How to Read a Company’s Financial Statement

In stock investing, it is important to base your decisions on sound analysis of the company’s performance and growth prospects. This is not possible without going through the nitty-gritty of a company’s financial statement. For instance, you need to know if it is generating revenues from its core businesses operation or if it has enough cash to cover dividend payment since dividends are usually paid in cash. This is best analyzed by looking at cash flow statements. If you are wondering just how much profit a company has made in…

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What is a Bond and How do Bonds Work?

[wp_ad_camp_1] A bond refers to a debt security that pledges to make regular payments for a specified period of time. If you are wondering what a security is, it is a claim or entitlement on the issuer’s future assets or income. If you buy a bond, you are simply lending money in return for interest payments which the borrower or bond issuer makes periodically during the loan term. At the time of loan maturity, the bond issuer pays the principal or original amount of the debt to the lender or…

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What is the Risk-Free Rate and How Can It Be Used to Guide Your Investment Decisions

[wp_ad_camp_1] In investment, there is this term called risk-free rate of return.  In a relatively stable economic environment, the risk-free rate offers the minimum return that one can yield without taking on any risk (ie, a risk-free investment).  But what is it really and how can it be used by a stock investor to make investment decisions?  Let’s find out.

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Why Do Recessions Happen?

[wp_ad_camp_1] We hear the word recession all the time?  But what is it and why do recessions happen?  The impact of an economic recession is utterly wide-ranging. Depending on its nature and extent, a recession’s effects can be huge or minimal, direct or indirect. In any case, a recession is something that everyone should care to know about. But in order to care about it, you must know what a recession is and why it happens.  According to the National Bureau of Economic Research (NBER) in the US, a recession refers…

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