Category: Uncategorized

Detecting Signs of Worsening Financial Ratios

Banking and finance are a bit difficult to understand because there are a lot of terminologies and computations that one needs to get through before landing a career on this discipline.

Among these are the financial ratios, which indicate the performance and financial capacity of a bank or financing institution.

Computing this ratio enables financial authorities to compare an institution to other institutions. It can also be used to predict a bank’s situation like bankruptcy and the like.

Financial ratios are usually based on the financial statements of a bank or establishment. And these documents are not always available for everyone who wants it. In the perfect world, banks and other financial institutions provides these reports to all their members. Continue reading →

Understanding Financial Behavior and FInancial Psychology

Remember the market crash in the 17th century, junk bonds in the 1980s, and Internet stocks in the 1990s? These are phenomena that are cited by theorists to explain the financial behavior of most investors.

It is claimed that market prices can be affected greatly by the decisions of irrational investors.

The same belief is claimed by Adam Smith in his non-fiction book “The Theory of Moral Sentiments” which has two major observations that associates financial behavior to the result of investors’ decisions.

These are: 1. “Investors (and people in general) make decisions on imprecise impressions and beliefs rather than rational analysis.” You have seen this every day. Continue reading →

Debt Management and Debt Strategy

You may be wondering why there are so many people who are having problems with their debt. That is primarily due to the fact that these people have lacked debt management.

In layman’s term, debt management is as its name suggests taking responsibility over his or her debts. But how do you really manage your debt?

Basically, all people who commits with debt providing or financing companies have the same purpose and that is to use the money or property to improve their life and pay for it accordingly. But there are just some unavoidable circumstances that can keep these things from happening. Continue reading →

Credit Score : How to Measure It

Did you know that your capacity to pay loans and borrowed monies are also being scored? Yes, you are being scored by a governing agency for banks and financial institutions.

This score is being compiled along with other creditors and debtors’ files in a data bank that is later being published for auditing and back checking purposes. With the availability of such information, the job of credit card companies and other lending establishments are made simpler.

They no longer need to go through manual back checking on their applicant debtors but simply run the names on the data bank of delinquent and low credit score accounts. If a match is found, the applicant is immediately denied and if there is no hit for the applicant, the application is approved almost automatically. Continue reading →

Powerful Ways to Implement in Cost Reduction Strategy

Before you invest on something, you would surely want to know how you can reduce costs on it. That is a common thought in the market, which is why there is a formulated cost reduction strategy earlier in the market for you and the many yous who are also in the look for the most practical ways of investing over something.

But how does this cost reduction strategy works really? This strategy works not only to reduce costs but also eliminate and modify some of the unnecessary manufacturing activities that increase the operating expenses of an investment.

Here are some of the manufacturing parameters that you may want to use the cost reduction strategy on: Continue reading →

Key Principles on Asset Allocation Strategy

Everyone just wanted to become an asset-generating investor, but there are only a few chosen ones that can actually become one. Why? Because being an investor is not all about skills, it also requires the attitude to be an effective asset-making investor.

You see, investments do not always turn out to be good. There are good times and there are also bad times when it comes to investment.

What you should do is use the best strategies the industry offers like an asset allocation strategy or the like. This strategy is used to balance the risk that an investment may present over a foreseen reward by simply adjusting each assets percentage value. The adjustment will basically depend on your goals, investment time frame, and tolerance. Continue reading →