock legally turns it into a subsidiary of the parent…
What is Annuitization? Annuitization is the process by which the holder/owner of an annuity receives the payouts from it. The income from an annuity can either be paid out all at once, in a lump sum, or through regular distributed income payouts, in installments. An annuity is a type of insurance contract that is designed…
What are Not-for-Profit Organizations? A not-for-profit organization is an organization that focuses on a particular social cause, and all the money earned or donated is used in pursuing its objectives and meeting operational costs. Unlike for-profit corporations, not-for-profit organizations do not distribute their surplus revenues to their owners. Instead, they use the funds to pursue…
What is Streamlining? Streamlining refers to the improvement of the efficiency of a certain process within an organization. It can be done by automation, simplification of tasks, or elimination of unnecessary steps using modern techniques and technology. Streamlining means optimization. Companies strive for more efficient and automated operations to minimize costs and maximize profits. Streamlining…
What are Company Recovery Strategies? Company recovery strategies are the strategies undertaken to preserve a company and prevent its shutdown. The key objective of company recovery strategies is to quickly identify and address the sources of its problems that may lead to its collapse. The main task involved in company recovery strategies is to diagnose…
