A Research On Blockchain Association With Finance


The prime focus of a blockchain business is to introduce the concept of virtual currencies to the banking structure and the financial areas. Presently, some of the venture firms are collaborating with technological labs to efficiently use blockchain knowledge to redesign the banking ecosystem and allow the traditional ones to conduct their business effectively.

The advantages of such tech partnership are

  • It freely allows banks to transfer funds and help to manage international transactions without a third external party as intermediate. As a result, local banks can easily exchange money with other regional banks without really depending on those capitals through an intermediary.
  • They have developed a platform for smart contracts with a unique coding language
  • Moreover, a cryptocurrency technology is in its phase of design, that look forward to making it possible for the peer end users to buy and sell digital currencies without any exchanges acting in between them.
  • Other services are also mentioning Bitcoin to funding solutions and payment apps.
  • In addition to all these, the existing online payment services are incorporating Bitcoin and have announced relations with the existing bitcoin payment amenities like GoCoin, BitPay, and Coinbase.
  • A mobile pay provision app provider is working parallel on a specific feature that initiates the customers to easily pay for car rides and rentals with cryptocurrency.
  • The use of Bitbank has made the virtual currency to outrage the traditional banking service. By doing so, they securely provide the notion of regulated financial facilities involving bitcoin.
  • Further, innovative ideas are striking around the digital currency initiated products like its particular decentralized savings account, non-government lending or borrowing blockchain based structure like BTCjamthat pass through a series of user made rules under fractional reserve levels.
  • Also, the introduction of bitcoin swaps exchange like Tera Exchange had made it realistic for the venture and individual nominees to get cryptocurrency contracts through trading software platforms without any intermediates. An organization that accounts for indicating price index is incorporated to better trade the contracts.

Future projects are on its way to

  1. Offer assistance to real-life brokers, investors and bank customers a chance to retrieve these e-currencies.
  2. Create a trading platform that initiates bulk currency transactions and partner with firms associated with capital markets to make bitcoin payment for its research and development.
  3. Build up a venture that constantly tracks and regulate the clearing and arrangement of securities and provides a fair stock market with securities within the blockchain model.


A Characteristic Example Of A Good Working Capital Model


One should clearly analyze the practical sides of the working capital of a firm to effectively handling it. Some of these measures include

Minimizing the inventory time period allocated for holding of the required standard materials. This can be established by

  • Avoid ordering in bulk quantities of the basic materials mainly for discounts intention and make sure you buy only the specific volume to meet the immediate making process.
  • Considerably maintaining the buffer stocks at an average stock level without probably taking a chance of the stock out situation.
  • Effectively decreasing the lead period allocated to the dealers, without further stepping into a sort of lacking conditions.
  1. Obtaining the credits from the dealers as soon as possible
  • Extension of the dealing period can lead to dropping of ideal discounts that are usually made on the apt payment value. This can adversely affect the financial status of the company that can be initially calculated with other types of source funding.
  • The most important point to be noted before sanctioning such extension period is that they can gradually dissolve the goodwill or motivation of those goods suppliers. This can further create a condition of not meeting the urgent raw material needs.
  1. Choosing the optimal time period for goods production and for possessing finished inventories.
  • By doing so, hundred percent cost savings are obtained and quantity returns can be ensured in terms of production without quality sacrifice.
  • Additionally, the savings parameter obtained from lowered inventory handling should be constantly iterated against the rate of inventory out together with comparing its effect on customer service.
  1. Another step to effective working is by lessening the time period allocated for average debt collection.
  • The overall cost of administering can be dropped by accelerating the debt collection process and also, the sales factor should be constantly noticed due to plummeting the credit period.

Analyzing an ideal cash balance model

Baumol’s Structure: This is an example of economic inventory management type.

  • The main theme of this model is like it uses a constant rate of money per a known period and also includes the marketable securities retaining cost.
  • It can be represented as a function of different parameters like C or the minimum balance maintaining cash, For the whole amount needed per year, T or the transaction cost between cash and securities and finally, r or interest rate on saleable securities.
  • As per the model, the firm uses the cash C until it reaches to zero and is instantly filled with another C equivalent.


Mistakes to avoid in business valuation

A business valuation can be done for several reasons and in several ways. The results that a business valuation gives should be accurate because these are used to improve the profitability of the business and to take crucial decisions.

  1. Not having a clear goal laid down

The actual results obtained during a business valuation would depend on the performance of the business in the short term and long term. But the parameters being studied and the method of valuation chosen would depend on the goal of the valuation. So if you start business valuation without an object you would not be able to find the right method to use.

  1. Not giving valuation the attention it deserves

Business valuations done by companies acquiring other companies are often done with utmost accuracy. But valuations done by the business to simply gain an insight into the worth might not be given an equal importance. But be it for acquisition or for decisions on ESOP or for a general study about the value, valuation should be given the importance it deserves.

  1. Ignoring the gaps in data

There should be great attention given to documentation right from the early days. This would make sure that there are no discrepancies in the data is documented. Gaps in data might lead to inaccuracies in valuation. This magnifies when you plan to sell your business. If the valuation done ignores missing data then the buyer side valuation which might demand every piece of information might deviate from the observations from the previous valuations. This would make it more complicated to understand the real value of the business.

  1. Not understanding the difference between cash flow and accounting profits

Profits and cash flow appear very much similar but they are a lot different as well. The profits that a company makes indicate the success of a new measure that was implemented. But the cash flow indicates the consistency in the processes. Valuation should give more importance to the cash flow than the accounting profits. Accounting profits give a sneak peek into the short-term performance. But for understanding the real worth of the business the long-term value should be understood and cash flow deserves special attention in this case.

There might be several generic ways to assess a company. But no matter how many similar firms exist, there are some risks specific to each organization. The liabilities and the assets, operating costs and other factors would also determine the results of the valuation.


Role of microfinance in today’s world

Access to opening a savings account and lending of small amounts is the main function of microfinance. Expertise and capital are flowing increasingly into microfinance. More and more institutions are entering the world of microfinance. Poor people especially women are benefitted by this scheme. The growth and the development of microfinance market creates an impact not only for poor people and the contemplating finance providers, it affects more people. Read through to understand how it affects others.

Whom all be affected by microfinance

Finance professional– Microfinance demands highly specialized knowledge in finance along with a combination of other skills like knowledge of local language, customs, and social science. For all the finance professionals, it means opening up new careers for all the people who possess such skills. Also, it brings together people with different backgrounds and expertise to work in a collaborative team.

Investor– All those institutional investors who were engaged in focusing only on the return are making now investments related to microfinance. Regional and local banks are the first organizations to incorporate microfinance investments into the bank’s current portfolio. Also, the consumer finance organizations are conducting microfinance activities. If you are an investor, you could find out whether the organizations you are planning or already invested in any relation to microfinance. If it is, you could find whether it appeals to you and take decision accordingly to invest in which type of organization.

Individual– People do believe that currently we are all living in an era where the poverty would be eradicated. Many studies even support those beliefs. Initially only a very few percentages of people were able to be finally come over above the poverty line. Rest all were still struggling at below poverty with no money at all. With the emergence of microfinance from the financial institutions, more than 45% of people were able to cross the above poverty line. Poverty eradication can be welcomed as one of the key achievement for the humankind. We could also celebrate the distance possibility that all could sell and buy things from each other. Every individual who wishes to be a part of the poverty eradication scheme could opt to lend money to a microfinance provider based out of any part of the globe through a nonprofit organization. Thus even a common man could also contribute to the betterment of developing countries and cater good deeds to the society.

Inflation -Economic and production effects on business

Inflation exists whenever the supply of money is more than the goods and services available. It is the constant upward trend of the price level. It is not actually the high prices but the rising level of price which constitutes inflation. It can be considered as the devaluation of money’s worth. With a unit of currency, you will be able to buy less. It is also a recurring phenomenon. However, a sudden increase in price or a small increase in the price level will not be considered as inflation as it will be reflecting the workings of the short-term market. The inflation affects all segments like employment, investment, salaried people, shareholders, debenture holders, debtors, creditors, etc. The major impact is on business and in turn, affects economic and productivity growth of the country.

Production and economic impact of the inflation

The inflation will not always result in higher output. Inflation will at times have a favorable effect on the production. Usually, the profit is considered as a rising function of the level of price. The inflationary situations force the business organization to increase the product’s prices. The rise in price and profit urges the organizations to invest in a larger amount. This investment’s multiplier effect will, in turn, result in generating higher national output. But, this favorable inflation’s effect will be only there for a temporary period till the production costs and wages rise rapidly.

Furthermore, if the inflation is of the cost-push type then it will be associated with output fall. Hence, there is no actual relationship between output and prices. If the demand increases, it will result in increases both output and prices but in case of a supply shock, the price will increase but the output will be reduced.

The inflation will bring down the production level. When there is a prolonging inflation, the business organizations will not be able to ascertain their revenues and costs accurately. Risks element will be more. The business organizations would be very much reluctant to make more investments and to get into long-term commitment because of the uncertainty of future inflation. In this situation, the growth of the economy will be hit badly.

For an economic growth, low rate of inflation is necessary. The mild inflation will have an overall encouraging impact on the national output. The economic growth in the long-run is affected by the high inflation rate. Also, the hyperinflation lowers the savings habit of both the business organizations and individuals.

Microfinance – The Important Terminologies

The following are the important terminologies of the Microfinance concept, which anyone willing to avail it or learn about it should be aware of!

  • A microfinance institution (MFI) 

It is the institution offering microfinance-related assistance, such as microloans, micro savings scheme, and micro-insurance to the deserving individuals, that is, generally, people belonging to the low-income community, who cannot access the financial assistance offered by the traditional institutions.

  • Active clients 

The total number of clients with the outstanding loan amounts.

  • Group lending

It is a lending mechanism to compensate for the absence of collateral and, as well as to alleviate the risk encountered by the MFI, in where the group of individuals, known as the solidarity group are pooled together to make the loan repayment. That is if, for some reason, one member of the group defaults, the others in the group would compensate for his/her act thus, upholding the repayment rate factor, every time. This lending mechanism was also introduced to create a peer pressure that naturally, encourages everyone in the group to repay their dues on time.

  • Individual lending

Although rare, not impossible, where unlike the group lending, here the repayment solely depends on the individual lender, any day!


These are the people owning the small-scale businesses that are referred to as the microenterprises.

  • Microenterprise

The informal business sector, usually, based out of the home with up to 5 associates.

  • Ultra-Poor 

These are the very poor people, whose daily existence is limited to less than $1, unfortunately!

  • Upper Income

 People belonging to the low-income category, whose earnings are in the range of $2- $5 per day!

  • Voluntary Savings

 This referred to the amount of money voluntarily deposited in the MFI by the individuals availing microfinance, which shan’t be used as a condition for accessing any loans now, or in the future.

  • Tier 1 MFI

This refers to the mature and large Microfinance institutions, whose activities are highly transparent to the community o perhaps, the world.

  • Tier 11 MFI

 These refer to the small or medium sized MFIs that are yet to attain the complete maturity.

  • Tier 111 MFI

 Usually the growing or the start-up MFI and the immature NGOs come under this category.

  • Unbanked

This term is used to refer those employed poor individuals of the world who are not eligible to access the conventional financial assistance offered by the formal banking sectors.

  • Non-financial services

The educational services offered to microfinance participants, be it the ones related to financial literacy or the other generic ones that help them tackle the social challenges come under this non-financial services category.

Financial Advice For A Successful Merger And Acquisition

Businesses are run by the owners and they are governed and advised in all matters by the financial advisors and others from the various departments. It is with all of these people that a business gets to flourish well in the market and brings success to the owners and the others. Everyone needs to understand the basic financial terms for the business to take the right path for though each head belongs to a different department with a different and unique experience, it is the collective efforts and brains of all these people that aid the business in its successful running. So though not professionals, they all become the financial advisors of the company when comes to important decisions.

Every business owner sits with these financial advisors on important decisions and finalizes them only after taking into account their points of view. Now, this is very much important when a business decides to merge with another company or when it decides to take up or acquire another company for some very beneficial or pressurized reasons. So now what happens here? What are the important things a company that is going to acquire another needs to do before it actually starts the acquisition process? Here is a brief about this.

  • The primary thing that the acquiring company needs to look into is the finance department and its training that is necessary to be given to the finance people of the seller or the merging company if they are getting absorbed as such. This is very important because this is the team that would be handling and managing all the finance-related details that which would reveal the profit status at the end of the year. And this training is mandatory because the finance executives from the merging company would now be absorbed into a different line of business altogether and to make them feel comfortable with the nature of work, a training session becomes necessary.
  • Then comes the merging of the different financial policies and concepts followed by the two companies. Generally, this differs from one company to the other depending on the type of service or business they are into. So this becomes important to be sorted out.
  • Now the merged company should sit to note the various opportunities that they can tap on and based on this they need to set new milestones.
  • Bringing in new resources if necessary.