Sales Training & Sales Management
We are sales management & training professionals. We consistently facilitate record-
breaking sales for companies, teaching them how and when to use the Critical Selling
Skills that have the greatest impact on gaining customer commitment. We accomplish
this through Action Selling Sales Training and Sales Skills Certification.
We will look at your sales management, time management, culture and selling situation
from several different perspectives. At least one of the team members assigned to you
will be a seasoned veteran with the experience of facilitating a minimum increase of
$1,000,000 GP for other companies. Together we collaborate with you to develop an
Action Selling sales training program that is custom fit to your organization and one that
will solve the challenges your sales people face in the field. Our program includes:
Consulting with your Sales Management, VPs and Directors
Sales management training customized to your business
Sales Skills Assessments (pre & post training)
Learning Reports and Recommendations
The Action Selling Workshop or Train-the-trainer Workshop
Online Training and Reinforcement
Sales Skills Certification
Customized Best Sales Practices
Sales Coaching, Tools and Training
The Action Selling Training Program and the sales management process identify Five
Critical Sales Skills
Buyer Seller Relationship
Sales Call Planning
Sales Presentation Skills
Sales Skills #1
Buyer Seller Relationship Skills
FACT: 82% of Salespeople Fail to
Q: Why is this?
Most salespeople fail to follow a process that matches the natural buying process that
nearly all customers make. 82% of sellers are out-of-sync with the buyer. Learn how to
join the elite sellers that truly understand how to "walk arm-in-arm with their customer"
as each of the Five Sequential Buying Decisions are being made.
We structure our sales presentations in this order to avoid resistance later in the call.
Sales Skills #2
Sales Call Planning Skills
FACT: 99% of Salespeople Fail to Set the Right Call Objectives
Q: Why is this?
This is not surprising since over two-thirds of companies lack a formal sales process.
Even fewer have a documented "Best Sales Practices."
As companies and salespeople Certify on this critical selling skill using the Action
Selling Certification Program, they finally have a road map to follow. The entire sales
process gains momentum. Salespeople win more business - at higher margins - while
decreasing sell cycle time.
Sales Skills #3
FACT: 86% of Salespeople Ask the Wrong Questions
Q: Why is this?
The Question is the number one tool the salesperson has for managing sales calls. It's
surprising how many salespeople are poor performers when it comes to asking the right
questions. The Best Questions actually "Open" the sale. And you can't close a sale unless
you've opened it.
Poor Questioning leads to resistance in the form of Objections
Poor Questioning doesn't allow product or company differentiation
Poor Questioning leads to poor sales strategy
Sales Skills #4
Sales Presentation Skills
FACT: 95% of Salespeople Talk Too Much and Listen Too Little
Q: Why is this?
Many sales are lost due to the lack of a procedure for presenting product capability. The
symptoms associated with poor sales presentation skills include:
Sales calls that lose momentum
Customers that lack enthusiam about your product
Price or product objections
Losses to competition
Stalls such as: "I'd like to think about it."
When a consistent procedure is used, sales presentations are focused on specific, high-
priority needs. Your solution is viewed as unique to the customer. Salespeople win more
business, at the right price.
Sales Skills #5
Gaining Commitment Skills
FACT: 62% of Salespeople Fail to Ask for Commitment
Q: Why is this?
The principle mission of the salesperson is to Gain Commitment. That's the reason why
companies value the work that we do. So why would more than half of sales people skip
1. They don't set the right kind of objectives for sales calls.
2. They miss buying signals from the customer.
3. They lack a procedure for gaining commitment.
When a consistent procedure is used, salespeople know when and how to ask for the sales
Training the HR personnel
Effective training of HR personnel is of prime importance for the success of any
organization as good employees are the reflection of
good HR, writes Nivedan Prakash
Training, by its definition means, preparing or guiding
any person to perform a certain task. The same
implies for HR personnel as well. As we all know, HR
is an integral function in any organization, which
supports it to get the right people in, grow and develop
them, and eventually manage talent so that the
organization achieves the desired objectives through
It is important then that the people in HR, who make business success possible for the
organization, are appropriately and adequately trained to perform their day-to-day
functions. In fact, such is their job responsibilities that they do require certain training to
handle their job efficiently. The trainings provided are mostly HR domain related, which
could be on various techniques of managing people, understanding employee related
issues that encompasses counseling and other best practices across the industry, and
orientation on various HR systems enabling them to be more efficient in executing their
HR training in most organizations is typically around the behavioral and knowledge
modules. Most of these cover areas like recruitment and retention, leadership, team
building, conflict resolution, psychological assessments, time management, risk
management, and mandatory training in quality certifications that the company is vying
for. In times of recession, organizations do provide training to the HR personnel in career
management, career change, and out-placement service, besides extending in-house
trainings on how to show the pink slip.
The training to HR team would also include training on HR systems and processes (like
performance management system and process), training on tools (employee database like
PeopleSoft), training on business acumen, coaching skills, influencing skills, project
management, sourcing skills, soft skills like presentation skills and communications
Ravi V Kodukula, Assistant VP and Head of Learning and Education, Aricent
Technologies, asserted, ―Typically, the training that HR SMEs (Subject Matter Experts)
need is to be knowledgeable and skilled at hiring the right talent, training them and be
adept at a host of talent management and retention practices—viz., compensation and
benefits, managing cross-functional movement, global leadership and talent mapping and
movement, international compensation, HR engagement in mergers and acquisitions, etc.
As such, training and skilling of HR SMEs revolves around these practices.‖
Role of HR training
The quality of employees and their development through training and education are key
result areas for any HR function in the current market scenario and is the major factor in
determining long-term profitability of any business. Training has evolved from a
presumed context with class room instructions, to well researched and well structured
dissemination of information and knowledge through numerous ways, in house, on the
job, online, out bound, institutional learnings, etc.
There has been a paradigm shift in the way HR training has evolved today. It is no more
intended to provide a quick fix—short-term soluiton for any kind of a situation. Training
function today has to be of continuous learning nature and involving all the stake holders.
The traditional ‗Outside-In‘ approach has to be reversed to ‗Inside-Out‘. The trainees
need to buy the concept and themselves become propagators of the targeted change.
Training has enabled organizations through increased productivity; reduced employee
turnover; and increased efficiency, resulting in financial gains and decreased need for
supervision. Said Jaya Jacob Alexander, Chief of Human Resources, Geojit Financials
Services, ―HR training is indeed important as is training for any other function. More so
now when HR plays an integral role to support the business too. Finance for non-finance
executives, business strategies, advanced workshops in HR related software, e-learning
modules, etc., are very relevant topics for HR personnel.‖
Moreover, the focus now is about HR becoming a strategic business partner and not just
focused on operations. Towards this end, the learning has also been evolving to move the
HR team up in the value chain by training HR team members on business acumen,
influencing skills and coaching skills among many other training.
Handling critical issues
HR is supposed to handle all issues—right from minor team tussles to grave concerns like
harassment to schedule trainings for employee growth and development. And this is
where the role of training comes into the picture so that they can handle any such
situation effectively. It is the onus of the HR to ensure a happy and productive workforce.
It is of paramount importance that the leaderships in management and HR realize the
need to maintain a trained and agile HR team to handle the people challenges in the
organization. Though typically HR professionals pick up most of these skills on the job,
some of the trainings that will benefit the HR professional would include training on
quality management system, information security management system, conflict
management, problem identification, root cause analysis, planning the action and
execution and follow-ups. The training also includes understanding the company‘s
philosophy, policies and processes related to code of conduct and also on-the-job training
in dealing with employee relations issues.
Besides, there is a huge need to prioritize teaching the HR consultants to be able to
appropriately listen to the employees and synthesize the information, before jumping into
the solution. This is a time-consuming process and requires not just classroom training,
but a lot of patience on behalf of the HR leadership to recognize and work with the HR
staff so that they excel themselves in each and every employee interaction.
―Handling real-time issues require training beyond classroom, therefore, we ensure on-
the-job training to all the personnel under the mentorship and guidance of the senior
members. For example, if any HR member is not exposed to a tricky situation it is the
mentors who ensure their exposure to such situations under their guidance. Details
pertaining to confidentiality and dignity of the employee are shared in a group so as to
have learning and a common and uniform understanding followed path to handle such
situations. Robust systems already exist to handle routine issues like schedule training,
etc.,‖ added Ravi Verma, President and Global Head–HR, Nucleus Software.
―At the beginning of one‘s career, an HR personnel is given exposure of handling less
intricate situations to start with. Slowly he/she is required to get acquainted with team
members and further gain confidence of the middle and senior management of the team.
Then he/she is moved to front line positions of handling business groups independently.
Most of these trainings are coaching imparted by seniors of the team to help the junior
grow,‖ said Malvieka Joshi, Senior Director HR, Ciena India.
Moreover, HR is given training in the critical areas of people management and
organization development. It ranges from process training to diagnostic behavioral
training as well as team building training. This ensures that they have skills in making
appropriate employee relations and counseling. They work in advisory role to managers
and also help employees adjusted in the environment well by deploying necessary
interventions through appropriate communication skills and building trust and
transparency in the organization culture.
On the other hand, Ajit Varwandkar, Managing Director, FS Management, pointed out,
―Grievances could be managed in a variety of ways. More than training, it‘s the
counseling which plays an important role in conflict management. This again has to be a
long-term management objective. Conflict resolutions and grievance management are
separate functions, generally in short-term only the negative impact out of any kind of
conflict is arrested. In many organizations they do recruit professional counselors who
then take on these challenges one to one with the effected members of the team.‖
Meanwhile, these trainings do prove effective in handling the critical issues, as the HR
personnel get to use what they learn in the class room training or on-the-job training.
Personalizing training module
Through deliberation on real life situation and some times simulation of situations,
organizations do ensure that the training imparted is effective and fulfills individual
needs. It also helps them in understanding the flair of HR members, like if one is being
sensitive or inclined towards addressing various employee related issues or if they carry
the potential in handling disciplinary, counseling, developmental related issues. If yes,
then how effectively is the question here? These dimensions are very different from each
other and thus the training modules are customized according to the personal attribute of
the HR member.
The training courses are greatly appreciated by the participants only when they take part
extensively in the process. This has consistently been shown by evaluations and by
discussions in the post training follow-ups. It is not just the content which makes the
training program personalized and successful. More than the content, it‘s the method of
delivery which makes the program more effective.
Rosita Rabindra, Executive Vice President and Head of HR, NIIT Technologies,
commented, ―Organiz-ations should provide individual training need assessment i.e. TNI,
which should be connected with performance management system to identify the current
needs of an employee as well as developmental need for his future role requirements
based on competencies. Based on these TNIs, organizational and project training
programs are designed and implemented.‖
―Training is a vital developmental tool, and it needs to be applied very systematically and
scientifically for organizations to reap the benefit of enhanced employee performance.
The method of arriving at ―individual employee learning data‖ is very critical in this
process. Skill and competency matrixes, gap analysis, performance development areas
identified, are the major sources which contribute to personalizing the individual training
need data and in charting a development plan for the employee,‖ added Shobha Saji, HR
Manager, Empower Research Knowledge Services.
In making a good organization
From the day an employee becomes a member of the organization, the warmth with
which he is inducted and the hand-holding that he gets in the initial one-year period has a
big impact on his relationship with the organization. All those who are practising HR,
whether in the field or in the HR department, have a significant role in nurturing this
relationship into a bond. Communicating constantly with the employees and keeping in
touch are very important.
HR training and development is one of the key functions in any organization. The variety
of training initiatives in any organization may range from the technical training, which is
an absolute must for providing basic grounding and preparedness to all new employees,
to the non-technical or behavioral training to employees as they spend more time in their
roles and are required to demonstrate interpersonal behaviors to contribute successfully to
the business growth.
A huge need that is traditionally felt in organizations is to be able to continuously skill
and prepare the existing talent for a variety of roles and business opportunities—both
lateral and vertical growth for people in the company. This calls for a structured
leadership development framework at an organizational level. The learning and
organization development part of HR plays a critical role in putting the right framework
as well as the required interventions in place. A continuous commitment, both in terms of
money and material, as well as leaders training further leaders in the company is an
absolute essential. This helps create a ‗leadership engine‘ in the company.
Ashok Srinivasan, Vice President, Operations Support, Expertus, said, ―HR training helps
to teach an individual to cope with situations and issues that one may come across in the
course of one‘s work life, but while saying so, each situation differs from the other and it
then when wisdom which comes from experience works better than knowledge that one
gains from learnings.‖
―It is important for HR team members to understand the company‘s values, philosophy,
systems and processes so that the HR team acts as the role model for the company‘s
values, culture and philosophy. HR enables the organization and employees to embrace
the culture, learn and grow and build a long-term career with the organization. The role
of HR is very critical for an organization to become performance-oriented and provide an
environment where people excel,‖ explained Manjunath SR, Senior HR Director, NetApp
Recent changes in training module
Training modules once designed go through a constant evolution, and as such, are
modified and redesigned from time to time. The changing face of businesses in the
external market and the talent demand and supply dynamics inside, make it necessary for
a regular re-look at the plethora of training modules that are delivered to the employees.
Training for HR is mostly situation specific and other than the general communication
and presentation or personality development modules, training depends on parameters
like type of service being offered and skill level of the employees in the organization as
the HR personnel need to be equipped to handle recruitment if scale is the goal, training
to handle post recruitment, or training the trainer if skill enhancement or better utilization
is the need of the hour.
Besides, changes in the training modules are made according to organizational
requirements. The companies make sure that HR staff are updated in the compliance front
as otherwise it can invite penalties from statutory authorities. They also emphasize on
enhancing their knowledge in the use of software that helps in reducing manual work,
especially in attendance and leave management, MIS of HR, and performance appraisal
consolidation amongst others.
Personal Training Programme
A personal training programme is an individual programme written specifically for you,
taking into consideration your fitness goals, current fitness level and amount of time
available to train. If you have already had a Wellness Assessment we will use these
results and incorporate them with your objectives to provide you with the ideal
Strength Training Programs
Why do we need strength training ?
Better performances can be the product of a number of factors. This product is primarily
the outcome of efficient technique, the progression of speed and the maturing competitive
attitude on a sound basis of general endurance, all round strength and general mobility.
The development of all round strength is best achieved via circuit training and then
progressing this through strength training. Weight training is the most widely used and
popular method of increasing strength.
How do we get stronger ?
A muscle will only strengthen when forced to operate beyond its customary intensity
(overload). Overload can be progressed by increasing the :
resistance e.g. adding 10 lbs to the barbell
number of repetitions with a particular weight
number of sets of the exercise
intensity, i.e. reducing the rest periods
Muscle Fibre Hypertrophy
Strength training will increase the muscle size (hypertrophy). Muscle growth depends on
the muscle fibre type activated and the pattern of recruitment. Muscle growth is due to
one or more of the following adaptions:
Increased contractile proteins (actin & myosin)
Increased number of and size of myofibrils per muscle fibre
Increased amounts of connective, tendinous & ligamentous tissues
Increased enzymes and stored nutrients
Which strtength training exercises ?
The exercise must be specific to the type of strength required, and is therefore related to
the particular demands of the event (specificity). The coach should have knowledge of
the predominant types of muscular activity associated with the particular event, the
movement pattern involved and the type of strength required. Exercises should be
identified that will produce the desired development. Although specificity is important, it
is necessary in every schedule to include exercises of a general nature - e.g.
Lat Pull downs
Lower Back Extensions
These general exercises give a balanced development, and provide a strong base upon
which highly specific strength training programs can be built.
Pectoralis Major Decline dumbbell bench press
Pectoralis Minor Incline dumbbell bench press
Medial Deltoids Standing dumbbell side laterals
Posterior Deltoids Standing dumbbell bent laterals
Anterior deltoids Standing front dumbbell raises
Biceps Brachii Incline seated dumbbell curls (alternate)
Triceps Brachii Triceps pressdown (angled bar)
Latissimus Dorsi One arm dumbbell rows (alternate)
Rectus Femoris Seated leg extensions
Biceps femoris Standing leg curls
Semitendinosus Seated leg curls
Gastrocnemius Standing one leg calf raises
Weight Training to Lose Weight?
Fitness Management Magazine conducted a study to determine the role of weight training on
body composition changes. In this study, 72 overweight men and women were put into two
groups. Both ate the same diets and exercised 30 minutes a day for 8 weeks. But one group
followed a typical weight-loss exercise program, spending all 30 minutes on aerobic exercise,
while the second group did 15 minutes of aerobic exercise (exercycling) and 15 minutes of
weight training (Nautilus machines). Here are the results:
Body Weight Fat Weight Muscle Weight
Changes Changes Changes
Endurance exercise only -3.5 pounds -3.0 pounds -0.5 pounds
Endurance and strength
-8.0 pounds -10.0 pounds +2.0 pounds
Won't Exercise Increase My Appetite?
High intensity exercise will stimulate your appetite. It lowers your blood glucose levels and
your body will demand more food than normal.
But several recent studies have shown that moderate exercise tends to actually decrease
appetite for several hours after your workout, the reason being that blood is directed away
from the stomach to your working muscles. That's why taking a walk during your lunch
break will help.
No Loss of Weight at First?
When you start an exercise program along with dietary changes to lose weight, it's important
to understand the difference between fat loss and lean tissue loss. As you get older, if you do
not exercise you lose lean tissue -- mainly bone and muscle mass. This is especially true for
people who sit most of the day.
But when you start to exercise you tend to gain lean weight (fat-free weight). Thus, when you
start an exercise program, you may not lose weight on the scale for a few weeks, or even a
few months. This is normal, and you shouldn't worry. Fat weight is being lost, but lean
weight is being added at about the same rate. You're losing fat and gaining muscle, so don't
Don't depend on the scale to chart your progress especially at first. Just look at yourself in the
mirror. How do your clothes fit? Are good changes going on with your body shape or
physique? Do you feel better?
he main techniques and sectors of the financial industry
Main article: Financial services
An entity whose income exceeds their expenditure can lend or invest the excess income.
On the other hand, an entity whose income is less than its expenditure can raise capital by
borrowing or selling equity claims, decreasing its expenses, or increasing its income. The
lender can find a borrower, a financial intermediary such as a bank, or buy notes or bonds
in the bond market. The lender receives interest, the borrower pays a higher interest than
the lender receives, and the financial intermediary pockets the difference.
A bank aggregates the activities of many borrowers and lenders. A bank accepts deposits
from lenders, on which it pays the interest. The bank then lends these deposits to
borrowers. Banks allow borrowers and lenders, of different sizes, to coordinate their
activity. Banks are thus compensators of money flows in space.
A specific example of corporate finance is the sale of stock by a company to institutional
investors like investment banks, who in turn generally sell it to the public. The stock
gives whoever owns it part ownership in that company. If you buy one share of XYZ Inc,
and they have 100 shares outstanding (held by investors), you are 1/100 owner of that
company. Of course, in return for the stock, the company receives cash, which it uses to
expand its business; this process is known as "equity financing". Equity financing mixed
with the sale of bonds (or any other debt financing) is called the company's capital
Finance is used by individuals (personal finance), by governments (public finance), by
businesses (corporate finance), as well as by a wide variety of organizations including
schools and non-profit organizations. In general, the goals of each of the above activities
are achieved through the use of appropriate financial instruments and methodologies,
with consideration to their institutional setting.
Finance is one of the most important aspects of business management. Without proper
financial planning a new enterprise is unlikely to be successful. Managing money (a
liquid asset) is essential to ensure a secure future, both for the individual and an
 Personal finance
Main article: Personal finance
Questions in personal finance revolve around
How much money will be needed by an individual (or by a family), and when?
Where will this money come from, and how?
How can people protect themselves against unforeseen personal events, as well as
those in the external economy?
How can family assets best be transferred across generations (bequests and
How does tax policy (tax subsidies or penalties) affect personal financial
How does credit affect an individual's financial standing?
How can one plan for a secure financial future in an environment of economic
Personal financial decisions may involve paying for education, financing durable goods
such as real estate and cars, buying insurance, e.g. health and property insurance,
investing and saving for retirement.
Personal financial decisions may also involve paying for a loan, or debt obligations.
 Corporate finance
Main article: Corporate finance
Managerial or corporate finance is the task of providing the funds for a corporation's
activities. For small business, this is referred to as SME finance. It generally involves
balancing risk and profitability, while attempting to maximize an entity's wealth and the
value of its stock.
Long term funds are provided by ownership equity and long-term credit, often in the
form of bonds. The balance between these forms the company's capital structure. Short-
term funding or working capital is mostly provided by banks extending a line of credit.
Another business decision concerning finance is investment, or fund management. An
investment is an acquisition of an asset in the hope that it will maintain or increase its
value. In investment management – in choosing a portfolio – one has to decide what, how
much and when to invest. To do this, a company must:
Identify relevant objectives and constraints: institution or individual goals, time
horizon, risk aversion and tax considerations;
Identify the appropriate strategy: active v. passive – hedging strategy
Measure the portfolio performance
Financial management is duplicate with the financial function of the Accounting
profession. However, financial accounting is more concerned with the reporting of
historical financial information, while the financial decision is directed toward the future
of the firm.
Main article: Financial capital
Capital, in the financial sense, is the money that gives the business the power to buy
goods to be used in the production of other goods or the offering of a service.
 The desirability of budgeting
Budget is a document which documents the plan of the business. This may include the
objective of business, targets set, and results in financial terms, e.g., the target set for sale,
resulting cost, growth, required investment to achieve the planned sales, and financing
source for the investment. Also budget may be long term or short term. Long term
budgets have a time horizon of 5–10 years giving a vision to the company; short term is
an annual budget which is drawn to control and operate in that particular year.
 Capital budget
This concerns proposed fixed asset requirements and how these expenditures will be
financed. Capital budgets are often adjusted annually and should be part of a longer-term
Capital Improvements Plan.
 Cash budget
Working capital requirements of a business should be monitored at all times to ensure
that there are sufficient funds available to meet short-term expenses.
The cash budget is basically a detailed plan that shows all expected sources and uses of
cash. The cash budget has the following six main sections:
1. Beginning Cash Balance - contains the last period's closing cash balance.
2. Cash collections - includes all expected cash receipts (all sources of cash for the
period considered, mainly sales)
3. Cash disbursements - lists all planned cash outflows for the period, excluding
interest payments on short-term loans, which appear in the financing section. All
expenses that do not affect cash flow are excluded from this list (e.g. depreciation,
4. Cash excess or deficiency - a function of the cash needs and cash available. Cash
needs are determined by the total cash disbursements plus the minimum cash
balance required by company policy. If total cash available is less than cash
needs, a deficiency exists.
5. Financing - discloses the planned borrowings and repayments, including interest.
6. Ending Cash balance - simply reveals the planned ending cash balance.
 Management of current assets
 Credit policy
Credit gives the customer the opportunity to buy goods and services, and pay for them at
a later date.
 Advantages of credit trade
Usually results in more customers than cash trade.
Can charge more for goods to cover the risk of bad debt.
Gain goodwill and loyalty of customers.
People can buy goods and pay for them at a later date.
Farmers can buy seeds and implements, and pay for them only after the harvest.
Stimulates agricultural and industrial production and commerce.
Can be used as a promotional tool.
Increase the sales.
Modest rates to be filled.
 Disadvantages of credit trade
Risk of bad debt.
High administration expenses.
People can buy more than they can afford.
More working capital needed.
Risk of Bankruptcy.
 Forms of credit
Credit on ordinary open account
Bills of exchange
Factoring of debtors
 Factors which influence credit conditions
Nature of the business's activities
Length of production process
Competition and competitors' credit conditions
Country's economic position
Conditions at financial institutions
Discount for early payment
Debtor's type of business and financial positions
 Credit collection
 Overdue accounts
Attach a notice of overdue account to statement.
Send a letter asking for settlement of debt.
Send a second or third letter if first is ineffectual.
Threaten legal action.
 Effective credit control
Reduces bad debts
Builds customer loyalty
Builds confidence of financial industry
increase company capitlisation
 Sources of information on creditworthiness
Chambers of commerce
Credit application forms
 Duties of the credit department
Taking necessary steps to ensure settlement of account
Knowing the credit policy and procedures for credit control
Setting credit limits
Ensuring that statements of account are sent out
Ensuring that thorough checks are carried out on credit customers
Keeping records of all amounts owing
Ensuring that debts are settled promptly
Timely reporting to the upper level of management for better management.
Purpose of stock control
Ensures that enough stock is on hand to satisfy demand.
Protects and monitors theft.
Safeguards against having to stockpile.
Allows for control over selling and cost price.
Main article: Cornering the market
This refers to the purchase of stock at the right time, at the right price and in the right
There are several advantages to the stockpiling, the following are some of the examples:
Losses due to price fluctuations and stock loss kept to a minimum
Ensures that goods reach customers timeously; better service
Saves space and storage cost
Investment of working capital kept to minimum
No loss in production due to delays
There are several disadvantages to the stockpiling, the following are some of the
Danger of fire and theft
Initial working capital investment is very large
Losses due to price fluctuation
Rate of stock turnover
This refers to the number of times per year that the average level of stock is sold. It may
be worked out by dividing the cost price of goods sold by the cost price of the average
Determining optimum stock levels
Maximum stock level refers to the maximum stock level that may be maintained
to ensure cost effectiveness.
Minimum stock level refers to the point below which the stock level may not go.
Standard order refers to the amount of stock generally ordered.
Order level refers to the stock level which calls for an order to be made.
 Reasons for keeping cash
Cash is usually referred to as the "king" in finance, as it is the most liquid asset.
The transaction motive refers to the money kept available to pay expenses.
The precautionary motive refers to the money kept aside for unforeseen
The speculative motive refers to the money kept aside to take advantage of
suddenly arising opportunities.
 Advantages of sufficient cash
Current liabilties may be catered for.
Cash discounts are given for cash payments.
Production is kept moving
Surplus cash may be invested on a short-term basis.
The business is able to pay its accounts timeously, allowing for easily-obtained
 Management of fixed assets
Depreciation is the decrease in the value of an asset due to wear and tear or obsolescence.
It is calculated yearly to enforce the matching principle.
Main article: Insurance
Insurance is the undertaking of one party to indemnify another, in exchange for a
premium, against a certain eventuality.
Changes in fashion
Time lapses between ordering and delivery
New machinery or technology
Different prices at different places
Requirements of an insurance contract
o The insured must derive a real financial gain from that which he is
insuring, or stand to lose if it is destroyed or lost.
o The item must belong to the insured.
o One person may take out insurance on the life of another if the second
party owes the first money.
o Must be some person or item which can, legally, be insured.
o The insured must have a legal claim to that which he is insuring.
o Uberrimae fidei refers to absolute honesty and must characterise the
dealings of both the insurer and the insured.
 Shared Services
There is currently a move towards converging and consolidating Finance provisions into
shared services within an organization. Rather than an organization having a number of
separate Finance departments performing the same tasks from different locations a more
centralized version can be created.
 Finance of states
Main article: Public finance
Country, state, county, city or municipality finance is called public finance. It is
Identification of required expenditure of a public sector entity
Source(s) of that entity's revenue
The budgeting process
Debt issuance (municipal bonds) for public works projects
 Financial economics
Main article: Financial economics
Financial economics is the branch of economics studying the interrelation of financial
variables, such as prices, interest rates and shares, as opposed to those concerning the real
economy. Financial economics concentrates on influences of real economic variables on
financial ones, in contrast to pure finance.
Valuation - Determination of the fair value of an asset
o How risky is the asset? (identification of the asset appropriate discount
o What cash flows will it produce? (discounting of relevant cash flows)
o How does the market price compare to similar assets? (relative valuation)
o Are the cash flows dependent on some other asset or event? (derivatives,
contingent claim valuation)
Financial markets and instruments
o Commodities - topics
o Stocks - topics
o Bonds - topics
o Money market instruments- topics
o Derivatives - topics
Financial institutions and regulation
Financial Econometrics is the branch of Financial Economics that uses econometric
techniques to parameterise the relationships.
 Financial mathematics
Main article: Financial mathematics
Financial mathematics is a main branch of applied mathematics concerned with the
financial markets. Financial mathematics is the study of financial data with the tools of
mathematics, mainly statistics. Such data can be movements of securities—stocks and
bonds etc.—and their relations. Another large subfield is insurance mathematics.
 Experimental finance
Main article: Experimental finance
Experimental finance aims to establish different market settings and environments to
observe experimentally and provide a lens through which science can analyze agents'
behavior and the resulting characteristics of trading flows, information diffusion and
aggregation, price setting mechanisms, and returns processes. Researchers in
experimental finance can study to what extent existing financial economics theory makes
valid predictions, and attempt to discover new principles on which such theory can be
extended. Research may proceed by conducting trading simulations or by establishing
and studying the behaviour of people in artificial competitive market-like settings.
 Behavioral finance
Main article: Behavioral finance
Behavioral Finance studies how the psychology of investors or managers affects financial
decisions and markets. Behavioral finance has grown over the last few decades to become
central to finance.
Behavioral finance includes such topics as:
1. Empirical studies that demonstrate significant deviations from classical theories.
2. Models of how psychology affects trading and prices
3. Forecasting based on these methods.
4. Studies of experimental asset markets and use of models to forecast experiments.
A strand of behavioral finance has been dubbed Quantitative Behavioral Finance, which
uses mathematical and statistical methodology to understand behavioral biases in
conjunction with valuation. Some of this endeavor has been lead by Gunduz Caginalp
(Professor of Mathematics and Editor of Journal of Behavioral Finance during 2001-
2004) and collaborators including Vernon Smith (2002 Nobel Laureate in Economics),
David Porter, Don Balenovich, Vladimira Ilieva, Ahmet Duran, Huseyin Merdan).
Studies by Jeff Madura, Ray Sturm and others have demonstrated significant behavioral
effects in stocks and exchange traded funds. Among other topics, quantitative behavioral
finance studies behavioral effects together with the non-classical assumption of the
finiteness of assets.