Shobha

  The Big Mac Index, introduced by  The Economist  in 1986, is a lighthearted yet widely recognized, comprehensive, and  significant indicator of the global economy and currency valuation . It compares the price of a McDonald's Big Mac across nations to measure  purchasing power parity  (PPP)—the rate at which currency should convert to buy equal goods.   Key Aspects of the Big Mac Index Purpose:  It acts as an informal, digestible tool to determine if a currency is  undervalued or overvalued  against the US dollar. "Burgernomics":  The term coined for this method, which argues that in the long run, exchange rates should adjust so that a basket of goods (in this case, one burger) costs the same everywhere. The 2026 Context:  According to 2026 data, a Big Mac in the U.S. costs around $5.79. As of January 2026, the  British pound is 15.7% overvalued against the US dollar , with a Big Mac costing £5.29 in Britain compared to ...

  Case let and discussion questions on corporate finance Case study 1: Profit vs Wealth Maximisation Falcon Electronics experienced a 22% decline in quarterly profits due to heavy R&D expenditure However, the market price of shares increased , leading to a higher market capitalisation . This situation clearly highlights the classic conflict between Profit Maximisation (short-term focus) and Wealth Maximisation (long-term value creation). While accounting profits have reduced, shareholder wealth has increased . Discussion question. 1.    Should Management Continue Heavy R&D? Justify with appropriate explanation     Case Study 2 : Interface Between Finance and Other Business Functions Bright Wave Appliances Pvt. Ltd. is a mid-sized company manufacturing home appliances such as mixers, air coolers, and induction stoves. Recently, the company announced plans to launch an energy-efficient mixer grinder to meet growing consumer demand. To m...

  Rising NPAs in State Bank of India (SBI) – Lessons from Corporate Lending In the years following India’s rapid economic expansion, the State Bank of India (SBI) stood at the forefront of nation-building. As the country’s largest public sector bank, SBI actively financed large infrastructure, power, steel, and telecom projects, believing these sectors would drive long-term growth. During 2014–2016, SBI approved sizeable loans to several corporate groups. These companies promised strong future cash flows and timely repayment. Initially, everything appeared normal—projects were sanctioned, funds were disbursed, and interest payments began to flow. However, problems slowly started emerging. Many of the funded projects faced delays due to regulatory hurdles, land acquisition issues, and cost overruns. At the same time, a global slowdown caused a sharp fall in steel and commodity prices, severely affecting the revenues of borrowing companies. As profits declined, borrowers bega...

  Smart Saving: The First Step Toward Financial Freedom In today’s fast-paced world, earning money is important—but saving it wisely is what truly builds financial security . Smart saving isn’t about cutting down every expense or living a restricted life. Instead, it’s about making intentional choices with your money so that you can meet your future goals while still enjoying the present. Many people believe saving is simply what remains after spending. In reality, smart savers follow a different rule: save first, spend later . This mindset shift is the foundation of financial stability. Whether you’re a student, a salaried professional, or an entrepreneur, developing the habit of saving early can make a significant difference over time. Smart saving also means having a plan . Setting clear goals—such as building an emergency fund, buying a home, starting a business, or planning for retirement—helps give direction to your savings. Without a goal, it’s easy to lose track and spe...