Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
Name
Qualifications
Sarbesh Mishra.
Experience
: 1. B.Com.(Hons) 2. Post-graduate Commerce. 3. M.Phil (Commerce) 4. Ph.D. (Commerce) submitted. : Joined University of Delhi as Lecturer in Commerce in 2001 and continued till 2005 and then joined Army Institute as Senior Faculty, Finance Area prior to current appointment at NICMAR.
by
Qs:- If I have no intention of becoming a financial manger, why do I need to, understand financial applications / Analyse of Financial statements?
The successful manager will need to be much more of a team player that has the knowledge and ability to move not just vertically within an organization but horizontally as well.
Contd.
The mastery of basic financial management skills is key ingredient that will be required in the work place of yours not in too distant future.
Finance is the study of money management, the acquiring of funds (cash) and the directing of these funds to meet particular objectives. Good financial management helps businesses to maximize returns while simultaneously minimizing risks.
Goal
EQUITY
DEBT
ASSETS
ASSETS
SALES
ASSETS
SALES
EARNINGS
ASSETS
SALES
EARNINGS
DIVIDEND
ASSETS
SALES
EARNINGS
* Payout
DIVIDEND
Rate???
ASSETS
SALES
EARNINGS
* Payout
DIVIDEND
Finance Measures
Cost
Revenue
Profit
ROI EVA
WHAT IS THE FINANCIAL POSITION OF THE FIRM AT A GIVEN POINT OF TIME ? HOW HAS THE FIRM PERFORMED FINANCIALLY OVER A GIVEN PERIOD OF TIME ?
LEGAL FRAMEWORK
WITHIN COMPANIES ACT, 1956 :
Compulsory for Cos. to keep proper books of accounts & to prepare annual statements in the prescribed form & time. (Secs.209-223)
BALANCE SHEET
Sec 211 : Form to be as prescribed in Part I of Schedule VI - Horizontal form - Vertical form
ASSETS
Fixed Assets Investments Current Assets, Loans and Advances Misc. Expenditures and Losses
as at 30th Sep., 2003 736.95 14,464.92 15,201.87 1,321.86 3,063.95 4,385.81 7,484.91 863.30 8,348.21
4. Current Liabilities & Provisions (i) Current Liabilities 9,118.41 (ii) Provisions 1,947.67 11,066.08 TOTAL 31,743.54
27,935.89
Application of Funds
1.
Fixed Assets (i) Gross Block Less : Depreciation Net Block (ii) Capital Work in Progress Sub-total a b
(Figs. in Rs./Crores)
as at 30th Sep., 2003 8,647.11 5,341.47 3,305.64 16.52 3,322.16 8,375.57 5,686.30 5,803.17 283.25 4,465.44 16,238.16 27,935.89
2. Investments
3. Current Assets, Loans & Advances (i) Inventories 6,823.34 (ii) Sundry Debtors 8,880.50 (iii) Cash & Bank Balances 754.80 (iv) Loans And Advances 3,832.34 Sub-total c 20,290.98
TOTAL a+b+c = 31,743.54
Preference Capital
Reserves
& Surplus
Capital Reserve
- share premium a/c - assets revaluation res
Note :
Share Capital + Reserves & Surplus = Owners Equity
OTHER LIABILITIES
Secured Loans :
(i.e. borrowings against specific securities)
1) Debentures, 2) Loans from Financial Institutions and 3) Loans from Commercial Banks.
Unsecured Loans: 1) Fixed Deposits, 2) Loans & Advances from (i.e. borrowings without Promoters, 3) Inter-corporate Borrowings and 4) any specific securities) Short-term Loans & Advances from Banks. Current Liabilities & Provisions : 1) Bills Payable, 2) Payments (obligations maturing Received in Advance, 3) Accrued Expenses, 4) within the next 1 year) Unclaimed Dividends & 5) Provisions for Taxes, Insurance Premia, Pensions, Dividends, etc.
ASSETS
Fixed Assets :
Used over relatively long periods for the business Ordinarily not meant for resale
e.g. Land, Buildings, Plant & Machinery, Patents & Copyrights, Goodwill, etc.
Investments :
Current Assets, Loans: Resources convertible into cash during and Advances operating cycle of firm
e.g. Cash in hand or bank, Sundry Debtors (Bills Receivable) Inventories, Loans & Advances and Prepaid Expenses.
INDIAN COMPANIES ACT. However, as per Part II of Schedule VI, any format must disclose the following :
Net Turnover or Sales Cost of Goods Sold Gross Profit Operating Expenses Operating Profit Non-operating Surplus/Deficit Profit Before Interest and Tax (PBIT) Interest Profit Before Tax (PBT) Tax Profit After Tax (PAT)
INCOME
Sales Other Income
EXPENDITURE
1. 2. 3. 4. 5.
For the year ended 30th Sep., 30th Sep., 2004 2003
Cost of Goods for Resale 6,702.12 Manufacturing Expenses 15,279.08 Employee Cost 4,059.15 Admn. & Selling Exp. 2,204.27 Depreciation 593.71 Total Expenditure 28,838.33 PBIT Interest Profit before Tax Tax Profit after tax 1,719.74 743.91 975.83 375.49 332.88
8,150.64 10,623.13 2,756.30 2,231.06 562.21 24,323.34 1,084.43 530.52 553.91 (-)995.92 1,549.83
Operating Expenses :
- General Administrative Expenses - Selling & Distribution Expenses - Depreciation
Operative Profit : Gross Profit - Operating Expenses Non-operating Surplus/Loss : Gains/Losses Sources Other
Than Normal Business of the Co. e.g. income/loss from
investments, disposal of assets, etc.
PBT : = PBIT - I Tax : Income Tax payable on the taxable profit of the year. PAT : = PBT - T Dividends : Amount earmarked for distribution to shareholders. Retained Earnings : = PAT - Dividends
TO ASSESS THE FINANCIAL HEALTH OF ANY COMPANY, ONE REQUIRES A GOOD UNDERSTANDING OF THE FINANCIAL STATEMENTS OF THE COMPANY