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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 Questioning Skills Sales Presentation Skills Gaining Commitment Sales Skills #1 Buyer Seller Relationship Skills FACT: 82% of Salespeople Fail to Differentiate 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 Questioning Skills 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." ------> Enlarge 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 this act? 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 commitment. 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 its people. 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 respective jobs. 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 skills. 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 India. 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 programme. 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. Bench Press Sit Ups Shoulder Press Chest Press Lat Pull downs Lower Back Extensions Tricep Press Calf Raise Bicep Curls Leg Curls Leg Extension Leg Press These general exercises give a balanced development, and provide a strong base upon which highly specific strength training programs can be built. Muscle Movement 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 Exercise Program 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 exercise 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 sweat it! 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 structure. 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 organization.  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 inheritance)? How does tax policy (tax subsidies or penalties) affect personal financial decisions? How does credit affect an individual's financial standing? How can one plan for a secure financial future in an environment of economic instability? 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.  Capital 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, amortisation, etc) 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 Suppliers credit: Credit on ordinary open account Installment sales Bills of exchange Credit cards Contractor's credit Factoring of debtors Cash credit Cpf credits  Factors which influence credit conditions Nature of the business's activities Financial position Product durability 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 Increases sales Reduces bad debts Increases profits Builds customer loyalty Builds confidence of financial industry increase company capitlisation  Sources of information on creditworthiness Business references Bank references credit agencies Chambers of commerce Employers Credit application forms  Duties of the credit department Legal action 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.  Stock 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. Stockpiling Main article: Cornering the market This refers to the purchase of stock at the right time, at the right price and in the right quantities. 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 examples: Obsolescence 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 stock level. 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.  Cash  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 expenses. 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 credit. Liquidity  Management of fixed assets  Depreciation 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.  Insurance Main article: Insurance Insurance is the undertaking of one party to indemnify another, in exchange for a premium, against a certain eventuality. Uninsured risks Bad debt Changes in fashion Time lapses between ordering and delivery New machinery or technology Different prices at different places Requirements of an insurance contract Insurable interest 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. Good faith 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 concerned with 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. It studies: Valuation - Determination of the fair value of an asset o How risky is the asset? (identification of the asset appropriate discount rate) 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.