If we assume that when it comes to relative value Gold is doing a better job of predicting what something is really worth, how does that translate into cost? On average a barrel of oil costs about 0.0668 ounce of Gold. This puts fair value of a barrel of oil at about 114 using the average, at about 85 using the low over the last 3 years (including the dip last week) and at about 135 using the high of .08 over the same period.
Why is modeling strategic risk for ICAAP so difficult? Perhaps one reason is that unlike Value at Risk (VaR) or Credit Risk, there is no agreed upon, accepted, unified framework or tool to measure, report or track the capital required to recover from a strategic misstep. What further complicates the capital estimation exercise is the fact that strategic initiatives and resulting challenges at each bank are different
Whether you deal with Angels, Venture Capital investors or your local banker as a small business owner you need to understand the documentation requirements of fund raising as well as the due diligence and pre-investment audit process. While the process is cumbersome and awkward the primary issue with small business owners is preparation, generating the [...]
In our previous post we covered the three basic inventory valuation models. We now illustrate a simple example of the average cost model in the table below:
Bought
Sold
Average cost per unit
May
5 units @ $20/unit
$20
Jun
3 units costing $20 each
Jul
10 units @ $18/unit
[(2x20) + (10x18)]/12 = $ 18.33
Aug
10 units costing $18.33 each
Sep
5 units @ $19/unit
[(2x18.33)+(5x19)]/7 = $ [...]
Inventory valuation models and profitability
In order to value inventory, there is a physical count of inventory that takes place at the end of the year which can be a tedious task. This is because even though a business may have an inventory where all the units are identical, the prices on these units could vary. [...]
Cash after financing costs
Cash Flow Summary
Jasmine and Co.
2010
Interest expense
-600
? Interest payable
0
Dividends declared
0
? Dividends payable
0
Cash paid for dividends and interest
-600
Cash after financing costs
15,000
Figure 8: Extract Cash flow Summary- Cash after financing costs
The next segment deals with interest and dividends. Jasmine and Co.’s has not paid any dividends and there is no change in interest payable. Only [...]
Commutation Functions
While our generation of actuaries grew up with continuous time mathematics, my first exposure to actuarial functions and actuarial mathematics came through a chapter on commutation functions. A computational tool for easing the mathematics associated with repetitive calculations I grew so hooked to them that even today I use them as my first pass [...]
Welcome to the new home of Learning Corporate Finance. Here are the top courses, pages and post views as of November 2010. Given the volume of posts we have now introduced a new Post Index feature that allows you to easily browse through all the posts and pages on Learning Corporate Finance without going [...]
1. ALM – Crash Course – Buy Now
2. ALM – Crash Course – Examples – Buy Now
