Finance is one of the ‘hard to crack’ nut in any diploma or degree courses. Basically, finance is the study of how companies manage their funding and investment so as to maximize wealth for the company. The basic topics in finance are as follows
- Time value of Money
- Capital Budgeting
- Bond Valuation
- Equity Valuation
- Cost of Capital
- Capital Structure
- Capital Asset Pricing Model (CAPM)
- Portfolio Diversification
- Efficient Market Frontier
Our finance tuition will normally start with explaining financial jargons and financial instruments like basic knowledge of how a bond works. This is especially useful for students or working adults who are not verse in financial knowledge. Once these are understood, it is then important to understand the concept of Time Value of Money.
What is time value of money?
Time value of money relates to the value of money that changes over time. Think about this: - Will you want to receive a dollar now or a dollar at the end of the year? Under all the normal circumstance, one will definitely say now! This is because it is better to receive money now then to have it later simply because you perceive the value of that dollar to be higher now than at a later date. This is time value of money.
It is important to understand fully the concept of time value of money during finance tuition as it is paramount to a lot of other finance topics which we will be learning later.
Application of finance concepts will also be done to strengthen your knowledge on the subject during the finance tuition. After all the finance tuitions done, you will then realized that finance is not rocket science and whatever the different names given to all the topics actually all fall back on the most basic principle in finance – Time value of money!