Angle investors are the high networth individuals who invest in the early stage companies or start ups. Angle investors are high rich people who invest in the equity of the company. They are the experts in some area because of their experience so before their investment in the startups they will study about the chance of success of the business. Whether startup can get good customer and can attract the market or get the return on investment.after the proper study angle investors will invest the funds in the equity share of the business. Angle investors are the experts in some areas so they will give the good suggestion to the management of the company to make good decisions. Angle investors will make the investment for the long term, wait until the success of the business. When comapany get good return they will sell their part of share and get good return. For the startups these investors will give fund along with good suggestion for the decision making in the business.

Retained earnings is the amount that comapany keeps in itself after paying dividends which is from the profits earned by the comapny. When comapany makes good profit I will give dividend after that if the fund left it will convert it in to the retained earnings which the company can use such fund in the future companies needs. If comapany is making profit from many years it will have good retained earnings which company can use such funds for capitalisation, purchase of new assets, purchasing new company or merging with other companies. When comapany has good amount of retained earnings it can use such funds for future uncertainty in the business.if business one day face the losses the company can use this fund for the business. If company face the funds problem for any purchase this fund can be utilised. As innovation is important for any kind of business from the profit business can spend retained earnings on the innovation or researches. This fund will help the company in uncertainty times.

Joint venture is the entity created by two or more companies for the particular purpose, the companies will put the fund in the beginning and in the future days they will share the profits of the entity accordingly. The joint venture may happen one comapany may good in technology so it will help the another company. By adopting joint venture one comapany from other country can produce with the company and enter in to the market. The comapany can increase its market share by joining with other company by joint venture. Joint venture can help when new innovative products are offering in the market where high technology is needed where companies can share their technology. Joint venture will reduce cost by economies of scale and increase the financial position of the entity. By this new technology can be brought in to business and can attract new customers to the business.joint venture will help the companies to face the tough competition in the market.when both companies come together for the particular purpose that can share their infrastructure where it will help in reduce the cost.

Invesntory is the total of raw materials , work in progress and finished goods which company holds for sales in the future. Company will purchase the raw material and process on it and convert it in to finished goods and sell it in the market. But it requires time it lead to idle of resources. So comapany need to make the proper inventory management. Need to adopt the EOQ techniques so the ordering cost and the holding cost of the materials and damage on the material can be reduced. By adopting EOQ comapany can make order of how much required to company for a time. By adopting ABC analysis company can devide it’s rawmaterials in to 3 category according to that order can be placed and most important in production to campany can be given more importance. So the wastage of material can be reduced. So by following inventory management properly the cost of inventory and idle of resources can be reduced.

The business requires funds to purchase and sell the products, the fund which is required to run the day to day business is called working capital. If current liabilities removed from current assets then we can get the working capital. Total current assets of the business is called gross working capital, when current liabilities removed from current assets it is called as net working capital. So business need to maintain the liquidity position in the business to maintain the working capital. To manage working capital business need to manage its cash, Inventory, Receivables and payables properly. When inventory was purchased need to be sold as early as possible so the idle of fund can be reduced. Business need to collect the receivable in time. And should pay payables in time. Should have more current assets than the current liabilities.

When private company wants raise fund from public will go for the initial public offering. In IPO the company need get minimum subscription of shares from the public. If the IPO was not able raise minimum subscription then the ipo will fail. So to assure that the underwriter will guarantee the company to subscribe for the shares if the shares were not purchased by the public. Underwriter will come with agreement with the company that if ipo under subscribed then underwriter will purchase such shares. Underwriter will help the company to fix the price for the selling of share in the ipo. Even helps in meeting requirement for the ipo.

Investments are made on the perspective to get the gain by over the period of time. Aim of investment is to increase in wealth by keeping it safe. There are many ways one can invest his wealth but need to calculate it’s risk and return. The investment must have the qualities of keeping the capital safe along with liquidity. Because when the need arise one can utilise it.

Qualities of good investments

Capital safety : The investment should have the quality of capital safety. The investment should not lose its value over the period of time. It should grow over the period of time.

Liquidity: The investors must in the position to use the investment when the need arises. The investment made by him should be liquid where it can be possible to convert in to cash easily.

Capital growth: The investment should grow over the period of time as the investors can get good return for their long term holdings.

Must consider time value of money : The return which the investor get from the investment should consider the time value of money.

Profitable: The investment need to give good profit in return to the investors for making the investment.

Securatization is the process of convertion of debts in to the marketable securities. As banks gives loans for many purposes, by giving loans the cash will get outflowed but inflow will be after the some years. So banks may get liquidity problems,may not able to give loans to other people. To overcome from this the securatization will help the banks. as loans are given by banks on mortgage the banks will sell such receivable to Special purpose vehicle and get the cash from SPV. Special purpose vehicle will appoint credit rating agency to rate the different loans. The SPV will convert such debts in to marketable securities, where the investors can invest in such securities. Based the rating given by the credit rating agency the investors will invest in the securities. The investors will get the interest for their investment.

Benifits

1. Helps banks to maintain liquidity
2. Helps banks to give new loans where bank can generate more interest
3. Investors can invest according to the credit rating and get returns

Venture capital is the form of Financing where venture capitalists will invest funds in startups and starting stage companies which has potential to do good in future.Venture capitalists will invest in equity share of the companies.where it will be high right risk but with the analysis of them they will invest and analyse the good return in future. Venture capitalists will invest in well diversified and new product company which is producing new product which may have demand in the market. Venture capitalists will advice the management to take good decisions to make company successful.

Ways in which venture capitalists finance the company

1. Venture capitalists may purchase equity share of company
2. Investing in debentures of the company
3. Giving the loan to the company

Stages of venture capital Financing

Seed stage: Here company just has the plan or the idea of the product but requires fund to bring that idea in to actual product and make the market research, demand forecasting.

Startup stage: Here company need fund to make the advertisement of the product, where the market research and demand analysis has already completed.

First stage: Here Business goes for actual production of products and bring it in to the market. For production need the fund.

Second stage: Here business go for the more and more production of products and bring new products for the market.

Bridge stage: Here Business already matured and ready for merger, aquision and go for ipo. So need fund for merger and ipo.

Exit strategy for venture capitalists

1. Initial Public Offering
2. Merging with other companies
3. Acquired by other company
4. Purchased by other venture capitalists
5. purchased by company owner

Debenture is the loan or debt instrument which is issued by Government and Corporates to raise the fund. Debenture are issued on fixed interest rate. Their value is based on credit rating. Based on credit rating people will purchase the debentures. Debenture holders are the creditors to the company and they get interest on their investment in the company.

Types of debentures

Secured debentures: secured debentures are backed by the assets security. They are like mortgage loan. For such debenture particular assets will be act as security.

Unsecured debenture: Unsecured debenture are not secured by any assets they are purchased based on companies credit worthiness and reputation.

Convertible debentures: Convertible debentures are the Debentures which allow to convert to Equity shar. Where debentures holder will become equity share holder.

Non Convertible debentures : Non Convertible debentures are the Debentures where it is not possible to convert it into equity share.

Redeemable debentures : in this types of debentures the time of repayment of loan is mentioned and when investor can get back his invested money is mentioned.

Irredeemable debentures : The debentures will not have time of repayment. These are long term debentures. These are repayable at the time of liquidation.

Bull and Bear is the indicators which shows the situation of the Market. Bull market refers to Market situation where price of shares are going up and expected move in uptrend. Where the country’s economy is good, employment rate is good and price of every marketable securities are in uptrend. This is called as Bull Market. Bear market is the situation where price of shares are falling down and expected to fall, Country’s economy is falling and unemployment rate is increasing. This is called as Bear market. In Bull market situation price of shares will go in uptrend and investors will purchase the more and more shares. In Bear market the price of shares are falling so investors take back their money from the market.

Right issue refers to the listed company or public limited company will raise the fund through issuing shares to the existing shareholders. In right issue existing shareholders can purchase the shares at discount or less than the market price of the share. The issue will be according to proportion of share held my share holder. The ratio will set by comapny, according to that shareholder will get additional share. In Right issue existing shareholder will be offered to purchase the share where it is his choice whether to purchase or not. The issue was done to raise additional fund for the operation of the company. In right issue the shares are issued at discount to shareholder.

Stock split is decided by the company where the shares of the existing shares will be divided in to more number of shares. The share split is done to increase number of shares in market, to bring liquidity in particular stock and to make stock to avail for retail investors to purchase. In stock split the shares will be divided according to ratio specified by the company.after stock split companies market capitalisation will remain same. The face value and market value of share will be divided according to ratio specified by the company.

Bonus share is issued by the company to its existing shareholders for free instead of cash dividend. Bonus shares are issued to capitalise the companies profits. In Bonus share issue company will convert the profits in to equity share and issue in free of cost to its existing shareholders. The issue of Bonus share is inthe form of proportion. Which is set by the company. According to share held by the shareholder proportion to that he will get the bonus share. The issue of Bonus share will increase the number of share in the market. To get the bonus share one need to purchase the share before the ex-dividend date.on the record date who has the share in their account such share holder will receive the bonus share. The reason to issue the bonus is convertion of profits in to capital.

Human resource is an majore resource for a company, from forming up plan to its implementation the each and every employees work will give contribution. Satisfied employees will always become the reason for the companies success. When company give good salary, job security and other related facilities the employees will be satisfied. Even timely motivation and promotion is needed. So some of the companies will give free share to employees to give them the feeling of owners of company. When the employees are satisfied they can give their full efforts to the companies success as companies success will become their own success.

Debentures and Bonds both are debt instruments which are issued to raise funds. One who purchase this instrument will be the creditor or loan giver and issuer will be debtor or loan taker. Debentures used to raise funds by companies and they will give fixed rate of interest. These instruments are purchased on the basis of their credit ratings. Some types of debentures can be converted in to shares by the company. companies will issue debentures for the purpose of raising the fund. Bonds are debt instruments which are secured issued by government, corporates to raise the funds. Bonds has the Asset as the security. Bonds will pay interest as the return to bond buyer. The bond issuer will be the loan taker and bond purchaser will be the loan giver.

Investment and speculations has the common objective to get gain from an asset,but the way and the methods are different.In investment the investors need to wait for longtime where as speculators try to make money in short time.Investment has the long term objective on the assets, securities, buildings etc to increase in the value. Where in speculation the profit or gain will be depends on the change in the price of assets in short time.

As share market is volatile market the price of the shares will be chage every day. It may be negative or positive. There are many several issues which can impact on the share price. It may be internal or external. What ever it will affect share price. When company declares it’s quarterly results it will always has impact on its share price. Majore parts are turnover,profit, reserve, expenses etc. If companies sales are improving and company has mentioned increase in profits it may positively impact on share price. If profits and sales are negetive it may negetively impact on share price.In balance sheet Debts are growing it will affect the share price. When company brings new products to market,if such companies competitors are becoming strong it will affect the share price.In external if countries economy is in depression it will negetively hit the price.if mansoon is good in country it will be good news for market of mansoon if bad it will negetively hit the Market. when government bring new schemes which may benifitial for corporates then market will get possitive sign from it, hope will increase.As share market get highly impact from news it act quickly to each and every aspects.

As companies need fund for the business operations it will raise funds from equity and debentures. As equity shares will sold in market by bringing IPO and FPO. Debentures will be sold in market and raised fund. Equity shares holders will get the dividend as the return on investment. Debentures will leave fixed rate of return. if the business is running very well the share price will go up in market and there is chance of dividend so investors in equity will get capital appreciation along with dividend. But for the debenture holder what ever will be business condition they will get interest payment. If business is running in loss equity investors capital may depreciate in market. what ever the condition the business need to pay the ii interest for the debentures. But the payment of dividend will be wish of the company. Equity share holders are the owners of the company and Debenture holders are the creditors of the company.

Money is the very important factor to start the business and run it. Companies need fund in each step of its activities. So companies will look for different ways where company can get the money along with that interest or cost of capital need to be taken in consideration.

Share capital : Share capital is the fund that is brought by the owners of the company. In addition to that company can get investors who will invest in companies capital. By issuing equity and preference share capital company can get the funds. Company can bring Ipo and Fpo in market where fund can be raised.

Loans from Banks : To meet the working capital company can get the long and short term loans. But need to pay interest on such loans.

Venture capital : when campany has potential to succeed in future company can contact venture capitalists from them fund can be brought in to the company in the form of equity or debentures.

Debentures : Company can issue the debentures in the market. According to credit worthiness the fund can be raised and interest can be fixed. By issuing debenture company need to pay interest to debenture holders.

Bonds : Company can funds from issuing bonds in market where the company need to pay the interest. But for such bond the assets need to be backed as security.

Previous profit: Using the previous years profit will be great idea for business where paying interest is not required.

Angel investors : By approaching angel investors company can raise the fund. They can invest in equity or debentures according to the safety of the fund they have in business.

Raising fund has many ways but companies need to consider the interest payments need to made on such fund. If interest payments are less it will benifitial for business.

Compansation is payment given by the companies to its employees for doing work.it may be in different form.they are as under.

1. Basic salary : Basic salary or basic pay is the payment made by the employer to its employees for working in the organisation or company. It may be according agreement .
2. Commission: Communication is the extra payment made by the employer to employee in percentage basis according to additional performance the employee. Commission is highly practiced in sales organisation where commission will be given by the company to sales person according to sales target reached by him.
3. Bonus : Bonus is the payment made by company as the sharing part of the companies profits with its employees. It may be because of the good performance from the employees.
4. overtime payment : Overtime payment is the payment made by company to employees for the additional work done by the employees.
5. Stock issuing : some of the companies will give its equity shares to the employees as appreciating work of the employees. And treating them as the owners of the company.
6. Allowances: It is the payment made by employees as to cover the expenses which are incurred by employees which are related to work.

Merger refers to two or more companies come together and form a new company. Merger is the corporate restructuring strategy to increase the profitability by reducing the cost, Mergers will help the companies to reduce the operating cost. In merger new entity will come in to existence.Merger may be of similar operating industry or from different industry according to the benefit companies will do the merger.By merging many companies supplychain will be utilized properly for the both the companies so the coat will be reduced.

Types of merger:

Horizontal merger: in this type Both the companies are from the similar operating industry.this type of merger will help in reducing the cost of production. Synergy will be high.

Verticle merger: Inthis type of merger companies are merged are from the different level of same industry.both companies are working in same industry but they are working in different level. One companies out put may be input for another company.

Conglamarate merger: In this type of merger companies which are working in different industry will come together and form new business. This will help in increase the brand value.

Benifits

Merger will help the companies to get Synergy,where cost of production will comedown. Cost of supply will be reduced.by merger company can enter in to other industry also.it will help companies to increase the market share.

Mergers are aimed to reduce the cost of production and cost of supply chain. Also to increase the market share of the company.