FinGyan

GEARING is the proportion of the capital employed in a company that is financed by lenders rather than shareholders. In simple terms, explains how a company finances its operations either through lenders or through shareholders. Gearing is basically defined as the ratio between a company’s borrowing (debt) and owner’s equity (i.e. shareholder’s fund). It is synonym to the word financial leverage. The ratio explains the degree to which the business is funded by the owner as against the borrowed funds. The gearing ratio shows how restrain a company is with debt. Companies with high gearing more long term liabilities than [....read more....]

Arbitrage is a financial transaction that makes an immediate profit without any risk. Arbitragers take advantage of different rates, prices or conditions between different markets. Arbitragers make profit by exploiting price differences of identical or similar financial instruments. Trading foreign exchange is a kind of arbitrage where no risk involve where arbitragers buy at lower price and sell it at higher. However, the term has expanded the meaning now any activity to buy underprized item and sell at higher price to earn profit. These days futures index by the BSE and NSE are instrument used for arbitrage. Arbitrage opportunity exist [....read more....]