TIME VALUE OF MONEY

TIME VALUE OF MONEY

Future Value

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The Future Value of a cash flow represents the amount, at some time in the future, that an investment made today will grow to if it is invested to earn a specific interest rate. For example, if you were to deposit $100 today in a bank account to earn an interest rate of 10% compounded annually, this investment will grow to $110 in one year. This can be shown as follows:

Year 1

$100(1 + 0.10) = $110

At the end of two years, the initial investment will have grown to $121. Notice that the investment earned $11 in interest during the second year, whereas, it only earned $10 in interest during the first year. Thus, in the second year, interest was earned not only on the initial investment of $100 but also on the $10 in interest that was paid at the end of the first year. This occurs because the interest rate in the example is a compound interest rate.

Compound Interest

Under compound interest, interest is earned not only on the initial principal but also on the accumulated interest. Interest begins to be earned on the accumulated interest as soon as it is paid, which occurs at the end of each compounding period. This is in contrast to simple interest, under which interest is only earned on the initial principal. Valuations should generally be based on compound interest because, after the interest has been paid, the full amount, i.e., the initial principal plus interest, could be withdrawn and reinvested elsewhere. Thus, interest on the new investment would be earned on the full amount.

The interest rate in the example is 10% compounded annually. This implies that interest is paid annually. Thus the balance in the account was $110 at the end of the first year. Thus, in the second year the account pays 10% on the initial principal of $100 and the $10 of interest earned in the first year. Thus, the $121 balance in the account after two years can be computed as follows:

Year 2

$110(1+0.10) = $121 or $100(1+0.10)(1+0.10) = $121 or $100(1+0.10)2 = $121

If the money was left in the account for one more year, interest would be earned on $121, i.e., the initial principal of $100, the $10 in interest paid at the end of year 1, and the $11 in interest paid at the end of year 2. Thus the balance in the account at the end of year three is $133.10. This can be computed as follows:

Year 3

$121(1+0.10) = $133.10 or $100(1+0.10) (1+0.10) (1+0.10) = $133.10 or $100 (1+0.10)3 = $133.10

A pattern should be becoming apparent. The Future Value of an initial investment at a given interest rate compounded annually at any point in the future can be found using the following equation:

where

• FV_t = the Future Value at the end of year t,
• CF₀ = the initial investment,
• r = the annually compounded interest rate, and
• t = the number of years.

Present Value

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Present Value describes the process of determining what a cash flow to be received in the future is worth in today's dollars. Therefore, the Present Value of a future cash flow represents the amount of money today which, if invested at a particular interest rate, will grow to the amount of the future cash flow at that time in the future. The process of finding present values is called Discounting and the interest rate used to calculate present values is called the discount rate. For example, the Present Value of $100 to be received one year from now is $90.91 if the discount rate is 10% compounded annually. This can be demonstrated as follows: (Refer to the Future Value page if you are unfamiliar with the calculations.)

One Year 

$90.91(1 + 0.10) = $100 or

$90.91 = $100/(1 + 0.10)

Notice that the Future Value Equation is used to describe the relationship between the present value and the future value. Thus, the Present Value of $100 to be received in two years can be shown to be $82.64 if the discount rate is 10%.

Two Years 

$82.64(1 + 0.10)2 = $100 or

$82.64 = $100/(1 + 0.10)2

A pattern should be becoming apparent. The following equation can be used to calculate the Present Value of a future cash flow given the discount rate and number of years in the future that the cash flow occurs. (This equation can be obtained algebraically from the Future Value Equation.)

where

PV = Present Value

CFt = Future Cash Flow which occurs t years from now

r = the interest or discount rate

t = the number of years

Present Value Example 

Find the Present Value of $100 to be received 3 years from today if the interest rate is 10%.

Solution:

  Present Value

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Present Value describes the process of determining what a cash flow to be received in the future is worth in today's dollars. Therefore, the Present Value of a future cash flow represents the amount of money today which, if invested at a particular interest rate, will grow to the amount of the future cash flow at that time in the future. The process of finding present values is called Discounting and the interest rate used to calculate present values is called the discount rate. For example, the Present Value of $100 to be received one year from now is $90.91 if the discount rate is 10% compounded annually. This can be demonstrated as follows: (Refer to the Future Value page if you are unfamiliar with the calculations.)

One Year

$90.91(1 + 0.10) = $100 or $90.91 = $100/(1 + 0.10)

Notice that the Future Value Equation is used to describe the relationship between the present value and the future value. Thus, the Present Value of $100 to be received in two years can be shown to be $82.64 if the discount rate is 10%.

Two Years

$82.64(1 + 0.10)2 = $100 or $82.64 = $100/(1 + 0.10)2

A pattern should be becoming apparent. The following equation can be used to calculate the Present Value of a future cash flow given the discount rate and number of years in the future that the cash flow occurs. (This equation can be obtained algebraically from the Future Value Equation.)

where

• PV = Present Value
• CF_t = Future Cash Flow which occurs t years from now
• r = the interest or discount rate
• t = the number of years

Present Value Example

Find the Present Value of $100 to be received 3 years from today if the interest rate is 10%. Solution: Top of Form Bottom of Form

Cash Flow Streams

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Present Value

The Present Value of a Cash Flow Stream is equal to the sum of the Present Values of the individual cash flows. To see this, consider an investment which promises to pay $100 one year from now and $200 two years from now. If an investor were given a choice of this investment or two alternative investments, one promising to pay $100 one year from now and the other promising to pay $200 two years from now, clearly, he would be indifferent between the two choices. (Assuming that the investments were all of equal risk, i.e., the discount rate is the same.) This is because the cash flows that the investor would receive at each point in time in the future are the same under either alternative. Thus, if the discount rate is 10%, the Present Value of the investment can be found as follows:

Present Value of the Investment

PV = $100/(1 + 0.10) + $200/(1 + 0.10)2 PV = $90.91 + $165.29 = $256.20

The following equation can be used to find the Present Value of a Cash Flow Stream.

where

• PV = the Present Value of the Cash Flow Stream,
• CF_t = the cash flow which occurs at the end of year t,
• r = the discount rate,
• t = the year, which ranges from zero to n, and
• n = the last year in which a cash flow occurs.

Present Value Example

Find the Present Value of the following cash flow stream given that the interest rate is 10%. Solution: Top of Form Bottom of Form

Cash Flow Streams

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Present Value

The Present Value of a Cash Flow Stream is equal to the sum of the Present Values of the individual cash flows. To see this, consider an investment which promises to pay $100 one year from now and $200 two years from now. If an investor were given a choice of this investment or two alternative investments, one promising to pay $100 one year from now and the other promising to pay $200 two years from now, clearly, he would be indifferent between the two choices. (Assuming that the investments were all of equal risk, i.e., the discount rate is the same.) This is because the cash flows that the investor would receive at each point in time in the future are the same under either alternative. Thus, if the discount rate is 10%, the Present Value of the investment can be found as follows:

Present Value of the Investment

PV = $100/(1 + 0.10) + $200/(1 + 0.10)2 PV = $90.91 + $165.29 = $256.20

The following equation can be used to find the Present Value of a Cash Flow Stream.

where

• PV = the Present Value of the Cash Flow Stream,
• CF_t = the cash flow which occurs at the end of year t,
• r = the discount rate,
• t = the year, which ranges from zero to n, and
• n = the last year in which a cash flow occurs.

Present Value Example

Find the Present Value of the following cash flow stream given that the interest rate is 10%. Solution:

Annuities

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An Annuity is a cash flow stream which adheres to a specific pattern. Namely, an Annuity is a cash flow stream in which the cash flows are level (i.e., all of the cash flows are equal) and the cash flows occur at a regular interval. The annuity cash flows are called annuity payments or simply payments. Thus, the following cash flow stream is an annuity.

Figure 1

While, the following cash flow stream is not an annuity because the payments do not occur at a regular interval.

Figure 2

When a cash flow stream is of the form given in Figure 1, i.e., an annuity, the process of finding the Present Value or Future Value of the cash flow stream is greatly simplified.

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Present Value of an Annuity

The Present Value of an Annuity is equal to the sum of the present values of the annuity payments. This can be found in one step through the use of the following equation:

where

• PVA = The Present Value of the Annuity
• PMT = The Annuity Payment
• r = The Interest or Discount Rate
• t = The Number of Years (also the Number of Annuity Payments)

Consider the annuity of $100 per year for five years given in Figure 1. If the discount rate is equal to 10%, then the Present Value of the Annuity can be found as follows:

Present Value of the Annuity

Top of Form Bottom of Form

Top of Form

Bottom of Form

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Future Value of an Annuity

The Future Value of an Annuity is calculated at the end of the period in which the last annuity payment occurs. The Future Value of the Annuity is equal to the sum of the future values of the individual annuity payments at that time. Thus, the future value of a five year annuity is computed at the end of year five. This can be found in one step through the use of the following equation:

where

• FVA = The Present Value of the Annuity
• PMT = The Annuity Payment
• r = The Interest or Discount Rate
• t = The Number of Years (also the Number of Annuity Payments)

Consider the annuity of $100 per year for five years given in Figure 1. If the discount rate is equal to 10%, then the Future Value of this Annuity at the end of period five can be found as follows:

Future Value of the Annuity

Other Compounding Periods

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In the real world, interest rates are often compounded more often than once per year. By convention, interest rates are quoted on an annual basis. An interest rate, quoted on an annual basis, which is compounded more often than once per year is called a nominal rate, stated rate, quoted rate, or annual percentage rate (APR). For example, mortgages typically require monthly payments and, therefore, the interest rates quoted on mortgages are compounded monthly. Thus, the nominal interest rate on a mortgage might be 12% compounded monthly. However, the relevant rate for valuations is the periodic rate. The periodic rate is computed by dividing the nominal rate by the number of compounding periods per year.

where

• r = the rate per period,
• r_nom = the nominal rate, and
• m = the number of compounding periods per year.

Thus a 12% nominal rate compounded monthly is equivalent to a periodic rate of 1% per month.

The following sections of this page demonstrate how to convert a nominal rate into an equivalent rate that is compounded annually and provide versions of the Present Value and Future Value formulas for use with interest rates compounded more often than once per year. The page concludes with a discussion of continuous compounding.

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EAR - Effective or Equivalent Annual Rate

The Effective or Equivalent Annual Rate (EAR) is the interest rate compounded annually that is equivalent to a nominal rate compounded more than once per year. In other words, present and future values computed using the EAR will be the same as those computed using the nominal rate. The EAR is computed as follows:

• EAR = the Equivalent or Effective Annual Rate,
• r_nom = the nominal interest rate,
• m = the number of compounding periods per year, and

Moreover, it is not proper to directly compare interest rates which have a particular compounding frequency with those that have a different compounding frequency, e.g.,, comparing 10.1% compounded semiannually with 10% compounded quarterly. This problem can be overcome by finding the EAR for each of the rates and then comparing the EARs.

First, let's find the EAR for 10.1% compounded semiannually. Here, m equals 2.

EAR for 10.1% compounded semiannually

Now, let's find the EAR for 10% compounded quarterly. Here m = 4.

EAR for 10% compounded quarterly

Thus, we see that 10% compounded quarterly is actually a higher interest rate than 10.1% compounded semiannually. Given a choice, we would prefer to invest at 10% compounded quarterly.

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Present Value

The Present Value of a future cash flow when the interest rate is compounded m times per year can be calculated as follows:

where

• PV = the Present Value,
• CF_t = the cash flow which occurs at the end of year t,
• r_nom = the nominal interest rate,
• m = the number of compounding periods per year, and
• t = the number of years.
• Thus, mt = the number of compounding periods in t years.

In the earlier discussion of Present Value the interest rate was compounded annually and there was one compounding period per year. In that case m = 1. Thus, our earlier Present Value formula is actually just a special case of this formula since under annual compounding the rate per period is the same as the nominal rate.

Present Value Example

Find the Present Value of $100 to be received 3 years from today if the interest rate is 12% compounded quarterly. Solution: Top of Form Bottom of Form

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Future Value

The Future Value of a future cash flow when the interest rate is compounded m times per year can be calculated as follows:

where

• FV = the Future Value,
• CF₀ = the cash flow which occurs at time 0,
• r_nom = the nominal interest rate,
• m = the number of compounding periods per year, and
• t = the number of years.
• Thus, mt = the number of compounding periods in t years.

Thus, the earlier Future Value formula is actually just a special case of this formula since under annual compounding (i.e., when m = 1) the rate per period is the same as the nominal rate.

Future Value Example

Find the Future Value of 3 years from now of $100 invested today at an interest rate of 10% compounded semiannually. Solution: Top of Form Bottom of Form

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Present Value of an Annuity

The Present Value of an Annuity when the payments occur m times per year and the interest rate is compounded m times per year can be calculated as follows:

where

• PVA = the Present Value,
• PMT = the Annuity Payment which occurs m times per year,
• r_nom = the nominal interest rate,
• m = the number of compounding periods per year, and
• t = the number of years.
• Thus, mt = the number of payments and compounding periods in t years.

This formula can only be applied when the frequency of the annuity payments is the same as the compounding period for the interest rate. For example, if the annuity has quarterly payments the interest rate must be compounded quarterly (m = 4).

Thus, the earlier Present Value on an Annuity formula is actually just a special case of this formula since under annual compounding (i.e., when m = 1) the rate per period is the same as the nominal rate.

Present Value of an Annuity Example

Find the Present Value of an annuity of $100 per month for 2 years if the interest rate is 12% compounded monthly. Solution: Top of Form Bottom of Form

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Future Value of an Annuity

The Future Value of an Annuity when the payments occur m times per year and the interest rate is compounded m times per year can be calculated as follows:

where

• FVA_t = the Future Value of the annuity at the end of year t,
• PMT = the Annuity Payment which occurs m times per year,
• r_nom = the nominal interest rate,
• m = the number of compounding periods per year, and
• t = the number of years.
• Thus, mt = the number of payments and compounding periods in t years.

This formula can only be applied when the frequency of the annuity payments is the same as the compounding period for the interest rate. For example, if the annuity has quarterly payments the interest rate must be compounded quarterly (m = 4). As with the earlier formula, the Future Value is computed at the end of the period in which the last annuity payment occurs.

Thus, the earlier Future Value on an Annuity formula is actually just a special case of this formula since under annual compounding (i.e., when m = 1) the rate per period is the same as the nominal rate.

Future Value of an Annuity Example

Find the Future Value at the end of 3 years of an annuity of $100 per quarter for 3 years if the interest rate is 8% compounded quarterly. Solution: Top of Form Bottom of Form

management versus financial accounting

Financial Accounting vs Management Accounting Management accounting is a field of accounting that analyzes and provides cost information to the internal management for the purposes of planning, controlling and decision making. Management accounting refers to accounting information developed for managers within an organization. CIMA (Chartered Institute of Management Accountants) defines Management accounting as “Management Accounting is the process of identification, measurement, accumulation, analysis, preparation, interpretation, and communication of information that used by management to plan, evaluate, and control within an entity and to assure appropriate use of an accountability for its resources”. This is the phase of accounting concerned with providing information to managers for use in planning and controlling operations and in decision making. Managerial accounting is concerned with providing information to managers i.e. people inside an organization who direct and control its operations. In contrast, financial accounting is concerned with providing information to stockholders, creditors, and others who are outside an organization. Managerial accounting provides the essential data with which organizations are actually run. Financial accounting provides the scorecard by which a company’s past performance is judged. Because it is manager oriented, any study of managerial accounting must be preceded by some understanding of what managers do, the information managers need, and the general business environment. Comparison chart Financial Accounting Management Accounting Format: Financial accounts are supposed to be in accordance with a specific format by IAS so that financial accounts of different organizations can be easily compared. No specific format is designed for management accounting systems. Planning and control: Financial accounting helps in making investment decision, in credit rating. Management Accounting helps management to record, plan and control activities to aid decision-making process. External Vs. Internal: A financial accounting system produces information that is used by parties external to the organization, such as shareholders, bank and creditors. A management accounting system produces information that is used within an organization, by managers and employees. Focus: Financial accounting focuses on history. Management accounting focuses on future & Present. Users: Financial accounting reports are primarily used by external users, such as shareholders, bank and creditors. Management accounting reports are exclusively used by internal users viz. managers and employees. Reporting frequency and duration: Well-defined - annually, semi-annually, quarterly As needed - daily, weekly, monthly. Optional?: Preparing financial accounting reports are mandatory especially for limited companies. There are no legal requirements to prepare reports on management accounting.Ads not by this site Objectives: The main objectives of financial accounting are :i) to disclose the end results of the business, and ii) to depict the financial condition of the business on a particular date. The main objectives of Management Accounting are to help management by providing information that used by management to plan, evaluate, and control. Legal/rules: Drafted according to GAAP - General Accepted Accounting Procedure. Drafted according to management suitability. Accounting process: Follows a full process of recording, classifying, and summmarising for the purpose of analysis and interpretation of the finnancial information. Cost accounts are not preserved under Management Accounting. The necessary data from financial statements and cost ledgers are analyzed. Segment reporting: Pertains to the entire organization or materially significant business units. May pertain to smaller business units or individual departments, in addition to the entire organization. Nature of information: Focus on quantitative information Focus on both qualitative and quantitative information jj COURSE; DIPLOMA IN BUSINES MANAGEMENT BDO1/0025/2010 HARRISON ONYANDO UNIT; ENTERPRENEURSHIP DBM015 SUBJECT; BUSINES PLAN TABLE CONTENT 1. BUSINESS IDEA 2. MARKETING PLAN 3. ORGANIZATION PLAN 4. PRODUTION AND OPERATION PLAN 5. FINANCIAL PLAN 6. EXECUTIVE SUMMARRY 7. APPENDICES 8. BUSINESS IDEA Name of the business Rafiki bakery limited company P.o box 001-20500 Narok Telephone no. 0789133059 Business products The business products are wheat flour, vegetable fats, bread improver, soya, preservative, calcium propionate, sugar, salt and acetic acid which will be obtained from Narok town, due to the facts that the wheat production is in larger scale in Narok County Business ownership The business is owned by the investors and shareholders whom elect board of director to managed the business on their behalf Mission of the venture To enhance mental development among the youth and the society as whole To have ability to reach ones full potential and utilizes the specialized business knowledge, skills they had gain and to pursue the owners ideas through this business To be independent, owned boss and flexibility To pursue financial reward and potentials In order to reduced bureaucracy in as other business To be self employed and create job opportunists for the youth and society as whole Objectives of the venture The primary objectives of the business is to produced and sells goods for profits of course through the satisfaction of customers wants and needs To creates customers for its products and services. The more the customers are created the wide will the market for the goods and larger the profits generation To stay in the market i.e. must offer stagnation by using efficient method of production through the use of technological advancements To have healthy climent for both employees and publics as whole To avoidances of anti-social practices i.e. hoarding, black market, smuggling and over pricing to earn more profits To supply of standard qualities and quanties of products through clearances by the Kenya bureaus of standard [KEBS] Location of the venture The premise of the company is situated along the Nairobi, Narok to Bomet highway road. Two kilometer from Narok town and one kilometer from the main road.Narok county is the highest production of wheat cereals products which will be our main sources of raw materials We obtained clearance from government bodies such as environmental management authority, ministry of health, land and local government through county council of Narok. Business requirement The requirement for the company operations are wheat cereals,labour,power sources, water supplies,fuels,machines,equipments,moto vehicles,land,buildings,linces and permits for the operation of the company; Wheat cereals; is the main sources of raw materials which is abundant in Narok county Power sources; the location of the company is closer to the power line hence connection is cheaper and fuel from Narok town Water supplies; for cooling of the machines when heated up, mixtures of the raw materials and others usages in the company Machines and equipments are very vital in the operation of the business Motor vehicles; for transportation systems into and out the premises. Labour; availability of skilled and unskilled labor because it is closer to the Narok university college and Narok town which has larger population whom are unemployed. Personnel requirements. The board of director. 1. The managing director. 2. Administration in the director office. 3. Secretary in the director office. 4. Clerk in the director office. Finance department. 1. Finance manager. 2. Chief accouter. 3. Clerk accouters. 4. Accounting staff e.g. subordinates. Production department. 1. Production manager and operation manager. 2. Materials manager. 3. Supervisor officer. 4. Machines operators. 5. Production staff. Sales and marketing department. 1. Sales and marketing manager. 2. Public relation manager. 3. Supervisors’ officers. 4. Field staff. 5. Sales and marketing staffs. Personnel’s department. 1. Personnel manager. 2. Employee’s relation officers. 3. Supervisors. 4. Record officers. 5. Personnel staff. Purchasing departments. 1. Purchasing manager. 2. Procurement. 3. Supervisors. 4. Purchasing staffs. Overalls requirements for employees in this company are;. Have computer knowledge’s, skills and experiences. The managements departments must have management roles e.g. interpersonal roles, information roles and decision roles. The management departments must possess management skills e.g. technical skills, interpersonal, conceptual skills and diagnostic skill. Any personnel within the company premises must pose the right qualification for the job he and she is seeking to perform. Any employee within the company premise must have a high moral character, integrity and impartiality in performing any functions, duties and responsibilities. Any employees must have high values of ethic in the company i.e. refuse to participates in dishonest schemes, content updating the employer on how business is doing Environmental and industry analysis. Although the production of these products are very completive the strategies situation of the company is very advantages to its competitors in term of; Consumers; the consumption of these products is very higher and we intend to produced higher quality products. Demographic factors; the region in which we intend to market the products has higher population and some are employed in different sectors within the Narok county and other places thus high demand for the products. Cultural factore;the products are for general consumption i.e. no religion and ethnic are against the products. No government restriction on the products and the formulation of the company. Supplies; the availability of wheat cereals as the main sources of raw materials within Narok County. The products are very friendly to the environment.

Christopher Gardner

Born: February 9, 1954 in Milwaukee, Wisconsin Company: Christopher Gardner International Holdings
Position: CEO
Industry: Financial Services
Country: United States

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The amazing story of Gardner’s life was published as an autobiography, The Pursuit of Happyness, on May 23, 2006, and is the inspiration for the movie of the same title starring Will Smith as Gardner.

A series of circumstances in the early 1980’s left Gardner homeless in San Francisco and the sole guardian of his toddler son. Unwilling to give up Chris Jr. or his dream of financial independence, Gardner started at the bottom. Without connections or a college degree, he earned a spot in the Dean Witter Reynolds training program. Often spending his nights in a church shelter or the bathroom at a Bay Area Rapid Transit station in Oakland, Gardner was the sole trainee offered a job at Dean Witter Reynolds in 1981. He spent 1983-1987 at Bear Stearns & Co., where he became a top earner, and then in 1987, he founded the brokerage firm Gardner Rich & Co in Chicago.
Born February 9, 1954 in Milwaukee, Wisconsin, Gardner never knew his father. He lived with his mother, Bettye Jean Gardner, whom he adored, and, when necessary, in foster homes. Despite a life of hardship and emotional scarring, his mother provided him with strong "spiritual genetics" and taught him some of the greatest lessons of his life, which he follows to this day. Bettye Jean convinced him that in spite of where he came from, he could attain whatever goals he set for himself by saying, "If you want to, one day you could make a million dollars." Gardner believed this to be fact, and knew he would have to find a career he could be passionate about, and one that would allow him to "be world-class at something."

Straight out of high school, Gardner enlisted in the Navy, just like his uncles, his role models, had done. After the military, Gardner went to San Francisco and took a job as a medical supply salesman. Then he reached a turning point in his life. In a parking lot, he met a man driving a red Ferrari. "He was looking for a parking space. I said, 'You can have mine, but I gotta ask you two questions.' The two questions were: What do you do? And how do you do that? Turns out this guy was a stockbroker and he was making $80,000 a month."

That pivotal encounter gave Gardner a clear career goal and he began knocking on doors, applying for training programs at brokerages even though it meant he would have to live on next to nothing while he learned. When he was finally accepted into a program, he left his job in medical sales. But his plans collapsed when the man who offered him the training slot was fired, and Gardner had no job to go back to. Then he was put in jail for $1,200 in parking violations he couldn't pay. Chris Jr.’s mother left and Gardner, despite his circumstances, fought to keep his son because, as he says, "I made up my mind as a young kid that when I had children they were going to know who their father is, and that he isn’t going anywhere."

Finally managing to enter the training program at Dean Witter Reynolds, Gardner’s meager stipend as a trainee meant he, like so many working poor in America, had a job but couldn't make ends meet. Chris’s co-workers never knew he spent his evenings trying to arrange day care, find food and a safe place for him and his son to sleep. After spending nights in a locked bathroom at an Oakland subway station, Gardner persuaded Rev. Cecil Williams, founder of a new shelter program for homeless women at Glide Memorial United Methodist Church, to let him and Chris Jr. stay at the shelter.

Gardner passed his licensing exam in 1981 on the first try. He arrived early, stayed late and worked the phones day after day to lure new clients. He and Chris Jr. got an apartment, and in 1983 he joined Bear, Stearns & Company. After becoming a top producer, first in San Francisco and later in New York, Gardner left in 1987 to establish Gardner Rich & Company, Inc., an institutional brokerage firm specializing in the execution of debt, equity and derivative products transactions for some of the nations largest institutions, public pension plans and unions. The company has expanded into Christopher Gardner International Holdings and now has a business project underway in South Africa.

Gardner reaches out to many programs serving the homeless, donating time, assistance, and funds. Foremost among these are the Glide United Methodist Church in San Francisco and The Cara Program in Chicago. At Glide, Gardner assists with fundraising, donates clothes and shoes, and speaks at services and events. He is also involved in a plan to revitalize and provide new housing in the neighborhood around Glide. At Cara, which assists the homeless and at-risk populations in Chicago with comprehensive job training and placement, Gardner speaks at counseling sessions, assists with permanent job placement, and also donates clothing and shoes.

Gardner serves as a board member of the National Fatherhood Initiative, whose mission is to improve the well-being of children by increasing the proportion of children growing up with involved, responsible, and committed fathers. Gardner was the recipient of the group’s Father of the Year Award in 2002.

Gardner is particularly committed to educational organizations. He serves on the board of the National Education Foundation and sponsors two annual awards: the National Education Association’s National Educational Support Personnel Award and the American Federation of Teachers’ Paraprofessionals and School-Related Personnel (PSRP) Award. He is also involved with the Chicago Teachers’ Union, sponsoring activities and outings for Chicago public school kids.

In addition to the father of the Year Award, Gardner has also been honored by the Los Angeles Commission on Assaults Against Women (LACAAW) with the 25th Annual Humanitarian Award, and by the Continental Africa Chamber of Commerce with the 2006 Friends of Africa Award.

Chris Gardner’s remarkable story of struggle, faith, entrepreneurialism, and fatherly devotion has catapulted him beyond the notoriety he has found on Wall Street. He has been featured on the "Evening News with Dan Rather," "20/20," "Oprah," "The View," CNN, CNBC as well as being the subject of profiles in numerous newspapers and magazines including USA Today, Associated Press, New York Times, Fortune, Reader’s Digest, Chicago Tribune, San Francisco Chronicle, and the Milwaukee Journal Sentinel. He is also a highly sought after speaker.

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