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Business Organization and Finance

Management of Fixed Assets


 Fixed assets management is an accounting
process that seeks to track fixed assets for
the purposes of financial accounting,
preventive maintenance, and theft
deterrence.

Deprecation

 Deprecation is the decrease in the value of an


assets due to wear and tear or obsolescence.
It is calculated yearly to ensure realistic book
value for assets.

Insurance
 In law and economics, insurance is a form of risk
management primarily used to hedge against the
risk of a contingent, uncertain loss.
 Insurance is defined as the equitable transfer of the
risk of a loss, from one entity to another, in
exchange for payment.
 An insurer is a company selling the insurance; an
insured or policyholder is the person or entity
buying the insurance policy.
 The insurance rate is a factor used to determine
the amount to be charged for a certain amount of
insurance coverage, called the premium. Risk
management, the practice of appraising and
controlling risk, has evolved as a discrete field of
study and practice.
Uninsurable risks
Bad debts
Changes in fashion
Time lapses between
ordering and delivery
New machinery or
technology
Different Prices at different
places
Requirement of an insurance contract
 The insured must derive a real financial gain
from that which he is insuring, or stand to
lose if it is destroyed or cost.
 The items must belong to the insured.
 One person may take out insurance on the life
of another if the seconds party owes the first
money.
 Must be some person or the item which can,
legally, be insured.
 The Insured must have a legal claim to that
which he is insuring.


Finance Of States
 Country, State, city or municipality finance is
called public finance. It is concerned with:

A.Identification of required expenditure of a


public sector entity.
B.Source’s of that entity’s revenue.
C.The budgeting process.
D.Debt issuance (municipal bonds) for public
works projects.


Financial Economics
 Financial economics concentrates on influences
of real economics on the financial ones, in the
contrast to pure finance.

 Financial economics tells us the interrelation of
financial variables, such as prices, interest
rates, and shares, as to those concerning
the real economy.

Financial Market and Instruments
 Commodities - Commodity markets are markets
where raw or primary products are exchanged.
These raw commodities are traded on regulated
commodities exchanges, in which they are
bought and sold in standardized contracts.

 Stock- A stock market or equity market is a public
market (a loose network of economic
transactions, not a physical facility or discrete
entity) for the trading of company stock (shares)
and derivatives at an agreed price; these are
securities listed on a stock exchange as well as
those only traded privately.


 Bonds: The bond market (also known as the debt,
credit, or fixed income market) is a financial
market where participants buy and sell debt
securities, usually in the form of bonds.

 Money Market Instruments: The money
market is a component of the financial markets
for assets involved in short-term borrowing and
lending with original maturities of one year or
shorter time frames. Trading in the money
markets involves Treasury bills, commercial
paper, bankers' acceptances, certificates of
deposit, federal funds, and short-lived mortgage-
and asset-backed securities.
 Derivatives: A derivative is a financial
instrument - or more simply, an agreement
between two people or two parties - that has a
value determined by the price of something else
(called the underlying).It is a financial contract
with a value linked to the expected future price
movements of the asset it is linked to - such as a
share or a currency. There are many kinds of
derivatives, with the most notable being swaps,
futures, and options.
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