A STUDY ON THE PERFORMANCE ANALYSIS OF FACTORING SERVICES IN INDIA

Size: px
Start display at page:

Download "A STUDY ON THE PERFORMANCE ANALYSIS OF FACTORING SERVICES IN INDIA"

Transcription

1 A STUDY ON THE PERFORMANCE ANALYSIS OF FACTORING SERVICES IN INDIA Dr. K. N. KALAIVANI Dr. S. Gopalraju Government First Grade College, Anekal, Bangalore ABSTRACT In the present economy, finance is defined as the provision of money at the time when it is required. This is applicable to all type of industries and service organizations to carry operations and to achieve their targets. Hence, finance is highly indispensable and is the life blood of economic activities. Factor, thus offers a clear solution to the enterprises that it provides finance to his client up to a certain percentage of the unpaid invoices which represent the sale of goods or services to approved customers. The main objective of the study is i) to analyze the factoring service performance of Canbank Factors Ltd., and SBI Factors Ltd., ii) to study the significance of the difference in performance parameters between the sample factoring firms. There are two sample units which were selected among seven Factoring companies all over India. Secondary data were collected for a period of 10 years from to , from the annual reports of the study firms, publications, analytical statements and other financial statements. Null hypotheses were framed and tested in this study. KEY WORDS Factoring, Finance, Performance Parameters, Efficiency, Capital Use, Debtors, Receivables, Invoice Discounting, Liquidity, Insolvency, Transactions, Non Banking Financial Companies (NBFC).

2 INTRODUCTION Finance guides and regulates investment decision and expenditure or they may be about capital expenditure programmers or capital budgeting. To the available funds, any economic transaction consists of buying to selling activities both the activities involve money. So it is true that the financial activity is largely confined to money management. Factoring is one of the important areas which minimize the financial stress of firms. IMPORTANCE OF THE STUDY Corporate performance depends on a number of variables, both internal and external to the company. The major internal factors are efficiency of capital use, productivity of the total employed, growth of gross block and its capacity utilizations, sales turnover and operational efficiency, profitability of the operations, return on capital employed, expansion plans and internal reserves built upon tax planning and accounting practices etc. Trade Credit arises when a firm sells its products or services and does not receive cash immediately. It is an essential marketing tool acting as a bridge for the movement of goods through productions and distribution stage to customers. A firm grants credit to protect its sales from the competitor and to attract the potential customers to buy its products at favourable terms. Trade credit creates accounts receivable or trade debtors. It is referred to as book debts in India. Current assets include substantial portion of debtors. Granting credit and creating debtors amount to the blocking of the firm s funds. The interval between the date of sale and date of payment has to be financed out of working capital. This necessitates the firm to get funds from banks or other sources. Thus, trade debtors represent investment. As substantial amounts are tied up in trade debtors, it needs careful analysis and proper management. FACTORING Selling goods on favorable terms is an important key to achieve growth in the volume of business, with the increase in the volume of production and sales, timely collection and efficient management of receivables has assumed greater importance. A factor provides finance to his client up to a certain percentage of the unpaid invoices which represent the sale of goods or services to approved customers. Factoring as a fund-based financial service, provide resources to finance receivable as well as facilities the collection of receivables. Although such services scenario in the advanced countries, they appeared on the Indian financial sense only in the early nineties as a result of RBI initiatives. Factoring service is of recent origin in India. It owes its genesis to the recommendations of the Shri. Kalyanasundaram study group appointed by the RBI in Pursuant to the Namex International Journal of Management Research 21 Vol. 3, Issue 1, Jan June ISSN

3 acceptance of these recommendations, the first factoring company, SBI factors and commercial Ltd., (SBI FACS) started operation in April Factoring is also called Invoice Discounting or purchase and discount of receivables. Although these can be with recourse or without recourse, normally the risk is taken by the factoring agent. The discount rate includes the loss of interest, risk of credit and risk of loss of both and principal and interest on the amount involved. STATEMENT OF THE PROBLEM Problems relating to finance are endless and countless. Investment in current assets affects the firm s profitability and liquidity. Current assets management that affects a firm s liquidity is yet another important finance function. Current assets should be managed efficiently for safeguarding the firm against the risk of illiquidity. Lack of liquidity in extreme situations can lead to firm s insolvency. A conflict exists between profitability and liquidity while managing current assets. If the firm does not invest sufficient funds in current assets, it may become illiquid and therefore, risky. It would lose profitability as idle current assets would not earn anything. Cash as an asset, irrespective of the firm in which it is held, is that it does not earn any substantial return for the business. In spite of the fact cash is held by the firm with the many motives. Factoring problems are many. Many banks do not issue letter of disclaimer enabling the purchase of book debts by the factor. This is due to the fact that the banks want their clients should confine to them for their entire borrowings. Normally bankers treat Factors as potential competitors. Reserve Bank of India has imposed various measures on the non banking financial companies. The growth of non banking financial companies has been curtained due to strict imposition of rules and regulations by Reserve Bank of India. Further the banks have to suffer heavily during the period of recession. The cost of operations of Factors is very high and the profitability is limited in most of the cases. The Factors face stiff competition from many banking and non-banking companies. Factoring is not a standalone service product. It is a tripartite arrangement and so the buyers and the banker do not entertain the idea of factoring, perceiving it to be an unwanted interference in their relationship with the seller. The factor has to verify the genuineness of trade transactions, when receivables are presented for financing, the genuineness being verified by checking the invoice and other evidences of delivery. In this context there is a felt need for more credit investigating agencies to recommend genuine business transactions. The network of factoring operations in India is relatively small. In India, some of the banking and financial institutions are providing factoring services to the industrial Namex International Journal of Management Research 22 Vol. 3, Issue 1, Jan June ISSN

4 sectors to meet their short term financial requirement. But at the same time factoring services has not been popular as much as other financial services like venture capital, mutual funds and merchant banking. Hence, there is a need to evaluate the role and importance of factoring services in general and understand the service performance of factoring intuitions in particular. Evaluation of the factoring service providing institutions and factoring services world be helpful to both parties of institutions and clients. Ratio of own funds to loan funds does not significantly differ among the study firms; Change in factoring income does not significantly differ among the study firms; Changes in interest expenditure do not significantly differ among the study firms; Rate of change in profit before tax does not significantly differ among the study firms. METHODOLOGY OBJECTIVES OF THE STUDY The prime objectives of the present study are: To trace the history and growth of factoring services; To document the concept of factoring in relation to banking; To examine the factoring service performance of Canbank Factors Ltd; To analyzed the factoring service performance of SBI Factors Ltd; To compare the functions of the sample factoring firms; To identify the problems associated with the factoring and compute the trend in factoring services; To offer suggestions for minimizing the problems and improving the factoring services and its achievements associated. HYPOTHESES The following hypotheses are framed and tested in this study: Sample There are seven factoring companies in India. They are Canbank Factors Limited; SBI Factors and Commercial Services Pvt. Ltd; The Hongkong and Shanghai Banking Corporation Ltd; Foremost Factors Limited; Export Credit Guarantee Corporation of India; Citibank NA, India Small Industries Development Bank of India SIDBI. Among these companies, two companies are operating in Tamil Nadu to greater extent. They are Canbank Factors Limited and SBI Factors and Commercial Services Pvt. Limited. These firms are having their branches in Coimbatore City and in Chennai. In addition, Canbank Factors and SBI Factors are purely in factoring area. Hence these are the prominent companies in Tamil Nadu, that is the Namex International Journal of Management Research 23 Vol. 3, Issue 1, Jan June ISSN

5 study area and they are considered as sample for the purpose of this study. Normally research requires both primary and secondary data. This is purely an analytical research and based on the data provided by the annual reports of the companies. Finance data as such are collected mainly from the annual reports of the companies. In case of doubts, the officials are contacted in person and the data are collected. The data are classified and analyzed as per various financial accounting principles and as opined by the officials of the firms. Research Methodology is the way to systematically solve the research problem. The present study is an analytical study and requires mainly secondary data. Additional Secondary data are collected from various websites, books, and publications of Journals, research publications and other published and unpublished records. The secondary data relating to performance of SBI factors commercial Ltd., and Canbank Factors are collected from records of SBI factors and commercial Ltd., and Canbank Factors. angles. Tools such as t test, f test, multiple regression and other statistical tools are also used to identify the relationship between multiple variables. AREA OF THE STUDY The study considers only two factoring firms. They are SBI Factors Ltd and Can Bank Factors Limited. Both firms are subsidy firms of nationalized banks and the area of study is the entire nation. SCOPE OF THE STUDY Various research studies have been conducted in the field of banking and finance and there are very few studies in the field of factoring. The present study is analyzing the history and growth of factoring services and the concept of factoring. The various types of services offered by study firms are analyzed and the functions of compared. The analysis, finding and suggestions will help the firms to have better understanding of the environment and the possibility of improving productivity and profitability in the organizations. TOOLS USED: Analysis of data is done with various statistical tools. Simple tools such as ratios, percentages and Index numbers are used. Tools such as standard Deviation, co-efficient of variation, growth rate, correlation regression etc., are used for in-depth analysis of financial data. Various financial ratios are utilized and the data are analyzed from various Factoring is a newly developing concept and the number of firms engaged in this field is few. The present study has given an outline for analyzing various concepts and functions of factoring firms. The study can help the firms in identifying the gaps and omissions in their services. Their performance analysis may show the methods for improving their quality of service and can attract more customers in this field. Factoring has Namex International Journal of Management Research 24 Vol. 3, Issue 1, Jan June ISSN

6 reduced the risk of many business firms at a reasonable cost. Hence the present study can help new firms in deciding their services to large number of customers. The study will provide ways and means for new entrepreneurs for entering into the field of factoring. They can get information on the operating cost, profitability and various other financial details from the analysis done in this study. PERIOD OF THE STUDY Secondary data are collected for a period of 10 years from to The data are collected from the annual reports of the companies. Some data are collected from the publications and analytical statements. Some of the data relating to the period have been collection from publications and other financial statements. However, it is ensured that data are collected for a period of ten years for the purpose of the study. LIMITATIONS OF THE STUDY The study is an analytical study and purely depending on secondary data. Many officials have shown reluctance in providing financial data due to the fact that the competition is very high in this field. The study firms have not provided data relating to their clients and their addresses. In spite of repeated visits, only a few clients could be met. The clients refused to provide any data relating to factoring. Hence the opinion of clients could not be collected and analyzed. Only two firms are considered. Other firms are very small in relation to volume of transactions and could not be compared with the study firms. The factoring firms are very much limited in India and hence only two firms are considered for the purpose of this study. SOME OF THE IMPORTANT FINDINGS: OWN FUNDS AND CURRENT ASSETS & OTHERS Current Assets and others in the company are compared with that of own funds. Current assets includes cash and those assets which can be easily converted into cash within a short period of time generally, one year, such as client pre payment account, cheque realizable at outstation, debts purchased account, petty cash, rent advance to premises and loan receivables. The relationship between own funds and current assets are studied and shown in Table 1 for analysis. Own Funds to Current Assets and others = Own Funds / Current Assets and others Namex International Journal of Management Research 25 Vol. 3, Issue 1, Jan June ISSN

7 TABLE No. 1 - OWN FUNDS AND CURRENT ASSETS & OTHERS CANBANK FACTORS (Rs. in Cores) Year Own Funds Trend Percentage Current Assets and others Trend Percentage Ratio TOTAL MEAN SD CV GROWTH CORRE 0.94 Source : Records of Canbank Factors Ltd Table 1 shows the data relating to own funds and current assets and others of Canbank Factors Ltd., It is found that current assets and others during is Rs crores and it has increased to Rs crores. Again, it has increased to Rs crores in Trend percentages are calculated by taking as the base year. The trend percentage for current assets and others in is and for is The increase in current assets and others is around 363 percent during the study period. The ratio of own funds to current assets and others is calculated. The ratio during is 0.22; in is 0.26 and in is There are fluctuations in this ratio and is the highest in the year The mean current assets and others is Rs crores and standard deviation is Rs crores. The coefficient of variation of own fund is and that of current assets and others is The growth rate is calculated and it is found that the growth rate for own funds is and current assets and others is Correlation is calculated and it is This shows that there is positive relationship between own funds and current assets and others. It is inferred that the increase in current assets and others is higher than that of own funds. The ratio of own funds to current assets and others is significantly declining. The co-efficient of variation is higher in the case of current assets and others than that of own funds. OWN FUNDS AND FACTORING INCOMES Factoring incomes in the company are compared with that of own funds. Factoring incomes is the sum of interest Namex International Journal of Management Research 26 Vol. 3, Issue 1, Jan June ISSN

8 charges and discount charges. The relationship between own funds and factoring incomes are studied and shown in Table 2 for analysis. TABLE No. 2: OWN FUNDS AND FACTORING INCOMES CANBANK FACTORS LTD., (Rs. in Crores) Year Own Funds Trend Percentage Factoring Incomes Trend Percentage Ratio TOTAL MEAN SD CV GROWTH CORRE 0.99 Source : Records of Canbank Factors Ltd Table 2 shows that the data relating to own funds and factoring incomes of Canbank Factors Ltd. It is found that factoring incomes during is Rs crores and it has increased in to crores. Again it has increased to Rs crores. Trend percentages are calculated by taking as the base year. The trend percentage for factoring incomes in is and for is The increase in factoring incomes is around 251 percent during the study period. The ratio of own funds to factoring incomes is calculated. The ratio during is 2.66; in is 2.33 and in is The ratio is fluctuating throughout study period and is the highest in the year The mean factoring incomes is Rs crores and standard deviation is Rs crores. The co-efficient of variation of own funds is percent and that of factoring incomes is percent. The growth rate is calculated and it is found that the growth rate for own fund is and factoring incomes is Correlation is calculated and it is This shows that there is a very high positive correlation between own funds and factoring incomes. It is inferred that the increase in own funds is higher than that of factoring incomes. The ratio of own funds to factoring incomes is fluctuating. The co-efficient of variation is higher in the case of factoring incomes than that of own funds. Growth rate is higher in the Namex International Journal of Management Research 27 Vol. 3, Issue 1, Jan June ISSN

9 case of factoring incomes than that of own funds. OWN FUNDS AND CURRENT LIABILITIES AND OTHERS Current liabilities are those obligations which are payable within a short period of generally one year and includes borrowed loans, tax payable, tax deducted at source payable, service tax payable, main office account, salary payable to employees and leave salary. Current liabilities and others are compared with that of own funds. The ratio of Own Funds and Current liabilities and others are calculated and shown in Table 3 for analysis. Table 3 shows the data relating to own funds and current liabilities and others of SBI Factors. It is found that current liabilities and others during is Rs crores and it has decreased in the year to Rs crores. But, it has slightly increased to Rs in Trend percentages are calculated by taking as the base year. The trend percentages for current liabilities and others in is and for is The decrease in current liabilities and others is around 52 percent during the study period. The ratio of own funds to current liabilities and others is calculated. The ratio during is 0.66; in is 1.22 and in is There are fluctuations in this ratio and it is the highest in the last year of study, TABLE No. 3: OWN FUNDS AND CURRENT LIABILITIES AND OTHERS SBI FACTORS (Rs. in crores) Year Own Funds Trend Percentage Current Liabilities and others Trend Percentage Ratio TOTAL MEAN SD CV GROWT H CORRE Source Records of SBI Factors Namex International Journal of Management Research 28 Vol. 3, Issue 1, Jan June ISSN

10 The mean current liabilities and others is Rs crores and standard deviation is Rs crores. The coefficient of variation of own funds is percent and that of current liabilities and others is percent. The growth rate is calculated and it is found that the growth rate for own funds is and current liabilities and others is Correlation is calculated and it is This shows that there is a very low negative relationship between own funds and current liabilities and others. It is inferred that the increase in current liabilities and others is less than that of own funds. The ratio of own funds to current liabilities and others is significantly fluctuating. The coefficient of variation is less in the case of current liabilities and others than that of own funds. Growth rate is less in the case of current liabilities and others than that of own funds. OWN FUNDS AND FACTORING INCOMES Factoring incomes in the company are compared with that of own funds. Factoring incomes is the sum of interest charges and discount charges. The relationship between own funds and factoring incomes are studied and shown in Table 4 for analysis. Year TABLE No. 4: OWN FUNDS AND FACTORING INCOMES SBI FACTORS (Rs. in crores) Own Funds Trend Percentage Factoring Incomes Trend Percentage Ratio TOTAL MEAN SD CV GROWT H CORRE 0.97 Source : Records of SBI Factors It is observed from the Table 4 that the data relating to own funds and factoring incomes of SBI Factors. It is found that factoring incomes during is Rs Crores and it has increased in to crores in Namex International Journal of Management Research 29 Vol. 3, Issue 1, Jan June ISSN

11 Again it has increased to Rs crores. Trend percentages are calculated by taking as the base year. The trend percentage for factoring incomes in is and for is The increase in factoring incomes is around 694 percent during the study period. The ratio of own funds to factoring incomes is calculated. The ratio during is 2.68; in is 2.82 and in is The ratio is fluctuating and is the highest in the year The mean factoring incomes is Rs crores and standard deviation is Rs crores. The co-efficient of variation of own funds is per cent and that of factoring incomes is percent. The growth rate is calculated and it is found that the growth rate for own fund is and factoring incomes is Correlation is calculated and it is This shows that there is a very high positive relationship between own funds and factoring incomes. It is inferred that the increase in factoring incomes is less than that of own funds. The ratio of own funds to factoring incomes is significantly declining. The co-efficient of variation is higher in the case of factoring incomes than that of own funds. Growth rate is higher in the case of factoring incomes than that of own funds. CONCLUSION It is found that change in factoring income does not significantly differ among Canbank factors and SBI factors. The ratio of own funds to interest expenditure does not significantly differ among Canbank factors and SBI factor. Analysis reveals that ratio of own funds to profit before tax does not significantly differ among Canbank factors and SBI factors. BIBLIOGRAPHY BOOKS Avadhani.V. A. (2002), Marketing of Financial Services Himalaya Publications, Mumbai. Baig, N. and Khan, M.A.A.(1990), Entrepreneurship and Business Environment, Balajit Singh. (1961), The Economics of SSI, A case study of SSI establishments of Moradabad, Asia Publishing House, London. Balakrishnan,G.(1961), Financing Small Scale Industries in India, Asia Publishing House, Bombay. Balakrishnan. G (1963), Financing small Industries in India , Asia Publishing House, Bombay. Balu.V (2004), Financial Services to SSI sector, Deep & Deep Publications, New Delhi. Chawla, A.S., (1987), Nationalisation and Growth of Indian Banking, Deep and Deep Publications, New Delhi. JOURNALS AND PERIODICALS Namex International Journal of Management Research 30 Vol. 3, Issue 1, Jan June ISSN

12 Aboudha,C(1996), Small-scale industrial financing in Kenya; Case for venture capital, In D.McCormick & P.O. Pedersen (eds), Small Enterprises; Flexibility and Net working in an African Context (pp ) Nairobi: Oxford University Press. Anil Kumar. (2006), Structure of Enterprises owned by Women Entrepreneurs, The Indian Journal of Commerce, Vol. 59., No.1. Anup Agarwal and Nandu J. Nagarajan, Corporate Capital Structure, Agency Costs, and ownership control-the case of all-equity firms, The journal of Finance, Vol. XLV, No.4, pp Namex International Journal of Management Research 31 Vol. 3, Issue 1, Jan June ISSN

Discounting, Factoring & Forfeiting

Discounting, Factoring & Forfeiting Discounting, Factoring & Forfeiting Introduction Bill Discounting Factoring- Meaning & Definition Modus Operandi Terms of Agreement Functions Types of Factoring Factoring Vs Discounting Cost of Factoring

More information

FINANCING OF WORKING CAPITAL LOAN AND ADVANCE MANAGEMENT

FINANCING OF WORKING CAPITAL LOAN AND ADVANCE MANAGEMENT KAAV INTERNATIONAL JOURNAL OF ECONOMICS,COMMERCE & BUSINESS MANAGEMENT FINANCING OF WORKING CAPITAL LOAN AND ADVANCE MANAGEMENT P. R. HALANI ASSISTANT PROFESSOR (M.COM, B.ED, M.PHIL. GSET, ) SHRI M. P.

More information

ABHINAV NATIONAL MONTHLY REFEREED JOURNAL OF RESEARCH IN COMMERCE & MANAGEMENT www.abhinavjournal.com

ABHINAV NATIONAL MONTHLY REFEREED JOURNAL OF RESEARCH IN COMMERCE & MANAGEMENT www.abhinavjournal.com A STUDY ON WORKING CAPITAL MANAGEMENT THROUGH RATIO ANALYSIS WITH REFERENCE TO KARNATAKA POWER CORPORATION LIMITED Srinivas K T Associate Professor, CIMS-B School, Jayanagar, Bangalore, india Email: srinikeelara@gmail.com

More information

CHAPTER I INTRODUCTION AND DESIGN OF THE STUDY

CHAPTER I INTRODUCTION AND DESIGN OF THE STUDY CHAPTER I INTRODUCTION AND DESIGN OF THE STUDY INTRODUCTION Working capital is the cash available for day to day functions of a business. It is the cash that can be used to foot expected and unplanned

More information

Cash Flow Statement: Comparative Analysis of Financing, Operating and Investing Activities.

Cash Flow Statement: Comparative Analysis of Financing, Operating and Investing Activities. Cash Flow Statement: Comparative Analysis of Financing, Operating and Investing Activities. Ajay G. Paliwal 1 Mukesh B. Ahirrao 2,Dr. V.S.Rana 3 1 Management Student, M.B.A Dept, S.S.B.T s College of Engineering

More information

A STUDY ON ASSET AND LIABILITY MANAGEMENT IN ICICI BANK

A STUDY ON ASSET AND LIABILITY MANAGEMENT IN ICICI BANK A STUDY ON ASSET AND LIABILITY MANAGEMENT IN ICICI BANK Salvin Surjith FP* N. Sathyanarayana** Abstract: Assets and Liabilities Management (ALM) is a dynamic process of planning, organizing, coordinating

More information

Bill Discounting. Exporter. Importer BANKING AND TRADE FINANCE TUTORIAL. Importer s Bank. Exporters Bank INDIA FOREX ADVISORS.

Bill Discounting. Exporter. Importer BANKING AND TRADE FINANCE TUTORIAL. Importer s Bank. Exporters Bank INDIA FOREX ADVISORS. Bill Discounting While discounting a bill, the Bank purchases the bill receivable to the Exporter (i.e. Bill of Exchange or Promissory Note) before its due date and credits the value of the bill to the

More information

PRACTICE QUESTIONS SECURITIES MARKET (BASIC) MODULE. 1) The following are participants in the securities markets. (1 mark)

PRACTICE QUESTIONS SECURITIES MARKET (BASIC) MODULE. 1) The following are participants in the securities markets. (1 mark) PRACTICE QUESTIONS SECURITIES MARKET (BASIC) MODULE 1) The following are participants in the securities markets. (a) Underwriters (b) Debenture Trustees (c) Venture Capital Funds (d) All of the above 2)

More information

Subject. PAPER No. : Financial Management MODULE No. : Factoring services

Subject. PAPER No. : Financial Management MODULE No. : Factoring services Subject Paper No. and Title Module No. and Title Module Tag Paper No.8: Financial Management Module No. 36: Factoring services COM_P8_M36 TABLE OF CONTENTS 1. Learning outcomes 2. Introduction 3. Mode

More information

A STUDY ON WORKING CAPITAL MANAGEMENT OF PHARMACEUTICAL INDUSTRY IN INDIA

A STUDY ON WORKING CAPITAL MANAGEMENT OF PHARMACEUTICAL INDUSTRY IN INDIA 59 Journal of Management and Science ISSN: 2249-1260 e-issn: 2250-1819 Vol.5. No.3 September 2015 A STUDY ON WORKING CAPITAL MANAGEMENT OF PHARMACEUTICAL INDUSTRY IN INDIA Dr.V.Vijayalakshmi a and M.Srividya

More information

The management of Working Capital is one of the

The management of Working Capital is one of the Negative Working Capital and its Impact on Profitability Amit Kumar Arora ACMA, UGC NET, MBA(Finance), M.Com., M.A.(Eco.) Assistant Professor, Department of Management Studies Krishna Institute of Engineering

More information

It is concerned with decisions relating to current assets and current liabilities

It is concerned with decisions relating to current assets and current liabilities It is concerned with decisions relating to current assets and current liabilities Best Buy Co, NA s largest consumer electronics retailer, has performed extremely well over the past decade. Its stock sold

More information

Working Capital Management Analysis: an Empirical study of leading Hotels in India

Working Capital Management Analysis: an Empirical study of leading Hotels in India Working Capital Management Analysis: an Empirical study of leading Hotels in India BASAVARAJESHWARI DIDDIMANI * Research Scholar, Department of Commerce, Mangalore university Mangalore Karnataka *Corresponding

More information

FINANCIAL MANAGEMENT

FINANCIAL MANAGEMENT STUDY MATERIAL:- FINANCIAL MANAGEMENT VERY SHORT QUESTIONS ( 1 MARK) 1 Define Financial Management. Ans financial management is that specialized activity which is responsible for obtaining and affectively

More information

12. FINANCIAL MANAGEMENT

12. FINANCIAL MANAGEMENT 12. FINANCIAL MANAGEMENT Financing the business The capital of a business consists of those funds used to start and run the business. Capital may be of two types: fixed and working. Fixed capital refers

More information

Learning Objectives: Quick answer key: Question # Multiple Choice True/False. 14.1 Describe the important of accounting and financial information.

Learning Objectives: Quick answer key: Question # Multiple Choice True/False. 14.1 Describe the important of accounting and financial information. 0 Learning Objectives: 14.1 Describe the important of accounting and financial information. 14.2 Differentiate between managerial and financial accounting. 14.3 Identify the six steps of the accounting

More information

HOW TO IMPROVE THE WORKING CAPITAL OF A COMPANY

HOW TO IMPROVE THE WORKING CAPITAL OF A COMPANY Volume 3, Issue 5 (May, 2014) Online ISSN-2277-1166 Published by: Abhinav Publication Abhinav National Monthly Refereed Journal of Research in HOW TO IMPROVE THE WORKING CAPITAL OF A COMPANY Hemanshu Kapadia

More information

A STUDY OF FINANCIAL PERFORMANCE: A COMPARATIVE ANALYSIS OF SBI AND ICICI BANK

A STUDY OF FINANCIAL PERFORMANCE: A COMPARATIVE ANALYSIS OF SBI AND ICICI BANK A STUDY OF FINANCIAL PERFORMANCE: A COMPARATIVE ANALYSIS OF SBI AND ICICI BANK DR. ANURAG. B. SINGH*; MS. PRIYANKA TANDON** * Associate Professor LDC Institute of Technical Studies Soraon, Allahabad (Uttar

More information

Management of Working Capital

Management of Working Capital International Journal of Computer Science & Management Studies, Vol. 13, Issue 03, May 2013 Management of Working Capital Arti Rani Assistant Professor Kanya Mahavidhyalya, Kharkhoda, Sonepat, Haryana

More information

WORKING CAPITAL MANAGEMENT

WORKING CAPITAL MANAGEMENT CHAPTER 9 WORKING CAPITAL MANAGEMENT Working capital is the long term fund required to run the day to day operations of the business. The company starts with cash. It buys raw materials, employs staff

More information

THE BASICS OF FACTORING. A Guide to Understanding Accounts Receivable Financing

THE BASICS OF FACTORING. A Guide to Understanding Accounts Receivable Financing THE BASICS OF FACTORING A Guide to Understanding Accounts Receivable Financing The Basics of Factoring Table of Contents What is Factoring?.. 1 Benefits of Factoring 4 What Types of Businesses Utilize

More information

Negative Working Capital Can be a Positive Sign for The Success A Case Study of TVS Motor Company

Negative Working Capital Can be a Positive Sign for The Success A Case Study of TVS Motor Company International Journal of Management, MIT College of Management, Vol. 2, No. 2, August 2014, pp. 63 69 63 Negative Working Capital Can be a Positive Sign for The Success A Case Study of TVS Motor Company

More information

LESSON 13: FACTORING THEORETICAL FRAMEWORK

LESSON 13: FACTORING THEORETICAL FRAMEWORK LESSON 13: FACTORING THEORETICAL FRAMEWORK Lesson Objectives To understand the Concept of Factoring. Methodology of Factoring and Forfeiting. Types of factoring. Introduction Receivables constitute a significant

More information

FACTORING. Net Advantage of factoring = Rs.(2,15,753 2,00,000) = Rs.15,753 Decision: As there is net savings, factoring is preferable.

FACTORING. Net Advantage of factoring = Rs.(2,15,753 2,00,000) = Rs.15,753 Decision: As there is net savings, factoring is preferable. FACTORING Pen Pusher FACT1 A company is considering engaging a factor. The following information is available: a) The current average collection period for the company s debtor is 80 days. ½% of debtors

More information

It is concerned with decisions relating to current assets and current liabilities

It is concerned with decisions relating to current assets and current liabilities It is concerned with decisions relating to current assets and current liabilities Best Buy Co, NA s largest consumer electronics retailer, has performed extremely well over the past decade. Its stock sold

More information

A Case Study on Critical Analysis of Tcs

A Case Study on Critical Analysis of Tcs IOSR Journal of Business and Management (IOSR-JBM) e-issn: 2278-487X, p-issn: 2319-7668. Volume 16, Issue 2. Ver. I (Feb. 2014), PP 75-80 A Case Study on Critical Analysis of Tcs Dr Pratibha Jain, Prof.

More information

M. Com (1st Semester) Examination, 2013 Paper Code: AS-2368. * (Prepared by: Harish Khandelwal, Assistant Professor, Department of Commerce, GGV)

M. Com (1st Semester) Examination, 2013 Paper Code: AS-2368. * (Prepared by: Harish Khandelwal, Assistant Professor, Department of Commerce, GGV) Model Answer/suggested solution Business Finance M. Com (1st Semester) Examination, 2013 Paper Code: AS-2368 * (Prepared by: Harish Khandelwal, Assistant Professor, Department of Commerce, GGV) Note: These

More information

For our curriculum in Grade 12 we are going to use ratios to analyse the information available in the Income statement and the Balance sheet.

For our curriculum in Grade 12 we are going to use ratios to analyse the information available in the Income statement and the Balance sheet. SUBJECT: ACCOUNTING GRADE 12 CHAPTER: COMPANIES LESSON: ANALYSIS AND INTERPRETATION-RATIOS LESSON OVERVIEW (KNOWLEDGE AREAS) LESSON 1. Introduction 2. Analysing of financial statements and its purpose

More information

INSTITUTE OF ACTUARIES OF INDIA. CT2 Finance and Financial Reporting MAY 2009 EXAMINATION INDICATIVE SOLUTION

INSTITUTE OF ACTUARIES OF INDIA. CT2 Finance and Financial Reporting MAY 2009 EXAMINATION INDICATIVE SOLUTION INSTITUTE OF ACTUARIES OF INDIA CT2 Finance and Financial Reporting MAY 2009 EXAMINATION INDICATIVE SOLUTION General guidelines to markers: The solutions provided here are indicative ones. Please award

More information

Liquidity Management of Andhra Pradesh Power Generation Corporation Limited (APGENCO): A Study

Liquidity Management of Andhra Pradesh Power Generation Corporation Limited (APGENCO): A Study International Journal of Information & Computation Technology. ISSN 0974-2239 Volume 4, Number 11 (2014), pp. 1087-1096 International Research Publications House http://www. irphouse.com Liquidity Management

More information

BANKING QUESTION AND ANSWERS- PART-1

BANKING QUESTION AND ANSWERS- PART-1 BANKING QUESTION AND ANSWERS- PART-1 1. Which of the following statements is true? (1) Banks cannot accept demand and time deposits from public (2) Banks can accept only demand deposits from public (3)

More information

Receivables Management Paper-3 Part-II Financial Management Chapter-7 Unit-IV. By: CA Kapileshwar Bhalla

Receivables Management Paper-3 Part-II Financial Management Chapter-7 Unit-IV. By: CA Kapileshwar Bhalla Receivables Management Paper-3 Part-II Financial Management Chapter-7 Unit-IV By: CA Kapileshwar Bhalla Learning Objectives What is Receivables Management Review of Credit Policy What is Factoring Practical

More information

www.pvpglobal.com SECTOR: REALTY REPORTING DATE: 31 ST MAY, 2016 PVP Ventures Ltd

www.pvpglobal.com SECTOR: REALTY REPORTING DATE: 31 ST MAY, 2016 PVP Ventures Ltd 31 st May, 2016 TABLE 1 MARKET DATA (STANDALONE) (As on 31 st May, 2016) NSE Code PVP NSE Market Price ( ) 4.50 NSE Market Cap. ( Cr.) 118.85 Sector Realty Face Value ( ) 10.00 Equity ( Cr.) 245.05 52

More information

Working capital management of selected sugar industries in Tamil Nadu listed in BSE & NSE

Working capital management of selected sugar industries in Tamil Nadu listed in BSE & NSE 2015; 2(1): 192-196 IJMRD 2015; 2(1): 192-196 www.allsubjectjournal.com Received: 09-12-2014 Accepted: 25-12-2014 e-issn: 2349-4182 p-issn: 2349-5979 Impact factor: 3.762 M. Nagamani Associate Professor,

More information

WORKING CAPITAL MANAGEMENT AND PROFITABILITY: A CASE OF CEMTAC CEMENTS PVT LTD KASHMIR

WORKING CAPITAL MANAGEMENT AND PROFITABILITY: A CASE OF CEMTAC CEMENTS PVT LTD KASHMIR Inno Space (SJIF) Impact Factor : 4.618(Morocco) e-issn : 2347-9671, p- ISSN : 2349-0187 Vol - 3, Issue- 12, December 2015 ISI Impact Factor : 1.259 (Dubai, UAE) WORKING CAPITAL MANAGEMENT AND PROFITABILITY:

More information

Article Accounting Terminology

Article Accounting Terminology Article Accounting Terminology Contents Page 1. Accounting Period... 4 2. Accounts Payable (Sundry Creditors)... 4 3. Accounts Receivable (Sundry Debtors)... 4 4. Assets... 4 5. Benchmarks... 4 6. B.O.S.

More information

Discounting. Factoring & Forfeiting Summary

Discounting. Factoring & Forfeiting Summary Chapter 7 Discounting. Factoring & Forfeiting Summary The financial service sector is developing at rapid pace in India. This is just because of the emerging needs of the economy. Many innovative schemes

More information

CHAPTER 27 PRINCIPLES OF WORKING CAPITAL MANAGEMENT

CHAPTER 27 PRINCIPLES OF WORKING CAPITAL MANAGEMENT CHAPTER 27 PRINCIPLES OF WORKING CAPITAL MANAGEMENT Q.1 Explain the concept of working capital. Are gross and net concepts of working capital exclusive? Discuss. A.1 Working capital signifies money required

More information

performance of a company?

performance of a company? How to deal with questions on assessing the performance of a company? (Relevant to ATE Paper 7 Advanced Accounting) Dr. M H Ho This article provides guidance for candidates in dealing with examination

More information

CASH FLOW STATEMENT. MODULE - 6A Analysis of Financial Statements. Cash Flow Statement. Notes

CASH FLOW STATEMENT. MODULE - 6A Analysis of Financial Statements. Cash Flow Statement. Notes MODULE - 6A Cash Flow Statement 30 CASH FLOW STATEMENT In the previous lesson, you have learnt various types of analysis of financial statements and its tools such as comparative statements, common size

More information

IJMT Volume 2, Issue 4 ISSN: 2249-1058

IJMT Volume 2, Issue 4 ISSN: 2249-1058 AN ASSESSMENT - ASSET AND LIABILITY MANAGEMENT OF SCHEDULED COMMERCIAL BANKS IN INDIA Dr.N.Kavitha* EXECUTIVE SUMMARY: This paper examines management of asset-liability in banking sector. The main objective

More information

IJMIE Volume 2, Issue 6 ISSN: 2249-0558

IJMIE Volume 2, Issue 6 ISSN: 2249-0558 A Study on Liquidity, Profitability and Working Capital Management of Co- Operative Dudh Sangh Prof. R.G.Sathe* Abstract: Working capital management involves the management and control of the gross current

More information

A STUDY ON ASSET MANAGEMENT OF SELECTED AUTOMOBILE COMPANIES IN INDIA

A STUDY ON ASSET MANAGEMENT OF SELECTED AUTOMOBILE COMPANIES IN INDIA 51 A STUDY ON ASSET MANAGEMENT OF SELECTED AUTOMOBILE COMPANIES IN INDIA ABSTRACT DR.M. DHANABHAKYAM*; S.KAVITHA** *Assistant Professor, Department of Commerce, Bharathiar University, Coimbatore - 46.

More information

ICAP GROUP S.A. FINANCIAL RATIOS EXPLANATION

ICAP GROUP S.A. FINANCIAL RATIOS EXPLANATION ICAP GROUP S.A. FINANCIAL RATIOS EXPLANATION OCTOBER 2006 Table of Contents 1. INTRODUCTION... 3 2. FINANCIAL RATIOS FOR COMPANIES (INDUSTRY - COMMERCE - SERVICES) 4 2.1 Profitability Ratios...4 2.2 Viability

More information

Factoring: An Alternate Payment Method in International Trade

Factoring: An Alternate Payment Method in International Trade Factoring: An Alternate Payment Method in International Trade Surendar Vaddepalli Research Scholar, Dept. of Business Management, Osmania University, Hyderabad, vaddepalli.surendar@gmail.com Abstract Factoring

More information

SME: Finance -Challenges & Opportunities- Factoring Services- A non-conventional option

SME: Finance -Challenges & Opportunities- Factoring Services- A non-conventional option IFCI Factors Limited SME: Finance -Challenges & Opportunities- Factoring Services- A non-conventional option 1 India s SME Scenario Indian SMEs account for almost 45 percent of industrial output and 40

More information

Model Answer. M.Com IV Semester. Financial market and financial services. Paper code- AS 2384

Model Answer. M.Com IV Semester. Financial market and financial services. Paper code- AS 2384 Model Answer M.Com IV Semester Financial market and financial services Paper code- AS 2384 1. (I) Money Market is a market for short term loans or financial assets. As the name implies it does not deal

More information

Accounting for Branches Including Foreign Branch Accounts

Accounting for Branches Including Foreign Branch Accounts 9 Accounting for Branches Including Foreign Branch Accounts BASIC CONCEPTS Types of branches Dependent branches Independent branches Based on accounting point of view, branches may be classified as follows:

More information

THE CONCEPTUAL FRAMEWORK OF FACTORING ON SMALL AND MEDIUM ENTERPRISES

THE CONCEPTUAL FRAMEWORK OF FACTORING ON SMALL AND MEDIUM ENTERPRISES THE CONCEPTUAL FRAMEWORK OF FACTORING ON SMALL AND MEDIUM ENTERPRISES Minaxi Rani Assistant Professor (Extn.), Department of Commerce, Govt. College for women P.G. College, Hisar, Haryana, (India) ABSTRACT

More information

So You Want to Borrow Money to Start a Business?

So You Want to Borrow Money to Start a Business? So You Want to Borrow Money to Start a Business? M any small business owners cannot understand why a lending institution would refuse to lend them money. Others have no trouble getting money, but they

More information

CA CPT SAMPLE PAPER FUNDAMENTAL ACCOUNTING (60MARKS)

CA CPT SAMPLE PAPER FUNDAMENTAL ACCOUNTING (60MARKS) CA CPT SAMPLE PAPER FUNDAMENTAL ACCOUNTING (60MARKS) 1. Which of the following provide frame work and accounting policies so that the financial statements of different enterprises become comparable? (a)

More information

Total 100 All learning outcomes must be evidenced; a 10% aggregate variance is allowed.

Total 100 All learning outcomes must be evidenced; a 10% aggregate variance is allowed. Prescription: 603 Business Finance Elective prescription Level 6 Credit 20 Version 2 Aim Prerequisites Recommended prior knowledge Students will apply financial management knowledge and skills to small

More information

BACKGROUND KNOWLEDGE for Teachers and Students

BACKGROUND KNOWLEDGE for Teachers and Students Pathway: Business, Marketing, and Computer Education Lesson: BMM C6 4: Financial Statements and Reports Common Core State Standards for Mathematics: N.Q.2 Domain: Quantities Cluster: Reason quantitatively

More information

Accounting Basics. Prepared for First Year MBA

Accounting Basics. Prepared for First Year MBA Accounting Basics Prepared for First Year MBA Overview S No Particulars 01 Introduction to Accounting 02 Accounting Equation 03 Types of Transactions 04 Purchase and Sales 05 Types of Accounts 06 Golden

More information

Incisive Business Guide to Factoring

Incisive Business Guide to Factoring Incisive Guide to Factoring Factoring Guide Summary This guide from Incisive outlines the features and benefits for your business from using factoring and invoice discounting services. Factoring is commonly

More information

1. Planning - Establishing organizational goals and deciding how to accomplish them

1. Planning - Establishing organizational goals and deciding how to accomplish them 1 : Understanding the Management Process Basic Management Functions 1. Planning - Establishing organizational goals and deciding how to accomplish them SWOT analysis - The identification and evaluation

More information

Financial Management

Financial Management Different forms business organization Financial Management Sole proprietorship Partnership Cooperative society Company Private limited Vs Public limited company Private co min- two and max fifty, Pub Ltd

More information

Analysis of Solvency of Selected FMCG Companies in India

Analysis of Solvency of Selected FMCG Companies in India Global Journal of Management and Business Studies. ISSN 2248-9878 Volume 3, Number 4 (2013), pp. 401-406 Research India Publications http://www.ripublication.com/gjmbs.htm Analysis of Solvency of Selected

More information

Financial Analysis of Factoring Companies in India: A Study of SBI Global Factors and Canbank Factors

Financial Analysis of Factoring Companies in India: A Study of SBI Global Factors and Canbank Factors Financi Anysis of Factoring Companies in India: A Study of Factors and Factors Hardarshan Kaur 1, Navkiranjit Kaur Dhiw 2 1 Research Fellow, Dept. of Commerce, Punjabi University Patia, 147001, Punjab,

More information

Financial Performance of ICICI Bank and SBI bank: A Comparative Analysis

Financial Performance of ICICI Bank and SBI bank: A Comparative Analysis Financial Performance of ICICI Bank and SBI bank: A Comparative Analysis Pooja Sharma 1, Hemlata 2 1,2 Assistant Professor, Dept of MBA, E-max Group of Institutions Ambala Abstract The banking sector mirrors

More information

WORKING CAPITAL MANAGEMENT OF MAKSON HEALTHCARE PVT LTD: A TRADE -OFF BETWEEN LIQUIDITY AND PROFITABILITY, AN EMPIRICAL STUDY

WORKING CAPITAL MANAGEMENT OF MAKSON HEALTHCARE PVT LTD: A TRADE -OFF BETWEEN LIQUIDITY AND PROFITABILITY, AN EMPIRICAL STUDY WORKING CAPITAL MANAGEMENT OF MAKSON HEALTHCARE PVT LTD: A TRADE -OFF BETWEEN LIQUIDITY AND PROFITABILITY, AN EMPIRICAL STUDY Ms. Ankita Rajdev, Assistant Professor, Faculty of Management, JSSGIW, Barkatullah

More information

7 Management of Working Capital

7 Management of Working Capital 7 Management of Working Capital BASIC CONCEPTS AND FORMULAE 1. Working Capital Management Working Capital Management involves managing the balance between firm s shortterm assets and its short-term liabilities.

More information

The Nature, Elements and Importance of Working Capital

The Nature, Elements and Importance of Working Capital C. WORKING CAPITAL MANAGEMENT 1. The nature, elements and importance of working capital 2. Management of inventories, accounts receivable, accounts payable and cash 3. Determining working capital needs

More information

An Analysis Of Working Capital Management Of Nahar Spinning Mills Ltd.

An Analysis Of Working Capital Management Of Nahar Spinning Mills Ltd. An Analysis Of Working Capital Management Of Nahar Spinning Mills Ltd. Mamta Patidar Patidar_mamta@yahoo.co.in Department of Commerce Chitansh A.D.P.G. College E-7 Arera Colony Bhopal ABSTRACT : This study

More information

5.3.2015 г. OC = AAI + ACP

5.3.2015 г. OC = AAI + ACP D. Dimov Working capital (or short-term financial) management is the management of current assets and current liabilities: Current assets include inventory, accounts receivable, marketable securities,

More information

FINANCING OF WORKING CAPITAL IN SELECT CEMENT COMPANIES OF ANDHRA PRADESH

FINANCING OF WORKING CAPITAL IN SELECT CEMENT COMPANIES OF ANDHRA PRADESH IMPACT: International Journal of Research in Business Management (IMPACT: IJRBM) ISSN(E): 2321-886X; ISSN(P): 2347-4572 Vol. 3, Issue 7, Jul 2015, 43-50 Impact Journals FINANCING OF WORKING CAPITAL IN

More information

Construction Economics & Finance. Module 6. Lecture-1

Construction Economics & Finance. Module 6. Lecture-1 Construction Economics & Finance Module 6 Lecture-1 Financial management: Financial management involves planning, allocation and control of financial resources of a company. Financial management is essential

More information

RATIO ANALYSIS FORMULAS + THEORIES

RATIO ANALYSIS FORMULAS + THEORIES A) Cash Position Ratio : - 1) Absolute Cash Ratio = Cash Reservoir Current Liabilities 2) Cash Position to Total asset Ratio = Cash Reservoir * 100 (Measure liquid layer of assets) Total Assets 3) Interval

More information

Financial Statements and Ratios: Notes

Financial Statements and Ratios: Notes Financial Statements and Ratios: Notes 1. Uses of the income statement for evaluation Investors use the income statement to help judge their return on investment and creditors (lenders) use it to help

More information

18 BUSINESS ACCOUNTING STANDARD FINANCIAL ASSETS AND FINANCIAL LIABILITIES I. GENERAL PROVISIONS

18 BUSINESS ACCOUNTING STANDARD FINANCIAL ASSETS AND FINANCIAL LIABILITIES I. GENERAL PROVISIONS APPROVED by Resolution No. 11 of 27 October 2004 of the Standards Board of the Public Establishment the Institute of Accounting of the Republic of Lithuania 18 BUSINESS ACCOUNTING STANDARD FINANCIAL ASSETS

More information

Appraisal A written analysis prepared by a qualified appraiser and estimating the value of a property

Appraisal A written analysis prepared by a qualified appraiser and estimating the value of a property REAL ESTATE BASICS Affordability Analysis An analysis of a buyer s ability to afford the purchase of a home, reviews income, liabilities, and available funds, and considers the type of mortgage a buyer

More information

International Trade Financing and Risk Management Manual

International Trade Financing and Risk Management Manual International Trade Financing and Risk Management Manual Website: www.aepcindia.in For query please contact: Ms. Vanni Mehta, ecocell@aepcindia.com Incorporated in1978, (AEPC) is the official body of apparel

More information

Cambridge International Examinations Cambridge International General Certificate of Secondary Education

Cambridge International Examinations Cambridge International General Certificate of Secondary Education Cambridge International Examinations Cambridge International General Certificate of Secondary Education ACCOUNTING 0452/02 Paper 2 For Examination from 2014 SPECIMEN MARK SCHEME 1 hour 45 minutes MAXIMUM

More information

Cost of Credit. How much is customer credit REALLY costing your business? Tips & advice for effective credit management

Cost of Credit. How much is customer credit REALLY costing your business? Tips & advice for effective credit management Cost of Credit How much is customer credit REALLY costing your business? Tips & advice for effective credit management Group UK The best advice any business can follow to ensure they do not experience

More information

Financial Performance Of General Insurance Business In India A Study Of Select Indicators

Financial Performance Of General Insurance Business In India A Study Of Select Indicators Finance Financial Performance Of General Insurance Business In India A Study Of Select Indicators Keywords capital adequacy, assets quality, premium, claim and equities Ms.T.Rani Assistant Professor in

More information

How to Assess Your Financial Planning and Loan Proposals By BizMove Management Training Institute

How to Assess Your Financial Planning and Loan Proposals By BizMove Management Training Institute How to Assess Your Financial Planning and Loan Proposals By BizMove Management Training Institute Other free books by BizMove that may interest you: Free starting a business books Free management skills

More information

Management Of Working Capital

Management Of Working Capital Management Of Working Ms. Sonali Shrotri and Ms.Smriti Pathak Faculties JSPM Introduction India is the most preferred destination for automobile industry today. Indian automotive industry is one of the

More information

Actuarial Society of India

Actuarial Society of India Actuarial Society of India EXAMINATIONS November 2004 SUBJECT - 108: Finance and Financial Reporting Indicative Solution S-108 Page 1 of 7 1 D 2 C 3 B 4 D 5 D 6 A 7 B 8 C 9 B 10 D 11 Trade credit is short-term

More information

Working Capital Management of Small Scale Industries in Rajasthan

Working Capital Management of Small Scale Industries in Rajasthan Working Capital Management of Small Scale Industries in Rajasthan Bashar Matarneh Department of Business Administration, Delmon University Exhibition Avenue Manama, Kingdom of Bahrain, P.O. Box 2469 Tell:

More information

EVALUATION OF FINANCIAL PERFORMANCE CONCEPTUAL IMPLICATIONS OF WORKING CAPITAL MANAGEMENT (WITH SPECIAL REFERENCE TO IT INDUSTRY)

EVALUATION OF FINANCIAL PERFORMANCE CONCEPTUAL IMPLICATIONS OF WORKING CAPITAL MANAGEMENT (WITH SPECIAL REFERENCE TO IT INDUSTRY) EPRA International Journal of Economic and Business Review Inno Space (SJIF) Impact Factor : 4.618(Morocco) e-issn : 2347-9671, p- ISSN : 2349-0187 Vol - 3, Issue- 5, May 2015 ISI Impact Factor : 1.259

More information

Chapter 07 - Accounts and Notes Receivable. Chapter Outline

Chapter 07 - Accounts and Notes Receivable. Chapter Outline Chapter 07 - Accounts and Receivable I. Accounts Receivable A receivable is an amount due from another party. Accounts Receivable are amounts due from customers for credit sales. A. Recognizing Accounts

More information

SIGNIFICANCE OF WORKING CAPITAL TURNOVER RATIO: A CASE STUDY OF BHEL AND CROMPTON GREAVES

SIGNIFICANCE OF WORKING CAPITAL TURNOVER RATIO: A CASE STUDY OF BHEL AND CROMPTON GREAVES INTERNATIONAL JOURNAL OF MANAGEMENT (IJM) International Journal of Management (IJM), ISSN 0976 650(Print), ISSN 0976-6510(Online), ISSN 0976-650 (Print) ISSN 0976-6510 (Online) Volume 6, Issue 3, March

More information

Accounts Payable are the total amounts your business owes its suppliers for goods and services purchased.

Accounts Payable are the total amounts your business owes its suppliers for goods and services purchased. Accounts Payable are the total amounts your business owes its suppliers for goods and services purchased. Accounts Receivable are the total amounts customers owe your business for goods or services sold

More information

Guide to Financial Ratios Analysis A Step by Step Guide to Balance Sheet and Profit and Loss Statement Analysis

Guide to Financial Ratios Analysis A Step by Step Guide to Balance Sheet and Profit and Loss Statement Analysis Guide to Financial Ratios Analysis A Step by Step Guide to Balance Sheet and Profit and Loss Statement Analysis By BizMove Management Training Institute Other free books by BizMove that may interest you:

More information

Ratio Analysis. A) Liquidity Ratio : - 1) Current ratio = Current asset Current Liability

Ratio Analysis. A) Liquidity Ratio : - 1) Current ratio = Current asset Current Liability A) Liquidity Ratio : - Ratio Analysis 1) Current ratio = Current asset Current Liability 2) Quick ratio or Acid Test ratio = Quick Asset Quick liability Quick Asset = Current Asset Stock Quick Liability

More information

Xynergy Commercial Capital LLC

Xynergy Commercial Capital LLC Xynergy Commercial Capital LLC How Can Work For You The Problem Short of cash and must pay suppliers, lease, bills and salaries? No need for stress, get your payments in advance for your invoices and pay

More information

Working Capital Management Nature & Scope

Working Capital Management Nature & Scope Working Capital Management Nature & Scope Introduction & Definitions Components of Working Capital Significance of Working Capital Operating Cycle Types of Working Capital Net Vs Gross Working Capital

More information

C&I LOAN EVALUATION UNDERWRITING GUIDELINES. A Whitepaper

C&I LOAN EVALUATION UNDERWRITING GUIDELINES. A Whitepaper C&I LOAN EVALUATION & UNDERWRITING A Whitepaper C&I Lending Commercial and Industrial, or C&I Lending, has long been a cornerstone product for many successful banking institutions. Also known as working

More information

Understanding Financial Statements. For Your Business

Understanding Financial Statements. For Your Business Understanding Financial Statements For Your Business Disclaimer The information provided is for informational purposes only, does not constitute legal advice or create an attorney-client relationship,

More information

Working Capital Management and Firms Performance: An Analysis of Sri Lankan Manufacturing Companies

Working Capital Management and Firms Performance: An Analysis of Sri Lankan Manufacturing Companies Working Capital Management and Firms Performance: An Analysis of Sri Lankan Manufacturing Companies Lingesiya Y. Department of Financial Management, University of Jaffna, Sri Lanka lingesiya@yahoo.com

More information

Concept Paper Factoring

Concept Paper Factoring Concept Paper Factoring Co-create. Innovate. Win. 2 1.0 INTRODUCTION 3 1.1. Trade transaction 3 1.2. Discounting Vs. Factoring 4 2. 0 FACTORING 4 2.1. Parties in Factoring 4 2.2. The Factoring Process

More information

BUSINESS BOOKKEEPING & ACCOUNTS Designed to produce bookkeeping and accounts personnel trained in the

BUSINESS BOOKKEEPING & ACCOUNTS Designed to produce bookkeeping and accounts personnel trained in the INTERNATIONAL DIPLOMA PROGRAM ON BUSINESS BOOKKEEPING & ACCOUNTS Designed to produce bookkeeping and accounts personnel trained in the MODERN PRACTICAL METHODS OF ACCOUNTING Trained and competent bookkeeping

More information

MARK SCHEME for the October/November 2014 series 0452 ACCOUNTING. 0452/23 Paper 2, maximum raw mark 120

MARK SCHEME for the October/November 2014 series 0452 ACCOUNTING. 0452/23 Paper 2, maximum raw mark 120 CAMBRIDGE INTERNATIONAL EXAMINATIONS Cambridge International General Certificate of Secondary Education MARK SCHEME for the October/November series 0452 ACCOUNTING 0452/23 Paper 2, maximum raw mark 120

More information

for Analysing Listed Private Equity Companies

for Analysing Listed Private Equity Companies 8 Steps for Analysing Listed Private Equity Companies Important Notice This document is for information only and does not constitute a recommendation or solicitation to subscribe or purchase any products.

More information

Factoring Services WHAT IS FACTORING? MECHANICS OF FACTORING

Factoring Services WHAT IS FACTORING? MECHANICS OF FACTORING Factoring Services S Balasubramanian, Vice President (Finance) & Company Secretary, Canbank Factors Ltd., Bangalore. Realisation of outstanding dues is increasingly becoming a complicated and tedious exercise.

More information

Working Capital Concept & Animation

Working Capital Concept & Animation Working Capital Concept & Animation Meaning A measure of both a company's efficiency and its short-term financial health. The working capital is calculated as: Working Capital = Current Assets Current

More information

Change In the Working Capital Requirements: In the Textile Industry

Change In the Working Capital Requirements: In the Textile Industry Change In the Working Capital Requirements: In the Textile Industry RAMANJOT KAUR 1, Research Scholar School of management studies Punjabi University, Patiala Dr. KUSUM GUPTA 2 Assistant Professor D.A.V.

More information

Return on Equity has three ratio components. The three ratios that make up Return on Equity are:

Return on Equity has three ratio components. The three ratios that make up Return on Equity are: Evaluating Financial Performance Chapter 1 Return on Equity Why Use Ratios? It has been said that you must measure what you expect to manage and accomplish. Without measurement, you have no reference to

More information

Understanding A Firm s Financial Statements

Understanding A Firm s Financial Statements CHAPTER OUTLINE Spotlight: J&S Construction Company (http://www.jsconstruction.com) 1 The Lemonade Kids Financial statement (accounting statements) reports of a firm s financial performance and resources,

More information