Financial Cycle by Rixy Rohaizie https://padlet.com/rixyrohaizie/9r1c3tx4elx6 RAISING CAPITAL en-us 2019-04-01 02:24:59 UTC 2019-05-12 05:54:02 UTC hello@padlet.com https://padlet-assets.s3.amazonaws.com/icons/Manbag.png RAISING CAPITAL - SHARES rixyrohaizie https://padlet.com/rixyrohaizie/9r1c3tx4elx6/wish/347005410 1.Preference Shares 
  • has no voting right 
  • Preference in dividend/funds, cummulative vs non cummulative
  • event of bankruptcy -  paid prior pay ordinary shareholders
2.Ordinary Share Capital
  • has a voting right 
  • residual owner - last group who will receive dividend/funds
  • dividend if there is leftover profit
  • event of bankruptcy -  last will be paid (if there is any left funds)

]]> 2019-04-01 03:07:55 UTC https://padlet.com/rixyrohaizie/9r1c3tx4elx6/wish/347005410 BONDS rixyrohaizie https://padlet.com/rixyrohaizie/9r1c3tx4elx6/wish/347006228
  • has maturity date, pay interest (coupon) + principal
  • Issuer wants to finance a long term investment (project)
  • Depend on indenture (debt agreement) and covenants (clauses)
    • Types of bond
    1. Fixed rate (coupon constant) or step coupon bond (coupon increases)
    2. Floating Rate Note (coupon based on reference rate)
    3. High yield/junk bond – rated below investment rate by CRA
    4. Convertible – allow to convert into issuer’s shares
    5. Exchangeable – allow to convert into other company’s shares
    6. Zero coupon – issue at discount
    ]]>     2019-04-01 03:13:23 UTC https://padlet.com/rixyrohaizie/9r1c3tx4elx6/wish/347006228     DEBENTURES rixyrohaizie https://padlet.com/rixyrohaizie/9r1c3tx4elx6/wish/347006891
  • unsecured loan or long term debt
  • Guaranteed high interest rates (normally fixed)
  • Pay principal + interest to holder on maturity date
  • more secure than a share, less secured than bond
  • Bankruptcy - holders have no collateral that they could claim from the organization

    • ]]>     2019-04-01 03:17:28 UTC https://padlet.com/rixyrohaizie/9r1c3tx4elx6/wish/347006891     COMPOUND FINANCIAL INSTRUMENTS rixyrohaizie https://padlet.com/rixyrohaizie/9r1c3tx4elx6/wish/347007195
  • Hybrid capital – have liability (unfavourable conditions to issuer) and equity element
    1. Irredeemable  convertible unsecured loan stock (ICULS)
    2. Irredeemable  convertible cummulative preferred stock (ICCPS)
    3. Redeemable  convertible unsecured loan stock (RCULS)
    4. Redeemable  convertible cummulative preferred stock (RCCPS)
    5. Redeemable  convertible secured loan stock (RCSLS)

    ]]>     2019-04-01 03:19:29 UTC https://padlet.com/rixyrohaizie/9r1c3tx4elx6/wish/347007195     LONG vs SHORT TERM BORROWINGS rixyrohaizie https://padlet.com/rixyrohaizie/9r1c3tx4elx6/wish/347008284
  • LONG TERM LOAN
    1. From banks and financial institutions.
    2. Period of loan more than a year.
    • SHORT TERM BORROWINGS
    1. Account payables – trading goods purchases
    2. Other payables – finance other purchases eg non-current assets
    3. Accrued expenses – delaying payment
    4. Bank overdraft – prior agreement with bank, interest charged
    5. Invoice discounting – use AR (sales invoices) as collateral for short term loan, not all AR is eligible, must send aging reports to financier
    6. Debt factoring – sale off AR to financial institution
    • Retained Earnings
    ]]>     2019-04-01 03:26:33 UTC https://padlet.com/rixyrohaizie/9r1c3tx4elx6/wish/347008284     REGISTERS AND RECORDINGS rixyrohaizie https://padlet.com/rixyrohaizie/9r1c3tx4elx6/wish/347009321
  • Register -maintain source of funds, keep track on repayment schedule.
  • Many borrowings -Loan Repayment schedule 
    1. info borrowings, lenders, lenders address and contact persons, installment due date, monthly instalments amount, total and outstanding balances.
    • AP database – maintain details of suppliers/vendors including credit limit and term
    • Shareholders’ register
    1. data of individuals and organisations who bought shares
    2. shareholder’s name, contact address & no., share certificate no.  they hold, share issued date and number of shares held.
    • Register of debentures
    1. Details on who bought debenture
    2. holders’ name, contact address & no, certificate no. & face value they hold
    ]]>     2019-04-01 03:34:47 UTC https://padlet.com/rixyrohaizie/9r1c3tx4elx6/wish/347009321