A Keynote On Mutual Funds

 

The term mutual fund can be related to a form of trust that gathers and deposits investor’s money who share the initial aim of attaining a common financial goal. With regard to the main objective of investment, they further classify their takings into the different asset classes. Or otherwise say, this is a financial intermediary that professionally manages the pooled money assembled from a large number of clients.

Fund manager

  • Is the professional dealer of associated mutual funds.
  • Take important decisions with respect to the security choosing and proportional amount placing even though these decisions abide by strict guidelines and scheme model which are unique to the firm.

By doing so, they provide the revised economic scale benefits to the investors and thus enhance them with purchasing traded stocks or bonds at the much lower potential cost compared to directly involved in capital markets. In addition to this, one receives capital units proportionate to the share of money deposited by him. These units are a fine representation of scheme oriented asset ownership and liability with regard to loss limited to deposit amount.

Advantages

  • The power of resource pooling is the biggest strength.
  • Moreover, it offers small retailers the benefit of enjoying money management in the most professional manner and also lends the possibility to access otherwise impossible markets. This is all because of the small money deposit in the different mutual fund schemes.
  • Additionally, they offer a variety of purposeful fund scheme patterns for investment and so guide the client with choosing the right option for his investment.

Depending on the diversity in deposit objectives, the schemes can be broadly classified into asset-based fund categories like Balanced, Equity, Gilt, Bond, Liquid and so many more types of funds. Further subdivisions also exist in the form of mid-cap, sector, index, small-cap varieties of funds.

A few examples of mutual fund scheme

There are some schemes which are associated with the provision of providing protection for the risk-hesitant clients’ capital, whereas some other types provide with a scheme of investing in mid and small proportions for the market assets and thus encourage the aggressive clients by providing capital appreciation.

Setting up The Mutual Funds: This is basically a trust formed with the support of personalities like

  • A Sponsor or their group responsible for establishing registrations and promoting the firm
  • Trustees entrusted with the duty of holding properties for the unitholders
  • The AMC or Asset Management Company that deals with the effective management of deposited funds and securities.
  • And finally, the registered Custodian who confidentially keep hold of the various security schemes within his custody

It a must factor that, at least three-fourths of the board members should be independent and should never be on the sponsors’ board of the firm.

 

A Broader View Of Working Capital Management

Working capital means a company’s current assets minus their current liabilities. This factor is the essential one to judge the credibility and sustainability of a business. It maintains the balance of current assets for immediate requirement of cash and the current liabilities for the payment of the dues and obligations of the business.

The company’s management level needs to take care of the working capital requirements and the balance of this working capital function on the whole. This managerial strategy of managing it efficiently is called as working Capital Management. The goodwill of a business lies in the way the working capital balance is maintained will determine the company’s growth, profitability, and liquidity.

What is the purpose of working capital management?

The key factor of this concept is to optimize costs and reduce risks in a business. So let us look into the key considerations of how to accomplish this.

  • Vision and strategy for improving working capital: highly efficient organizations find the calculative economic benefits from improving working capital management by linking them to strategic goals. The support of executive level and their involvement for working capital optimization is the prerequisite for a reducing amount of cash invested in a business.Standard financial transaction and centralization will prove the efficiency of the business. Also, there should be a cross-functional approach to all the components.
  • Analytics and measure to enable working capital management: finding out the relevant date and using the actual components is the basis for a proper working capital decision making. Best practice practices are from the use of data through ERP systems which gives relevant and actual data calculation which are maintained on a regular basis. Also, the exact tools of business analytics are used for finding the components of working capital assessment. Also, the employees of the company are educated to use the various metrics and measures to calculate working capital.
  • Performance management principles and measuring process improvement: like the importance of calculation, the continuous process improvement of the principles and practices are also equally important in working capital decision. This involves continuous and quality procedures. Maintain a quality in the steps of process improvement from the beginning is a key to proper working capital management.
  • Information technology strategy and application: every business takes that real form with the use of proper technology features that help in tuning the business in easy ways. These help for self-understanding the business implication for better task implementation.

Thus the role of working capital management is that factor which completes any business strategy.

 

Importance of a certified business appraiser

 

Every business has its own reasons for valuation; for example, you may want to sell it or there may be a change in ownership or addition of new owners or even expansion plans. Whatever the reason for business valuation it is crucial that you choose the right business appraiser.

If you want an accurate picture of the state of affairs in your company you must ensure that you choose only a certified appraiser and no one else. Here are a few reasons why no one should ignore this important aspect of business valuation.

Prejudices of noncertified appraisers

When you seek advice on appraisals from a real estate agency or a realtor their feedback in most cases will be biased based on their needs. While this may be the cheap and easy way of evaluating your business worth it certainly is not the best. These realtors will often quote prices based on their individual goals. For example, they may delay or hasten a sale in accordance with their cash flow; that is, if they need urgent finance they may push you to close a deal even if it is not in your best interests or they may urge you to hold on for better rates when you are in dire need to sell. They will fail to understand your necessities and give a rough estimate which will be far from accurate.

The significance of a certified appraiser

On the other hand, a certified business appraiser follows certain guidelines and procedures to evaluate your business. Even the court of law recognizes valuation from a certified appraiser and not anyone else.

These professionals understand the exact motive for your wanting to evaluate your business and highlight the problem areas that need attention. Their methodology will throw light on the exact status of your business and how it will emerge in the future. They also take into account any additions of services or products and their role in the market and how that will affect your business.

Further, professionals conduct site visits to assess the worth of an organization. They will go through all the financial records in detail and even interview staff and company personnel to provide a fair and comprehensive picture of your organization.

Hence, do not skimp on a few bucks here as this will put your company at a greater risk and you will not be able to handle any problems associated with it in a profitable manner.A certified appraiser will ensure that your business interests are kept in the forefront and you benefit from the valuation.