Corporate finance deals with funding sources and capital structure to maximize shareholder value. Two main sub-disciplines: capital budgeting and working capital management. Investment banking evaluates companies' financial needs and raises appropriate capital
Net debt/EBITDA ratio compares company's liabilities to EBITDA (earnings before interest, taxes, depreciation). Net debt excludes liquid assets like cash and cash equivalents. EBITDA represents operating cash flow and is used as proxy for short-term debt
FCF represents cash generated after accounting for operational outflows. Calculated using operating activities or EBIT with adjustments for non-cash items. Excludes interest payments from the definition
Current ratio measures company's ability to pay short-term obligations within one year. Calculated by dividing current assets by current liabilities. Current assets include cash, inventory, and receivables. Current liabilities comprise accounts payable, wages, and short-term debts
Operating cash flow represents cash generated from normal business operations. First section of cash flow statement showing cash from investing and financing. Helps assess company's ability to maintain operations without external financing
IAS 21 governs accounting for foreign currency transactions and operations. Standard was adopted in 2001, revised in 2003 and amended in 2005. Applies to entities with foreign currency transactions and operations