Companies need to face various types of risks during their operations. Most of these risks accompany adverse implications for a company and cause damage to its operations. Therefore, identifying and dealing with these risks promptly is crucial for a company’s success. These risks may come in various forms and from …

When companies and businesses start operations, they may not be profitable. However, once they develop a customer base and good supplier relationships, they can earn more. These are things that come due to a company’s reputation, often termed as goodwill. Developing a good reputation is crucial for a company’s success …

Operational risk represents the risk that comes due to uncertainties and hazards in a company’s operations. Operational risk is a type of business risk and can impact a company’s profits adversely. This risk exists for every business and company. There are various operational risks that companies may face, one of …

There are various risks that surround any company. Some of these may come from external factors, while others may relate to internal operations. For external risks, there are five areas that may affect the risks faced by a company. These include political, economic, social, technological, environmental, and legal matters. Among …

What is Corporate Governance? Corporate governance represents a system of rules, practices, and processes which dictate how companies should operate. Technically, corporate governance can be defined as “the system by which companies are directed and controlled in the interests of shareholders and other stakeholders”. The control and direction may come …

Most businesses start as sole proprietorships. However, once they face limitations, such as capital or expertise limitations, they may convert into partnerships. Partnerships are one of the oldest business structures. They have several advantages and disadvantages. However, it is crucial to understand what these are first. What are Partnerships? Partnerships …

Businesses can come in various forms and sizes. For example, these may include sole proprietorships, partnerships, corporations, and many more. There are even more classifications in each type. However, the most basic form is still a sole proprietorship. Sole proprietorships have existed from the beginning of time. These businesses have …

What is a Dividend Reinvestment Plan? A dividend reinvestment plan (DRIP) represents a plan that companies offer to shareholders. Through this plan, shareholders can automatically reinvest their cash dividends in additional shares of the company on the dividend payment date. It may also refer to other programs set up by …

What are Ordinary Dividends? Ordinary dividends represent the distribution of a company’s profits to its shareholders after an accounting period. For shareholders, dividends are one of the two primary returns they get on their investment. There are other types of dividends as well, such as special dividends. However, ordinary dividends …

Options are financial instruments that derive their value from underlying securities such as stocks, bonds, etc. These are common in options contracts which offer buyers the opportunity to buy or sell the underlying asset in the future. However, it does not oblige them to do so. Instead, they get the …