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NEGOTIATED FINANCE

NEGOTIATED FINANCE

DEFINITION:
The sources of finance or loan which is gennrated through negotiated and also pay the interest cost.
Example:
Bank loan

a) Money Market:

  • Commercial Paper
  • Banker Acceptance

Money Market:
The market where securities whose maturity are less than or equall to one year are sold or purchased.

Commercial Paper:
high good will
risky

Banker Acceptance:
mostly new companies
less risky
bank gives granty

b) un-secure loan:
The loans against which the companies can not pledge its assets is called un-secure loan.
there are three method

  • Line of Credit
  • Revolving credit
  • Transections Loan

Line of Credit:
The bank give the loan to the company if the company needs more loan then it should return the previous loan first this condition imposed by the bank is called clean up provision.

Revolving Credit:
In revolving credit bank gives the facilty to the customer to withdraw amount and also pay the commitment fee on the reserve loan amount it is called revolving credit.

Transections Loan:
In transection loan the bank give the loan to the company against the single transection.
Example:
suppose the company buy the machine and bank will pay its amount and company loan will increase because the company did not pay the amount its on assets.

c)Secure Loan
The loan against which the companies pledge its assets is called secure loan.

Account Receivable Bank Loan.
In this type of loan the bank pledge the receivable of the company and give the loan to the company. This loan amount should be less than the account receivable amount.

Inventory Back Loan:
The bank pledge stock of the company and give the loan to the company.

Inventory Factors Consider by bank:
life: to check the stock life is the stock life is more than loan time or less
liquidity: to check sotck will sell fastly or slowly in market
price movement:  to check the stock price fluction less or more or stable.


FINANCIAL MANAGEMENT
DECISION AREA OF FINANCIAL MANAGEMENT
AGENCY PROBLEM
TYPES OF BUSINESS
FINANCIAL SYSTEM
FINANCIAL INTERMEDIARIES
TYPES OF FINANCIAL MARKETS
TIME VALUE OF MONEY
EXAMPLES AND FORMULA TIME VALUE OF MONEY
CASH FLOW,SUM,SERIES OF CASH, ANNUITY AND MIX STREAM
ANNUITY TYPES AND FORMULA
AMORTIZATION SCHEDULE OR TABLE WITH EXAMPLE
EFFECTIVE INTEREST RATE WITH EXAMPLE
VALUATION OF LONG TERM SECURITIES (BONDS)
TYPES OF BONDS
BONDS FORMULA,ZERO COUPON PERPETUAL
VALUATION OF LONG TERM SECURITIES (SHARE)
CASH AND MARKETABLE SECURITIES MANAGEMENT
MANAGING CASH INFLOW AND OUTFLOW
SECURITIES MANAGEMENT
SHORT TERM FINANCING
SPONTANEOUS LABILITIES
NEGOTIATED FINANCE
CAPITAL BUDGETING
CAPITAL BUDGETING TECHNIQUE
NET PRESENT VALUE TECHNIQUE
INTERNAL RATE OF RETURN TECHNIQUE
ACCOUNT RECEIVABLE MANAGEMENT
INVENTORY MANAGEMENT
FORCASTING

MBA NOTES FINANCIAL MANAGEMENT
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