What is Real Estate Project Finance? Project finance is long-term financing of an independent capital investment, which are projects with cash flows and assets that can be distinctly identified. Real estate project finance is a classic example. Other examples of project finance include mining, oil and gas, and buildings and constructions. Real estate project finance cash…
What Are Financial Ratios? Financial ratios are calculations that compare two or more figures from a company’s financial statements to measure performance and financial health. Analysts, investors, and managers use financial ratios to understand how well a company can meet debt obligations, generate profits, and use resources effectively. Ratios also make it easier to compare…
What are Proceeds? Proceeds refers to the cash received from the sale of goods or assets during a particular period. The total is obtained by multiplying the quantities sold by the selling price per unit. The proceeds received before any deductions are made are known as gross proceeds, and they comprise all the expenses incurred…
What is a Credit Score? A credit score is a number representative of an individual’s financial and credit standing and ability to obtain financial assistance from lenders. Lenders use the credit score to assess a prospective borrower’s qualification for a loan and the specific terms of the loan. Essentially, it is used to determine the…
What is Leverage? In finance, leverage is a strategy that companies use to increase assets, cash flows, and returns, though it can also magnify losses. There are two main types of leverage: financial and operating. To increase financial leverage, a firm may borrow capital through issuing fixed-income securities or by borrowing money directly from a…
Definition of Bullish and Bearish Professionals in corporate finance regularly refer to markets as being bullish and bearish based on positive or negative price movements. A bear market is typically considered to exist when there has been a price decline of 20% or more from the peak, and a bull market is considered to be…
What is a Bank Line? A “bank line” or a “line of credit” (LOC) is a kind of financing that is extended to an individual, corporation, or government entity, by a bank or other financial institution. This type of credit is different from term loans, such as housing mortgages or car loans. Usually, the borrowers…
What is a Dividend? A dividend is a portion of a company’s profits that is paid out to its shareholders. When a company accumulates retained earnings, management can choose to reinvest in the business to fuel growth, pay off debts, or save for future needs. Alternatively, management can decide to share some of these profits…
What is Top-Down Budgeting? Top-down budgeting refers to a budgeting method where senior management prepares a high-level budget for the company. The company’s senior management prepares the budget based on its objectives and then passes it on to department managers for implementation. Sometimes, the managers may put forward suggestions for the budget before the budget…
