In this article we will discuss about the risk and return faced while financial planning of a company. Costing and Risk: The word 'costing' relates to the ascertainment of cost of capital from different sources like equity capital, preference capital, debentures, long-term loans etc. The most crucial decision of any company is involved in the formulation of its appropriate capital [...]
After reading this article you will learn about the Under-Capitalisation:- 1. Meaning of Under-Capitalisation 2. Causes of Under-Capitalisation 3. Effects 4. Remedies. Meaning of Under-Capitalisation: In the words of Gersrtenberg, "A company may be under-capitalised when the rate of profits it is making on the total capital is exceptionally high in relation to the return enjoyed by similarly situated companies [...]
Capitalisation is an important constituent of the financial plan of a business. In common parlance, the term 'capitalisation' refers to the total amount of capital employed in a business. In its broad sense, the term 'capitalisation' refers to the process of determining the quantum and patterns of financing. It includes the determination of not only the total quantity of capital [...]