India is following the direct rate in Forex markets, i.e. foreign currency is fixed and home currency is varying. When we go to a shop and ask for the price of a product he tells us only one rate for the product, because the trader is only selling the product to consumers. He is not buying from consumers. Whatever rate the seller tells is implied as his selling price for the product. Even though the consumer is buying a product, what he pays to the trader is the selling price of the trader. Foreign Exchange market is different from this market in the sense that the authorized dealer buys as well as sells the foreign currency. Banks and financial institutes authorized by RBI to sell the foreign currency are called as Authorized Dealers. When you ask the rate of a foreign currency from an authorized dealer, he quotes two- way rates. It means that he quotes the rate for buying as well as selling the foreign currency. Example US$ 1=Rs.45.2200,45.2300 In this rate, the authorized dealer will buy US$ at the rate of US$ 1=45.2200 and he will sell the US$ at the rate of US$ 1=Rs.45.2300. The difference between the buying and selling price is his profit margin. Here, the dealer will ...

The control of the modern corporation is frequently placed in the hands of professional non-owner managers. We have seen that the goal of the financial manager should be to maximize the wealth of the owners of the firm and given them decision-making authority to manage the firm. Technically, any manager who owns less than 100 percent of the firm is to some degree an agent of the other owners. In theory, most financial managers would agree with the goal of owner wealth maximization. In practice, however, managers are also concerned with their personal wealth, job security, and fringe benefits, such as country club memberships, limousines, and posh offices, all provided at company expense. Such concerns may make managers reluctant or unwilling to take more that, moderate risk if they perceive that too much risk might result in a loss of job and damage to personal wealth. The result is a less-than-maximum return and a potential loss of wealth for the owners. How do we resolve the agency problem? From this conflict of owners and managers arises what has been called the agency problem-the likelihood that managers may place personal goals ahead of corporate goals. Two factors-market ...

Role and responsibilities of a finance manager have undergone a remarkable transformation during the past four decades. Not too many years ago, finance manager had a very limited role in a business enterprise. Finance manager was responsible only for maintaining financial records, preparing reports on the company's status and performance and arranging funds needed by the company so that it could meet its obligations in time. Finance manager, as a matter of fact, was regarded as specialized staff officer in the company concerned only with administering sources of funds. Finance manager was called upon only when his specialty was needed. For example, when the company experienced the problem of dearth of funds, the management expected the finance manager to locate suitable sources of funds and procure additional funds. However, the finance manager transcended his traditional role of garnering external funds for the enterprise following technological changes in major industries, increased business complexities, tightening money market conditions and despondent state of stock market, and has now become part and parcel of general management. He occupies the role of an executive who ...

Finance is the study of money management, the acquiring of funds (cash) and the directing of these funds to meet particular objectives. Good financial management helps businesses to maximize returns while simultaneously minimizing risks. Financial management is an integral part of overall management and not merely a staff function. It is not only confined to fund raising operations but extends beyond it to cover utilisation of funds and monitoring its uses. These functions influence the operations of other crucial functional areas of the firm such as production, marketing and human resources. Hence, decisions in regard to financial matters must be taken after giving thoughtful consideration to interests of various business activities. Finance manager has to see things as a part of a whole and make financial decisions within the framework of overall corporate objectives and policies. Let us discuss in greater detail the reasons why knowledge of the financial implications of their decisions is important for the non-finance managers. One common factor among all managers is that they use resources and since resources are obtained in exchange for money, they are in effect making the ...

Credit cards have been vilified by many as being the surest way of getting into irreversible debt. However, this notion and belief is not always true. It is possible to actually save money with credit cards. This is nevertheless only possible if you know how to go about saving money with credit cards. Here are a few time-tested ways in which you can still use your credit card and manage to put some cash into your pocket as well. Rewards are a popular offer given by most credit card providers. They offer the card user certain rewards for using the card to purchase or make payments. These rewards come in the form of cash rebates, travel service discounts and so on. Making sure you use only reward cards means you will be getting at least some value back for the money spent. However, this is just one aspect to reward cards. In addition to choosing only the credit cards that give rewards, you have to also be careful not to take up too many reward cards. The rationale behind this is that if the rewards are spread out over a number of cards, then you will not be able to maximise on these rewards. By taking out maybe one or two reward cards, you can consolidate all your purchases and in ...

There are many types of credit cards which are used by different types of customers and account holders. Mostly business personnel use credit cards which are convenient in their use and which suit businessmen. Similarly students would use student credit cards and a layman will use general purpose cards. There are some most used types of credit cards. For example Interest Credit Cards are mostly used by businessmen and company CEOs because there is a charge of interest if credit card payment has not been annulled in time. Another important and commonly used type of credit cards is those in which 0 APR (Annual Percentage Rate) is charged as its introductory price similarly cash cards are also used which are just like cash but in the form of plastic card. It is because the cash card holder has paid the cash price of that card and he can use it as cash now. In this card the annual percentage rate is always zero and it is used by millions of people around the globe. There is another kind of credit cards which are called Payments Card. A payment card is one with which a person can make the payment of something and they are also widely used in the business field and in different areas ...