ArtificaLab International

ศวัสดีค่ะ. Greetings from TrioSoft Business Ventures!. Our Motto: ICT and Financial Education for Everyone!!

As a Startup Team, with Expertise in CFA Financial Education, ICT Background, we are dedicated to provide Financial & ICT Courses for Young Trainees, and Professionals.

03/10/2023

WACC, aka, Weighted Average Cost of Capital
=> Today.., we will talk about the WACC, which is mainly used to determine the Firm’s Cost of Capital, for Both shareholders and debtholders. For investors, it is the very important concept to understand about it!!
Actually, WACC considers on all 3 components of cost of capital:
(1) For Preferred Shares,
(2) For Common shares
(3) For Debt Issues.
Thus, we have to take the average of these three by, using the weights of these assets the firm deploy’s on its Capital Structure.
The formula is deployed as follows:
WACC = wd [ kd (1-t) ] + wps (kps) + wce (kce)
Where wd = weight of debt, kd (1 -t) = after-tax cost of debt,
wps = weight of preferred shares, kps = cost of preferred shares,
wce = weight of common debt, kce = cost of equity

So then, why WACC value is important to investors ??
The main reason is investors use WACC, as the rate for investor’s required rate of return for a typical company. When calculating Discounted Cash Flow (DCF) analysis, WACC is also used as the discount rate.

Thank you for your attention for now…, the practical application of WACC will be discussed later.. in Seminar Workshops.. khub!
#การเงิน #การลงทุน

03/10/2023

Indicators of Economies…

Today.., we will talk about the Economic Indicators; including Leading, Lagging and Coincident Indicators.. Investor should understand these well, so that they could predict what the Economy could happen in future, based on those Indicators’ results.
Actually, Economic Indicators are usually released by the Government, but also could be also done by other organizations and Universities. For now, we could say, that there can be 3 types of it:
(1) Leading Indicators: are some kinds of economic data that usually reflects the future trends and movements of the economy. These include: “Purchasing Manager’s Index”, “Durable Goods Orders”, “Consumer Confidence Index”, “Jobless Claims” etc.

(2) Lagging Indicators: unlike Leading.., Lagging shows economic data, that only reflects after the effects of Economic Activity. These might include: “Inventory-Sales Ratio”, “Avg Duration of unemployment”, “Commercial and industrial loans”, “Change in consumer price index” etc.

(3) Co-incident Indicators: refers to economic data, that reflects at the same time.., thus might include: “Employees on nonfarm payrolls”, “Real personal income”, “Manufacturing and trade sales” etc..

Some of these indicators are complex, and hard to understand, however, just understanding some basic concepts are enough for this topic…

Thank you for your attention for now…,
#การเงิน #การลงทุน

03/10/2023

The role of CPI (Consumer Price Index) in measuring Inflation…

Today.., we will talk about CPI, also known as Consumer Price Index, which is the Index, Governments published to measure the Inflation.. So what is CPI ??.., and how it is calculated?? Now.., let’s explore…

Actually, CPI measures the Average change in prices for the basket of goods and services over time.

There are other Alternatives to measure Inflation such as “PCE (Personal Consumption Expenditures), “GDP Deflator”, “PPI (Producer Price Index)”.., but mainly CPI is used to measure the Inflation..

Within the CPI Index, the categories in that CPI Index includes “Food”, “Energy”, “Medical care”, “Transportation”, “Housing”, “Education” and other goods and services.., that make up the CPI Index.

Thank you for your attention for now…,
#การเงิน #การลงทุน

03/10/2023

The Term “Inflation”, “Disinflation”, “Deflation”, “Hyperinflation”

Today.., we will explore 4 Different Important terms when exploring about the Economics… Matters.., Some of the terms are similar in the Names.. but their Meaning Statements are very Different!!

The first one is about “Inflation”…, As we know, Inflation is the term we used to show the Percentage (%) that the overall prices of goods and services in our economy RISES over the period of time. Thus.., we can said that it reduces the buying power of consumers.., since Money (Cash) is devalued over time..

The second term “Disinflation”, is also inflation, but different meanings. It is also the Inflation rate, but the rate is decreasing over time.., for example, from 5% inflation rate to 3% inflation rate.

The next term is “Deflation”, in which it is just the opposite of inflation, That is, Inflation rate is now less than 0%. Thus, the buying power of consumers is increased!
The last term is “Hyperinflation”, in which the prices of good increases very too rapidly, while large increase of money supply comes into the economy due to the Government’s Monetary Policies.

So.., as we understood some of the above concepts.., now let’s learn what causes Inflation in our Economies ???

Yep.. we could say that the first reason is due to (1) Cost-push inflation and the second reason is (2) Demand-pull inflation..
We will talk about that later… For now.., let’s stop here and
Thank you for your attention for now…,
#การเงิน #การลงทุน

02/10/2023

Let’s Explore Different Schools of Thought…!
Today.., we will explore on the Economic Schools of Thought. Different types of Economists argue on how the Economy should be structured, the Supply & Demand forces, the Role of Governmental Intervention…. For investors, we need to explore a little bit about this subject.., since these give us the Foundation for understanding Economics..!

The first one is the Neo-classical Economics: which believed that Supply and Demand are the driving forces of the whole Economy. Technology is believed to be the major factor in Aggregate Supply and Demand shifts…

The second one is Austrian School of Thought: formed during the 19th century. In this case, due to Government interventions, Economies occur in boom and bust cycles.., which means Good Economic Welfare and Bad Economic Welfare occurs. The role of Money and Government is more focused.

The third one is the Keynesian School of Thought; in which the people who run the businesses cause the Boom and bust cycles. The Keynesian stated that Business Owner’s Expectations: Optimism and Pessimism causes to overproduce and underproduce.

The fourth one is the Monetarists School of Thought; which believes in the role of Money Supply. Monetarists believed that Governments must increase the Money Supply steadily to support for the Natural Economic Growth. The most famous “Keynesian’s Quantity Theory of Money, MV = PQ” is formed due to this Economic Thought.

The last one is the New Classical Theory based on “Real Business Cycle Theory”, in which it stated that External Shocks are the main factors for changing the Business Cycles (Boom and Bust).

Thank you for your attention for now…,
#การเงิน #การลงทุน

02/10/2023

Let’s Explore the Market Structures in Economy...
Today.., we will explore on the Market Structures, of the Economy. This need to be understood in a way.., related with Financial Analysis Subject.
The fact is that based on the Market Structures, investors can analyze the nature of Competition for goods and services of the targeted Firm, they want to analyze.
Based on Economic Theories, we could explain that 4 Types of Market Structures exist as follows:
(1) Perfect Competition: In this Market structure, lots of small companies exist and competing each other. The products are similar and, no pricing power for them.

(2) Monopolistic Competition: Like Perfect Competition, too many sellers exist and they could compete in differentiation, rather than on Price only.

(3) Oligopoly: A few sellers only exist such as Petrol Fuel Stations, which compete with each other but mutually agree to restrict production and control the price. Cartels are formed in this Structure.

(4) Monopoly: like State Electricity Services, only 1 firm provides, usually on the National Level.
Thus, we should also have General Knowledge on these Firm Structures, since understanding them would help a lot better in Analyzing the Firms’ Business.

Thank you for your attention for now…,
#การเงิน #การลงทุน

02/10/2023

Du Pont Analysis in Financial Ratios Analysis
Today.., we will explore on “Du Pont Analysis”, which is the Framework to discover the Strengths and Weaknesses of the Target Company.
Generally, Du Pont Analysis formulas and the framework is based on breaking down the Components of “ROE (Return on Equity)” Ratio.
The name “Du Pont” comes from the DuPont Corporation, a chemical company in US, developed by Donaldson Brown, a DuPont Engineer.

Usually, investors use 3-step DuPont Formula or 5-step DuPont Formula.
=> The starting point of DuPont Formula is “ROE = Net Income / Avg Shareholder’s Equity”.
=> Thus, for 3-step DuPont Formula, the above ROE is rearranged as follows:
DuPont ROE = (Net Income/Revenue) x (Revenue/Total Assets) x (Total Assets/Shareholder’s Equity)
While: the 1st term is “Net Profit Margin”, the 2nd term is “Asset Turnover Ratio”, and the 3rd term is “Financial Leverage Ratio”.

=> For 5-step DuPont Formula, the ROE is further rearranged as follows:
DuPont ROE = (Net Income / Pre-Tax Income) x (Pre-Tax Income / EBIT ) x (EBIT / Revenue) x (Revenue/Total Assets) x (Total Assets/Shareholder’s Equity)
While: the 1st term is “Tax Burden”, the 2nd term is “Interest Burden”, the 3rd term is “Operating Margin”, the 4th term is “Asset Turnover”, and the last 5th term is “Financial Leverage Ratio”.

So.., for our readers..now, I hope this knowledge would be useful to you.., Later we will do Knowledge Seminar and Practical Courses.. for Everyone..,
Thank you for your attention for now…,
#การเงิน #การลงทุน

02/10/2023

Quick Introduction on Financial Ratios.., and Lets Explore them!

Today.., we will talk explore on the Financial Ratios.., and how many Categories there exist for these Financial Ratios ??? In Finance, for every Financial Statement Analysis, when processing the Data from the Financial Statements, in some point.., we may need to calculate the Commonly-used Financial Ratios.

(1) Activity Ratios: this category shows how the Company could handle efficiently on day-to-day tasks such as Receivables collection and Inventory Management.
We used some of these ratios such as: “Inventory Turnover”, “Receivables turnover”, “Total Asset Turnover”, “Days of Inventory on Hand (DOH)”, “Days of Sales Outstanding (DSO)” etc.

(2) Liquidity Ratios: in this category, these ratios show investors how the Company have enough Liquid assets (mainly Cash) to give Short-term obligations such as Interest.
Some of these Liquidity ratios we used include: Current Ratio, Quick Ratio, Cash Ratio etc.

(3) Solvency Ratios: in this category, this type of ratios is intended for Long-term obligations. Some of these include: “D/E Ratio (Debt-to-Equity Ratio)”, “Financial Leverage Ratio”, “D/A Ratio (Debt-to-Assets Ratio)” etc.

(4) Profitability Ratio: these Ratios show how the Company is making enough Profits from using their own Assets and Resources. For example, Gross Profit Margin Ratio, Net Profit Margin Ratio, Operating Profit Margin Ratio etc. are some of these included in this category.

(5) Valuation Ratios: this include valuing the Company’s Market Valuation, especially useful for Public Companies. Investors can use this category ratios to determine whether the Company is Overvalued or Undervalued. Some of these examples include: P/E Ratio (Price to Earnings Ratio), P/B Ratio (Price/Book Value Ratio), EV/EBIDTA Ratio (Enterprise Value / Earnings before Interest, Depreciation, and Taxes) etc.

Thank you for your attention for now…,
#การเงิน #การลงทุน

02/10/2023

Lets’ Explore Financial Reporting Standards: IFRS and US.GAAP.

=> Today.., we will talk about the Two Accounting Standards used by Countries in the World, in Financial Reporting. The first one is the IFRS Standards, while the second one is the US. GAAP…Ok.., for now let’s explore further..

Before we further explore both IFRS and US GAAP, the first question we need to ask is “Why we need Standardized Accounting Standards” in Financial Reporting.., and what is Financial Reporting ???

When we have to analyze the Financial Statements of the Company / Organization.., we have to check their 3 Statements usually: (1) The Income Statement, (2) the Balance Sheet (Statement of Financial Position) and (3) Cashflow statements.

Therefore, when investors want to check, and compare between Companies’ Financial Statements.., we need to have the Same Standards applied in every Company’s Financial Statements.

In this way, we can protect Investors from Mis-statements, reduce fraud.. and deception, while ensuring Fairness, Transparency, and Accuracy of the Financial Statements provided.

The first one, IFRS refers to “International Financial Reporting Standards”, while the second one, US. GAAP refers to “United States Generally Accepted Accounting Principles”.

In fact, the most distinguished fact is that the IFRS is more popular and has been widely used over 110 Countries worldwide, including Thailand. In Thailand, we used “Thai Financial Reporting Standards (TFRS)”. Also LIFO (Last In First Out) Inventory Methods is NOT ALLOWED in IFRS.

However, US GAAP is more widely flexible, and is mainly used in United States ONLY. Here, LIFO (Last In First Out) or FIFO (First In First Out) Valuation Methods can be used..

Details will be specified later.., when we do Free Seminar Courses khub!.

So.., for our readers..now, I hope this knowledge would be useful to you.., Later we will do Knowledge Seminar and Practical Courses.. for Everyone..,
Thank you for your attention for now…,
#การเงิน #การลงทุน

02/10/2023

Today.., we will talk about Derivatives.., which are a kind of complex financial instruments.

In fact, Derivatives are one of the Financial Instruments, in which their value depends on its underlying asset.

For example, these underlying assets might include stocks, bonds, currencies, commodities, and even Interest Rates etc. As the underlying asset’s price fluctuates (changes), the derivatives value will be changing based on that underlying asset.

However, the most important thing is that we, the investors, use Derivatives to respond to, especially to hedge the risks in the value of the underlying assets.

The Most Popular Types of Derivatives include:
Futures: they are mostly traded on Standardized Exchanges, such as Chicago Mercantile Exchange, also known as CME Group. Compared with Forward Contracts, they are not flexible as much as Forward Contracts. However, the risk of counterparty is reduced, since there is no way both parties (buyers and sellers) can default on the contract.., since settlement is clearly done by the Broker Exchange.

Forwards: this Forward contracts are similar to Futures Contracts.., However, they are mostly traded on OTC (Over-the-Counter).., which means they are just private contracts between the buyer and the seller. In fact, being unregulated, they have more risks on being default than the Future Contracts.

Options: Mostly, there are two types of Options: American Options and European Options. As the name goes, “Option” is the Financial Contract, with no obligation to buy or sell in the future.., from the Buyer’s Side.

Swaps: Under this “Swaps” Contract, Swaps allow any two parties to exchange cash flows or liabilities to reduce their costs or generate profits. Common examples of Swaps include: Interest Rates, Currencies, Commodities, Credit Defaults, etc..,

So.., for our readers..now, I hope this knowledge would be useful to you.., Later we will do Knowledge Seminar and Practical Courses.. for Everyone..,
Thank you for your attention for now…,
#การเงิน #การลงทุน

01/10/2023

The Word “ETFs” ??? What are they??

Now after exploring on Mutual Funds.., we will explore on ETFs. ETFs, also known as “Exchanged Traded Funds” are similar to the Mutual Funds…, but they are not the same…
In fact, ETFs trade like a stock, in which they could be sold and bought on the Exchange!.. with the current market price..

Thus, like Mutual Funds, ETFs include a basket of Investment Securities: Equities, Stocks, Bonds, other Investments and so on..

Another more interesting part is almost all ETFs are Passively-Managed ETFs, in which they are often invested to match a particular Index such as S&P 500 Index, SET50 Index etc.

Many Types of ETFs are available including:
Bond/Fixed Income ETFs: include a basket of different types of Bonds such as Corporate Bonds, Government Bonds, Municipal Bonds etc.

Equity ETFs: include a basket of Stocks, usually targeting on a Specific Sector such as Industrial, Automotive, etc.

Commodity ETFs: include a basket of them, such as Gold, Crude Oil, Metal, Silver etc.

Currency ETFs: include a basket of different currency pairs, including domestic and foreign currency.
And others etc..

So.., for our readers..now, I hope this knowledge would be useful to you.., Later we will do Knowledge Seminar and Practical Courses.. for Everyone..,
Thank you for your attention for now…,
#การเงิน #การลงทุน

01/10/2023

What are Mutual Funds??

Now lets’ learn about Mutual Funds…, which are a type of Financial Asset, that everyone can be the Investor by starting the investments with a very few amount.
In fact, they usually must be operated by the Fund Manager, who manage the Fund’s Assets and invest in Managed Portfolios such as Bonds, Equities, Stocks, Indexes, Real Estate and other securities mixed together.

As a result, the Managed Portfolio will give Investors’ Return w
However, there are many types of Mutual funds, in which they are designed to target different types of Investors: with Each Stated Investment Objectives, and Expected Returns.

So lets explore why investors should invest in Mutual Funds ???

The first point is that with Mutual Funds, investors now could gain exposure to Hundreds of Stocks, Bonds, Equities, and other Investments, that each Individual Investor is unable to do so himself.

That is the main attraction for Mutual Funds..
However, when you decide to invest in Mutual Funds, we need to make sure whether we would like to invest in Actively managed or Passively Managed Mutual Funds…
Actively managed Mutual Funds mostly have the Fund Manager, who actively make decisions on how to invest the Fund’s Money.

Their target is to outperform / exceed their target’s benchmark index.
But, Passively Managed Mutual Funds are used to try to replicate the Specific Benchmark. For example, the Benchmark can be S&P 500 Index.

For now.., we will stop here for the Knowledge of Mutual Funds…. We will talk about this details later… from now on..

Thank you for your attention
#การเงิน #การลงทุน