Final Thought-The Most Interesting and the Least Liked Topics

The Most Interesting Topic

After a detailed financial analysis on the manager and investor perspective, I was most interested in the weighted average capital cost. The topic is interesting to me for several reasons; first, the topic is easy to understand and apply in the real world since one standard formula is used to calculate the weighted cost of capital of a given business entity. Second, the weighted cost of capital is very significant for both on-going businesses and in the startup stage. Potential investors use the weighted cost of capital to evaluate a business enterprise's value and project the future cash flows without actually investing in such businesses.  

The business's value is compared with the current market price to determine the worthiness of investing in such a venture. If the company is found feasible, the investors go ahead and start, whereas the idea is dropped if found unprofitable. Hence, investors avoid the inherent risk of failure; on the same note, management benefits from the weighted average cost of capital in determining a business's present value. They get to know whether the money invested outweighs the company assets.

The least interesting topic.

The financial statement was my least finance topic after in-depth analysis of fiancé because it is a very complex topic that comes in many forms, such as balance sheet, income stamen, and the cash flow statement. These forms of financial statements are arrived at...