What is Capital budgeting? Give an example of a capital budgeting decision.
Capital budgeting is the process a business undertakes to evaluate potential major projects or investments. Construction of a new plant or a big investment in an outside venture are examples of projects that would require capital budgeting before they are approved or rejected. As part of capital budgeting, a company might assess a prospective project’s...
Some tips for preparing FP&A Interviews
EXTRA- Few tips for Technical round of interviews in FP&A Since FP&A roles and responsibilities vary from industry to industry, students are advised to have a brief knowledge of the following before an interview: ● Understand the industry and its business and operations ● Know the business model of the company and its geographical spread...
What Types of Businesses Use Financial Modeling?
Professionals in a variety of businesses rely on financial modeling. Here are just a few examples: Bankers use it in sales and trading, equity research, and both commercial and investment banking, public accountants use it for due diligence and valuations, and institutions apply financial models in private equity, portfolio management, and research. Note: You can...
What Is a Hurdle Rate? Why is it important?
A hurdle rate is the minimum rate of return on a project or investment required by a manager or investor. It allows companies to make important decisions on whether or not to pursue a specific project. The hurdle rate describes the appropriate compensation for the level of risk present—riskier projects generally have higher hurdle rates...
What is the use and purpose of Excel Pivot Table, VLOOKUP, HLOOKUP, SUMIF, and Index Match?
● Pivot Table is an interactive way to quickly summarize large amounts of data. It is used to summarize, sort, reorganize, and group. It allows us to extract the significance from a large, detailed data set. ● VLOOKUP: It is a function that makes Excel search for a certain value in a column, to return...
What is the key ratio for measuring profitability?
Key ratios for measuring the profitability of the company are ● Return on Equity ● Gross Profit margin ● Net Profit margin ● Earnings per share Bookmark...