MoneyMatters

  The importance of working capital management to your business cannot be overstated. One of the best indications of a company's health is how its working capital is managed. Your balance sheet's working capital includes liabilities, cash, unpaid invoices, existing inventory, and current accounts payables. It can be thought of as the difference between your company's available assets and liabilities. Using a certain process, various components fit together to form the core of working capital management . Cash, inventory, and accounts receivables are considered current assets, and short-term loans, accrued liabilities, and accounts payable are current liabilities. 

 People have long loaned money to one another in India. It could be extended families aiding one another in need or business communities where people borrow money to meet working capital requirements. People frequently turn to banks or other financial organizations like Non-Banking Financial Companies (NBFCs) for a loan when they need money. Yet, these banks often reject loan applications due to issues with income, incomplete paperwork, poor credit, etc. When this happens, friends and family from their social network occasionally help by lending money. Yet, people who lend money only do so when they have a relationship with the borrower and are confident they will be reimbursed. This type of lending model has the drawback that people can only lend to and borrow from a small number of others in their network. As a result, many people struggle to find funding at crucial points in their lives. Peer to Peer lending can be helpful in these trying times. P2P lending is the crucial conne...

For someone unfamiliar with the fundamental differences between simple interest and compound interest, simple interest can seem confusing. It would be helpful if we could understand them. In simple interest, only the initial principal amount is calculated each time over the entire period.  The calculation of compound interest involves adding the principal amount to the previous interest every time. In this case, simple interest will accumulate at a rate of 10% per year for five years on a principal of Rs. 100, resulting in a total of Rs. 150 after five years. The cumulative amount after five years, if compounded at the same rate, will be around Rs. 165. This is because, after the 1st year, the interest will be calculated at Rs. 10. On the other hand, after the 2nd year, the interest will be calculated at Rs. 110 instead of Rs. 100. In other words, even if the principal amount and rate of interest remain the same, the amount will be higher after 5 years if compounded. Simple and Com...