Compounding is a process of finding the future value of cash flow by applying the concept of compound interest.
General Equation of Compounding: F(n)=P(1+i)^n
Where (1+i)^n=Compound Value Factor, i=rate of interest, n=no. of years,
P= present value
Discounting is the process of calculating present value of cash flow.
Sinking Fund is a fund which is created out of fixed payments each period to accumulate to a future sum after a specified period. For eg. Company generally creates sinking funds to retire bonds (debentures) on maturity.
Gearing is the ratio of debt to equity, usually the relationship between long-term borrowings and shareholders' funds.
Goodwill is any surplus money paid to acquire a company that exceeds its net tangible assets value.
Reserve is the accumulated and retained difference between profits and losses year on year since the company's formation
Blue Chip is common stock of a nationally known company that has a long record of profit growth and dividend payment and a reputation for quality management, products, and services
PECULIAR FINANCIAL WORD
SLASH FUND
Money spent for payment towards the influential persons for the benefit of organization.
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