InVestment in CoMModities: An IneVitable tRading opTion..

In recent times, a coroborative curicity pops up among traderes across the countries in commodities & their tradability. Many of them beting over these commodities as an inevitable investment option in coming days. But.. all these words are more prospective over present perspects. Lets find out what these commodities actually do mean.

Commodites can be largely termed as goods having a little distinctive aspect. What differs them from common term is their world wide avilability & acceptability along in the line of consistency with a least variation in standard & quality. Lets take few examples of commodities that are commonly in use like precious metal(gold, silver, copper etc), agricultural products such as rubber, corn, rice ,sugar etc., energy & industrial resources like crude oil, coal & aluminium etc. However their respective trading value varries in accordence with their tradability.

Now lets see how traders play in this market. Although here we deals in commodities, it doesn't necessorily mean that we need to buy or sell commodities in physical sence. Moreover, what actually do mean is to buy a future contract of an underlaying commodity at a certain price at a certain future date more like future trading in equity market. Accordingly, in the mean time the daily price of such commodity varries accordingly. the extent of these varrietions effects in fixing up future contract price. In technical term, commodity trading commonly practices in derivative tools rather than dumping up for further deal in real term.

As I have stated earlier, commodity market gradually growing up with global applosure. Now days commodities are traded accross the countries in various exchanges like Chicago Mercantile Exchange, Australian Securities Exchange, the Tokyo Commodity Exchange etc. These exchanges facilitates the platform for plotting future course of contracts. Now, unlike eqity market, valuation of a commodity depends upon several events strats from environmental to social,political & economical outlooks. For exampale, price of crops varries yearly in accordance with change in climate & it's favourability. Similarly, for crude oil the pricing depends up on economical & political stability of eastern countries as well as economic conditions of other countries. These seriees of fluctuations among commodities helps in fueling momentum in to the commodity market. Accordingly for a trader, need to predict the future contract price taking the factors like cyclical trend in supply & demand, social, economical & political aspects as well as future viability.

Comodity Trading: an emerging Investment option..

Commodities can be defined as goods having wide demand & doesn't differ much in terms of quality. On the basis of such standardized quality, these goods are considered as an useful investment as well as trading options. For instance, gold, silver, crude oil etc doesn't differs much in due course. Apart from these, other popular traded commodities are.. precious metals like gold, silver, copper etc. , agricultural products such as rubber, corn, rice & sugar., energy & industrial resources like crude oil, coal, aluminum etc.

In recent times, may investors & traders are taking their bet in to the commodity market as an inevitable invest option.

Few Tips on Maintaining Cash for your business..

In my previous article, I have tried to depict a detailed discussion up on needs of cash management. We have seen tactful management of cash can have a substantial impact upon profitability of an entity. However, the question of effective cash management rests in efficient maintenance of cash at an sustainable level. Further its also facilitates in better working capital management & accordingly improves the current ratio to define the financial stability of the business.

In recent times, major economic instability across the countries & as the recessionary roll outs ruthlessly in almost every industries, most of the small as well as middle scale business units are finding hard to cope up the financial curse & hence many of them are already winded up & rests are running short of fund. Henceforth, it is crucial concern for every business organization to work out a initial feasibility over the average maintainable level of cash requirements. However, these words doesn't have much value for an entity already in disaster. Henceforth, it will be better of to discuss upon few revival remedies for a staggering concern to get rid of financial rigidity.

For every business entity, the relative strength of available cash & cash equivalents reflects in current ratio. Accordingly, to maintain a healthy current ratio, sufficient amount of liquidity must be put in to business. However, if the available cash & cash equivalents are lagging behind the least requirements, then need to work out upon alternative options. Firstly, as all of us commonly do in time of crisis, evaluate the extent of scraps in process & non performing fixed assets & sale of accordingly to feed your financial needs. Also one need to console his operating activity as per the current economic circumstances where the demand in in downturn day by day. It will further help to bring down the working capital needs. However, it is not always easy to change the level of operational activities due to prospective impact upon cost effectiveness more precisely for big production houses. Secondly, if the above options are not sufficient enough to satisfy the severity, further steps can be taken in negotiation with creditors & debtors. Ask for longer credit period from the creditors as far as possible so also to debtors by keeping a constant track with them & make them to pay at their earliest. Also, if there is any negotiable instruments in hand, these can be easily discounted through any banks. Apart from these, non performing assets like doubtful debtors etc can be discharged off at a discounted value through some agencies & institutions deals in such. Thirdly, taking a term loan is a good option provided the business has the capability to cope up with that. For a public company, further fund can be raised through IPO's & right issues etc. Although, in recent terms I don't think there will be enough response in such practices. Fourthly, federal government of most of the countries in economic dire, offers several revival packages & grants to safeguard the business functions of every scale. As such, before taking off the entire activities, it will be apprehensive for every busines concen to evaluate these options wisely.