MBA FINANCE

Answers of Accounting Objective Questions

2011-04-30T06:23:00.000-07:00

1. (c)

2. (b)

3. (c)

4. (a)

5. (a)

6. (b)

7. (c)

8. (a)

9. (c)

10. (a)

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Master of Business Administration - Introduction

2009-10-20T07:35:00.000-07:00

Master of business administration is the best degree in the field of management and finance . Large number of students get this degree from all over the world . The MBA starts first in USA after new revolution in the field of management and companies understood the need of scientific management .
Master of business administration degree in India is also famous . More than 1600 business schools have established in 2009 . Indian institute of management is the one of largest and oldest institute which is providing the education to MBA scholars . Now admission in IIM for doing MBA is fully CAT ( Common Entrance Test ) basis and anybody who qualify it can do MBA from IIM .

Why do you want to pursue a MBA?"

2009-08-18T04:58:00.000-07:00

Large scale of students get admission in MBA and it has become craze to do MBA . At this stage , it is logical question Why do you want to pursue MBA ?

From Some time , I have done deep analysis of this question and today , I am ready to answer of this question . Pursue means " set your target " MBA is professional degree to do managerial work in any business organisation . After 1990 , It become vital degree for getting high standard job . So , MBA is best for any student steam . These days , if you are engineer , your are doctor , you are accountant or finance consultant and after this you have MBA degree holder , then your value must increase .

So, young people are giving preference to MBA degree but it is very low trend to open self independent profession after MBA . I think , every student sets their mind to do job and only to do job after MBA . That is wrong . Now MBA finance will help you to open your self independent professional office of finance consultant like CA . There are also other reasons for pursuing MBA which can be mention with following way :-

Enhance management knowledge
Increase communication skill
Increase the skill for trouble shooting every business problem
Getting the skill to utilize the knowledge in practical field

High need of MBA finance in Rural management

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Govt. of India has announced 39000 crores expenses on Rural development under Village employment guarantee scheme . It means large or high number of MBA finance are needed in future for rural development . MBA finance can take challenge to manage rural area by effective utilization of financial resources of Govt. of India.

How can do MBA finance

MBA finance can be done from any recognised university of India by giving the entrance test of CAT or MAT . After entrance test , candidate have to clear also group discussion and interview .

Why take admission of MBA finance in session 2009

Because in next 3 to 4 years , In India , the demand of MBA finance will increase in different govt. projects like , BHARAT NIRMAN , INDRA VIKAS , GRAMIN SARAK YOJNA etc. More over its annual salary package is more than Rs. 8 Lakh .

Job profile of MBA finance

MBA finance's main duty is to help in rural development So , that Govt. of India can increase per capita income of rural peoples . All fund is given by Govt. and international financial institutions like world bank and IMF . MBA finance also have to make planning of resource distribution.
If you have the degree of MBA finance , you can appoint in Co-operative banks , NGOs , Govt. development agencies , insurance companies in rural areas .

Comparison between chartered accountant and MBA finance

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CA is profession for auditing the company accounts . MBA finance is the profession for getting and utilization of company's fund by effective way.
For becoming Chartered accountant , you need to clear the final exam of ICAI . For becoming MBA finance , you need to clear the final exam. of MBA in the specialisation of Finance .
Chartered Accountant operate their profession independently. But MBA finance gets professional opportunity in companies and banks .
For becoming , Chartered Accountant , you have to study advance accounting and auditing and also to understand different law's provision . But for becoming MBA finance , you have to study advance management techniques for handling the finance of company.

Loss making public sector undertakings-due to poor financial management?

2009-07-13T03:59:00.000-07:00

Above question is asked in Yahoo answer and for MBA finance can give its answer . Actually PSU are not suffering loss due to poor financial management but their management is not done by proper and qualified officers . Almost all high administrator becomes with political approach and with corruption and they do not manage properly and capture in losses .

Total expense to complete 2 yrs of MBA in finance

2009-07-08T09:05:00.000-07:00

Approximate Rs. 100000 to Rs. 300000 is the total expense to complete 2yrs of MBA in finance . But this expenses may reduce or increase by admission in specific college . Quality of college of MBA will increase your expenses but approximate total expenses is above for doing MBA in finance in India .

Controlling Techniques

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Control of business is done with different controlling techniques which can be useful for reducing the variance between actual performance and standard performance . There are following main techniques or method or controlling which can be classified into two head category .

A - Traditional Techniques

1. Observational techniques

Observational technique is traditional technique of controlling . Under this technique , manager appoint authorities who observes other employees . They also note the actual performance of employee and they report it to manager after manager decides whose performance is weak and how to improve it .

2. Statistical report

This is also technique of controlling . Under this technique company analysis the statistical data in the form of mean, median and mode also analysis the standard variation and correlation and find what are shortcoming in planning and try to control it .

3. Break even point analysis

This is the technique of controlling . Company sells their product up to the break even point because it is point where total cost equals to total sale value and company can get any loss . But sale below from this point means that total cost is more than total sale value and company will suffer losses . So , break even point is so important from controlling point of view . It is the reason that wise men have made it controlling technique and used in management .

4. Budgetary control :-

Budgetary control is that technique of controlling in which company managers make budget like production budget , sale budget , finance budget and research and development budget after this actual performance is measure with budget amount .

Modern techniques of Controlling

1. MIS

MIS means management information system . In this system , raw data is collected from direct or indirect sources and then after classification of data , different analysis is rendered by company managers and after this company managers provide information about favourable and unfavourable position of company's different plannings .

MIS is very important technique and it is used very high level after invention of computer and Internet .

2. Management audit system

This is very simple type of auditing which is done by chartered accountant and company manager can used it as technique of controlling management . Managers establish their relations with CA of company and after discuss they make system of internal management audit in which company CA and his staff audit at spot and check the efficiency and correctness of plan and its implementation on staff of company .

3. Return on investment

Return on investment meas capacity of earning profit on total investment which is invested by company . It is very scientific technique of controlling . Even Google is using also this technique for his google AdWords project control .

4. Responsibility accounting

Responsibility accounting is that controlling technique in which different responsibility centres are created by company managers and its name are cost center , profit center and investment center . After this every center is responsible for their cost . Main aim of making these centers is to increase profit , increase return on investment and decrease cost of production . Different budgetary cost are set in first and the each centre's actual cost is counted and recorded , if the actual cost of each center is less than budgeted cost , then it means that center has perform his duty better .

Difference between formal and informal organisation

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1. Formal organisation is made under proper assigning of duties and delegation of authorities . Every employee under formal organisation is responsible for their works . But in informal organisation , no such delegation of authorities and assigning any duties but it made automatic and increase organisation culture .
2. Formal organisation is made under proper appointment of employee under recruitment , selection and training but informal organisation is made under good relation , talking in factory canteen , discussion free time in office .
3. Formal organisation is very necessary for business without this no co-ordination . But there is no necessity of any informal organisation .
4. Formal organisation sometime become burdens on head in the time of work overload but informal organisation reduces work overload burden .

Control definition Simplified

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Control is that function of business management which is used for effective utilization of planning . After making planning and implementing it , manager observes the employees by different controlling techniques whether work is doing according to planning or not , that observation is called control . Without control of work , indiscipline , fraud , corruption and slowing work problems can arise which can reduce the efficiency of employee . Control enables employees more responsible for performing their duties . Control powers to the discipline and work culture . It is different from intervention and interfere in work but with controlling , manager tries to reduce wastage in work .

Steps of making Orgainsation

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There are following steps in organisation process :-

Identification of Work

First of all identify your work . What are main work and what have to be done because these problems are the objectives for making organisation and it should set first .

2. Division of Work

Division of Work is the second step for making organisation . With division of work , every employee and worker can easily know what work is for him . With this he can do better work also.

3. Assigning of Work duties

After division of work , worker are given different work duties . This is very helpful for determination of the responsibility of employees .

4. Delegation of Powers

After assigning of duties , employer delegates his powers , so that employee can do his work properly .

5. Coordination and co-operation

After delegation of authorities , it is very necessary to enhance the coordination and cooperation among employees .

6. Feed back

Feed back receives from employee . They can explain formal or informally that they are satisfied from division of work or not .

Structure of Organisation

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Organisation in simple words is the group of workers and employees who are experts in their field and they do their work for achieving the objectives of company . But without proper delegation of authority , they can not do their work . For delegation of work and division of work , it is very necessary for managers to make good structure of organisation . Structure can be made with different methods which can be explained following way :-

1. Line Organisation

Line organisation is that structure in which all the employees's authority is in line form . One top authority has power to direct following subordinate and whole organisation can easily divides in top level , middle level and lower level management .

2. Line and Staff Organisation

It is that structure whose shape in line form but every authority has some advisors who are the expert in their specific field and they guide authority for taking specific decision . It is the power of authority whether he apply the advice or not .

3. Functional Organisation

Function organisation is that structure in which there is not any line chain of Boss and subordinates but every employee who is expert in specific work become boss of his work and he is responsible only his work whole division of work is done on the basis of employees and labourers specialisation . There two big department one is planning department and other second is functional department . Now planning department appoints time and cost clerk , route clerk and functional department appoint speed boss , inspector and other functional boss for working in factory .

4. Committee Organisation

In this organisation , a committee is organised and in this committee , specialized personnel are included , they talk on specific problem and after this they provide special advice to administration for taking the action.

Simple Definition of Organisation

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Making of groups for doing the activities of business for achieving the objectives is called organisation . After making of groups , co-ordination is established and every employee becomes the responsible for his duties

Qualities of a good planning

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☼ Based on past data and its evaluations

☼ Flexible

☼ Telling the limitations of planning in made plan

☼ Updated according to time

☼ Plans after evaluation of alternative course of action

☼ Concentrate on work

☼ Including all components like objectives , policies , procedure , rules , method , programme , project and budget in planning

☼ Feed back of employees

☼ Apply of Time principle

☼ Short term plans should assist long term plans

☼ It should be simple

☼ It should be realistic

☼ It should be complete

☼ It should be helpful for achieving the objectives .

☼ It should be helpful increase the efficiency

Components of Planning

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1. Objectives

objectives are that target which have to achieve . These are the top point of company . Company's main objectives are to maximize profit and wealth . So , this is the one main component of planning . Every company first identifies different objectives for making plannings .

2. Policies

Policies are guidelines which is given by company and company's departmental managers for increase the efficiency of company employees and creating work ethics .

3. Procedure

Procedure are those steps which are taken for doing any task . Any task or work may be small or big but it should be completed with specific procedure .

4. Rules

Rules are strict principles which are needed to create discipline in office . Manager knows that if employees leave from rules , it may possible that indiscipline will spread in office . Suppose , if company rule is to open office at 9 a.m. but after requesting all employees, manager of company leaves this rule . After this one employee started at 10 am and other started to reach office at 11 am . This exemption of rule reduces the growth of work . So , rules are so needed in office .

5. Method

When company makes procedure and its different steps , after this company evaluates every steps , every step can be performed with different alternative ways and every alternative way is called method .

6. Programme

Programme is very short term planning which is needed to show something or for motivating or providing some announcements .

7. Project

Projects are mainly financial planning . Company can make different projects for investing money or getting fund from different sources .

8. Budgets

Budgets are also components of planning . In this component , company manager makes plans for estimation of all future expenses and incomes and this is very useful for checking the performance of every employee and it is used in responsibility accounting .

Types of Planning

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Planning can be classified under different head points . To know what are different types of planning is necessary for manager because after this can make good plan according to needed plans for specific purposes .

1. Long term and short term planning

Long term planning is related to all estimates for long term works of company . These plans are made for 5 to 10 years and in this plans company can decides to get fund or invest money in different projects . But short term plans are made for one years . In this plans , company manager decides to make schedule of routine work and manager makes different policies and rules under this plan.

2. Formal and informal planning

Formal planning is relating to written plans and subordinates are responsible to do work compulsory . In every countries' company's managers make plans , that plans are formal only . But some time company manager can also make informal plans without any written formility and these plans often made in free time and these plans are made on the informal talking of different employees with managers .

3. Financial and Non financial

If plannings are related to aquire or giving to other , then that plans are called financial plans and non financial plans are those plans in which , there is no fund needed to give or take by any body .

4. Standing and one time plans

Standing or regular plans are those which are continually made by manager in business management . After completing of these planning the process of same planning after some adjustment will again started but in one time plans , planning are made only one time for special purposes and after completing of the purpose , plans are no needed for any work .

Get MBA regular from Algol school of management & Technology

2009-06-17T16:42:00.000-07:00

ALGOL has started admission of regular MBA in June 2009 . This one of good northern India's business school who is providing the facility of well stocked library , six well equipped IT and management labs , campus transport and AC hostel for boys and girls . This is top rated corporate await to recruit their students . So , contact ALGOL school of management and technology for regular admission Link

Steps of planning process

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1st step - Identification of opportunity and problems

In this step , it is the duty of manager to identify the opportunity and problems . It means it will tell us why are we making plans . What problem will solve with planning .

2nd Step - Identification of Objectives

Manager should identify different objectives of company . After this he can make plans for achieving these objectives . Suppose , the company's objective is to earn profit . But for making planning to increase profit . Company will fix how much will company earn profit .

3rd step - Collection of Information

After making of different objectives of company , manager have to collect informational data relating to future plan . These are rough data , which will be helpful for completion the work of planning process .

4th step - Evaluate of collected information

This is very necessary step in which manager evaluates collected information in present situation . After this rough information is converted into company's valuable information for making plans .

5. Evaluate of Alternative course of Action

Planning tells us what to be done in future . After evaluate information , manager gets power to evaluate different alternatives of course of action . Because , one work can be done with different way . So , for making good planning , it is required to evaluate all the alternatives of course of action.

6. Select best alternative of course of action

After evaluating all alternative company selects best alternative to do work . Suppose Google Inc. has different alternatives to increase his sale of advertising products . But Google company's manager will evaluate all the alternatives and choose the best alternatives which is most useful for company under present condition .

7. Feed back

After selecting best alternative and applying the plans , company gets feed back from employees or customers , so that plans can be changed according to the situation and feed back report . We can take example of Google

When google launched any new product or make plans to launch any product . First of all google gets online feed back by writing what is your reaction or Do you like this and you have to answer in yes or no and your feed back is recorded in the account of Google company . Like this all company makes system for feed back .

Features of planning

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Feature of planning means all characteristics of planning which shows its symptoms . To know features of planning is also important for MBA scholar in the subject of business management . There are following features of planning :-

1. Intellectual process

For making planning , manager has to think with brain and after deep intellectual they can make good plan . So , it is the first feature of planning .

2. Continuous process

Planning is continuous process . If one circle of planning completes , then again same circle activate and this process is continually works in the life of business .

3. First Function of management

This is the first function of management . With this no other function can be performed . After making of planning all other function can be activated by manager .

4. Forward looking and thinking

Planning is deciding in advance what to be done . So it is the thinking and looking of future and its different work which is done in future .

What is planning ?

2009-06-16T21:39:00.000-07:00

Planning is management term because it is most used in management . Planning means deciding in advance what to done in future .
For determining of future works , there are many components include in planning like making of objectives , policies , procedures and rules and budget . Planning is that procedure to capture future with good and scientific estimations and probabilities .

Planning is based on historical data so , 70% to 80% result of planning are favorable for reducing the uncertainty of business .Planning is like river water which is continuously flowing and if it stopped all control of business may stop .

14 principles of management

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Henry Fayol was the first person who wrote the 14 principles of management in 1916 but after this large number of USA wise persons and management experts explains it and utilize it in the business and got success in the business . These 14 principles are so flexible and easily change according to the nature of business .

These principles are not end point in large field of management , after revaluation of information technology , many new management principles includes but after this still 14 principals and its knowledge for the scholar of MBA is must .

Before taking any managerial decision , manager should paramount these principles because these principles are direction lines for MBA . So , I have explained these principles by simplified the head points , after this your duty to study deep when you become management consultant because its deep knowledge is also very necessary for a perfect business manager .

1. Division of work

Every work must be done by perfect employee and how can an employee becomes perfect . Only by division of work . So , Henry Fayol introduced this principle for fast production in factory and with this principle of management , skill and efficiency of labourers increase . They become specialize in their work , after this company can increase the standard of their product .

2. Principle of Equity of Authority and responsibility

This principle is the guideline for all the employees and authorities that authorities and responsibility are two part of one coin and if any higher authority delegates the power to his subordinate then it means that higher authority also delegates the responsibility for doing work on that status . This is wonderful principle which should be in the knowledge of every employee of any company because higher authority can ask about completing of any work and make you accountable also.

3. Principle of discipline

Discipline means obey the order of higher administrator . This principle explains the cultural and ethical value of Old India where if a person learnt from his master , he used to obey every duty of his master . Same principle will apply in business management . Discipline in work and in employee is key of success .

4. Principle of unity of Command

This principle states that orders should be given from one higher authority . If there are two higher authority who give order to one subordinate , then subordinate will misguide and he will not do any work. For the continuity of work , it is very necessary for manager that he observes that is there only one authority on labourer or employee who is giving command or order . If two authority are in same rank , then GM should promote or transfer to one of them .

5. Principle of unity of direction

One main different between direction and command that direction is just guidance without any order or there is not the provision of penalty or punishment , if other will not direct according to direction but in command , if employee will not follow it , it may possible that employer will give punishment for not obey the order . If direction is just guide then why the need of this principle . Answer is very simple . Direction is more powerful tool in the hand of manager because with this manager can make democratic environment but if direction is given by one authority because if two or more leader will give direction anti way , then it will surely reduce the efficiency of employee .

6. Principle of subordination of individual interest to General interest

This principle is telling about two interest . One an employee appoints in the company , there are large nos. of interest like he is interested to get promotion , he is interested to get high salary but this principle is also paramount to the general interest of company . If company sees that providing high salary to employee is not suitable under current situation , company can reduce salary of employees for some time , even any employee can be Removed from service under retrenchment .

7. Principle of handsome salary

This principle is also helpful for development of employee and supports employees that employer should give handsome salary to employee because of increasing inflation of necessary food prices , without handsome salary , employee will not satisfied and turnover ratio of employee will increase and if company wants to develop employee and increase production , then company should provides not only high salary but also provides large number perquisites to employees .

8. Principle of Centralisation

This principle explains that all the high powers relating to making plans and taking decisions must be in few hands and centralisation of power is good way to promote business with high speed . If all powers are decentralised , then it may possible that corruption makes his place and speed of development of business will decrease .

9. Principle of Scalar Chain

In every type of business , business is divided under different levels of management and one authority is above from every subordination but problem arises when one subordinate wants to communicate to other equal rank subordinate . Is it possible that he can communicate . Yes it is possible , Henry Fayol gives the name of this communication "Scalar Chain " After this all problem of management communication are solved .

10. Principle of Orderliness

This principle refers to maintain every thing on its proper place . Even employees also should be one their proper place .

11. Principle of Equality

This principle explains that all employees are same in the eye of business . There is no need to do any partiality on the basis of religion or salary or any other things . If any company creates different among all employees on the basis of caste then it will reduce companies development and progress .

12. Principle of stability of Employees

Stable employee in any organisation is like fixed asset so company should make stable employee by providing good monetary and non monetary incentives to employees .

13. Principle of Initiatives

Initiatives are those motivations which are helpful for employee to do all work with better way. This makes interesting environment of business . All employees feel happy , if some higher authority initiates them to do any work by themselves.

14. Principle of Espirit de corps

Espirit de corps means strength in unity . Henry fayol was high supporter of unity because he knew its importance and value . All employee should understand and create unity among them .

Is management profession ?

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Before answering this question , we should know what is profession . Profession includes all works which are done after getting special education and skills for doing that work. With high education and expertise on any field , nobody can do profession . Profession is very helpful to earn and live the life with money source this profession . Now we can easily answer this question . Management is profession because almost all symptoms of profession to appear in management . For becoming managerial consultant you have to get MBA degree in any specialized field . After specialization in finance , human resources , marketing or research and development , managerial consultant starts his services and gets his professional fees from this . A very small managerial consultant can easily earn $ 2000 to $ 5000 dollars per month . Like any other profession , he uses some code of conduct in his profession . Like profession , management is trained by specific business school and they become certified by these institute .

Difference between administration and management

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1. Administration is top level management in which all the plannings , policies are made by administrator . But management is done all works for activate plans in to action . But all decision powers in the hand of administration .

2. Administration is brain of business but management is hand and foot of business .

3. Administration has power to get net profit of business or share in net profit but management has only power to get salary or wages .

4. Administration word is so popular in govt. and military sector but management is so popular in business specially private sector .

Levels of Business Management

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1st level - Top level management

In this level , board or directors , managing directors and chief executive officer (CEO ) makes all plans , policies for companies . They have power to take different business decisions . Even shareholders who are the real owner of company is also comes in top level management but they have only voting power . But all top level works is done by board of directors .

2nd level middle level management

In this level all departmental manager involve for the activities of business . There are many department like research and development , financial and production , personnel and marketing . Managers of respective department is responsible for making planning and policies and taking different decisions relating to their department .

3rd level - Lower level management

Under this level , Foreman , job leader , group of batch and labours work for business . Their duties in factory , where the actual production work is doing and needed labourers for Keep on working it .

Scope of business management

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Scope means the total area of management in which management is activate . The scope or area of management is very large . From India to USA , management is needed in every type of business . So , its scope can not be bounded in boundaries . But we can write main fields or area of business management

1. Research and development management

In this area , manager is responsible for doing all activities of research and development of business . For this company provides him all facilities like lab , search equipments and other books . Its main aim is to reduce the cost of business and increase the efficiency of business .

2. Financial management

In this area , manager is responsible to make ideal capital structure . Effective utilisation of financial and operating leverage in business . He also calculates different cost of capital and different values of different techniques of capital budgeting for selecting good investment proposal .

3. Production management

In production management , manager is responsible to provide all raw material , labours to production department . He spends his time to reduce the cost of production and observes all the activities of production .

4. Personnel management

Under this management , manager is responsible to recruit , selection , training of employees . He provides all facilities to employees for making ideal working environment . He does also works for benefits of employee and employer . He makes different policies relating to salary and promotion of employees on the basis of work analysis .

5. Marketing management

Marketing management is that functional area of business management , in which manager is responsible to reach product from production to customers . He works for business as best link between business and customers and makes good relationship with employees .

Approaches of Business management

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There are following approaches of business management :-

1. Management by objective :-

This is the first approach of business management . According to this approach , every work is done by reviewing the organisation objectives . After this each employee sets his objectives . His performance is monitored by higher officers . Then performance is evaluated after certain period . If anybody whose performance is favourable , that person is given award . After this Management by objective process is started again .

2. Management by System

This is the second approach of management . According to this approach . Under scientific system of management , different employee's responsibilities are defined and group of employees are also allowed cost and revenue centers . After this environmental factors are also identified . Now all work is done according to system . So this approach is called management by system .

3. Management by Result

This is that approach of management in which every employee of company works under strict control of employer and he is responsible for giving result by doing his work other wise he can also be transferred or dismissed or suspend or demotion from the post .

4. Management by participation

In this approach , all the activities of management of business is done under co-operation and co-ordination of all employees of company and This approach is very democratic and one of best approach in the world ..

Characteristics of Business management

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Business management is process of making planning , organisation , co-ordination and control and there are large number of characteristics or feature can be written but main are following :-

1. Universal process

Business management is universal process . It means the steps for managing any company in India and in USA quite same . Because in management we takes different decisions which will not change in any country . This the characteristics of business management .

2. Continuous process

When we are very small in our childhood , our mother manage all things for us and when we became young we started to manage all our work and in business managerial activities are also operating every time from year to year . So business management is continuous process . When company sells their all products , it starts to plan new production and then for new production all new plans , organisation and control activities are started , so the process of business always continue .

3. Management by objective

This is also main feature of business management that all activities of management is done for getting the objectives of business . That is minimize the cost and increase the profitability of business .

4. Group activities

In business management , manager divides all work in very small part and he gets work from his subordinates . So , business management is also know as group activities and group of manager who takes work from others .

What is business management

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If you go to any business school and read the books of management , you can collect different manager's views regarding business management . But no body could not business management in very simple and consistent way . In very simple words , Business management means decisions which are taken for operating any type of business . Business management concept relates very closely to family management . In a family , parents have taken decisions how to expand monthly in different domestic expenses , how to maintain house , kitchen garden and system of children's education . After this every things look on their relevant place and expense never beyond the family earning . Like this in business , large number of planning are done relating to purchasing of goods and fixed assets and deal with customers . Businessman also takes decisions regarding appointment of employees for division of work .
A great management theorist Henri Fayol said that management is planning , organisation , staffing , coordination and control . He had made 14 management's principles which still now included in the syllabus of master of Business administration (MBA ) . Business management is common subject in every field of MBA specialisation because , manager should know different techniques of planning , direction , co-ordination and control for proper management any business . So , it is very important for business .

Top four MBA Entrance Test in India

2009-06-11T22:24:00.000-07:00

CAT → Common Admission test

MAT → Management Aptitude Test

NMAT → National management aptitude Test

JMET → Joint Management Entrance test

Do full time MBA from university of Pennsylvania

2009-06-11T22:11:00.000-07:00

Pennsylvania is the best university in the world known as Wharton business school . You can get admission for the session of 2010 . deadline is Aug. 2009 . You can apply for admission online here . Students of 70 countries are already studying in this university from whole world .

Information regarding Admission of MBA in Boston University

2009-04-18T09:22:00.000-07:00

Many students take dream to admit esteemed Boston University. Before admission in this university please get following information of this university regarding admission in MBA.

Information regarding Fees of MBA
Application Fee ($125)
Tuition = $37,910
Fees = $486
Books and Supplies (Estimated) = $1,574
Room and Board (Estimated) = $11,808

Other information

TOEFL or IELTS Results BU's code is 3087,

department code is 02TOEFL:

Minimum Scores of 600 on the PBT, 250 on the CBT, or 100 on the IBT are recommended.

IELTS: A student must score a minimum of 7.0 across each band.

Permanent Residents only Copy of your permanent resident card (front and back).

Did you see Boston University's school of management's Classroom

2009-04-09T07:59:00.000-07:00

This is the class room of Boston University's school of management .

In this school's class room there are following features :

25 state of the art classrooms

a 375 seat lecture hall

5 computer lab

The Frederick S. Pardee Management Library.

4000 wired dataports.

a fully-wired Starbucks Café, with data ports at many tables.

Have you any experience to write MBA essay ?

2009-04-09T07:53:00.000-07:00

oneillo has upload his picture in flickr in which he want to show his experience of writing easy in MBA study . I think Ms. word is best for writing any easy of MBA because , you can check the words , characters and paragraphs with the tools of ms words .

Know One year post graduate programms in management's one year fees structure

2009-04-09T07:47:00.000-07:00

Are you interest for doing MBA from Indian School of Business (ISB ) . Then , I am providing you the fees structure of PGPM in above picture . This will give you good idea to plan of fund before admission in said course .

How to teach MBA classes

2009-04-03T10:34:00.000-07:00

Because , I have already taught MBA classes , I can give you some tips for teaching MBA classes . Teaching to MBA classes is not equal to teach graduate classes because , In MBA classes , you can find many different speciality students . So , learning of psychology of each student is very necessary for better teaching in MBA classes .
I am writing some simple tips only for all teachers who are teaching or just are going for teaching to MBA classes .

Tip 1.

If some of students in MBA class are weak due to other subject graduate , then teacher should keep teaching slow with some extra guidance to bright students of MBA .

Tip 2.

MBA is big class , and it may happen that sometime teacher is not able to answer the question of a pupil at this time , he or she should say to MBA students the he or she will answer after consultation .

Tip 3.

If teacher wants to maintain classroom discipline , then teacher should provides a programme which is according to the need and interest of MBA students.

Tip 4.

Way of instruction should be such so that students can understand what is teacher saying and also try to conclude his lesson with in his lecture .

How can MBA professionals increase their salaries

2009-03-20T10:25:00.000-07:00

For getting MBA degree and get dream job in Global market is the aim of any young person . But when , they become professional in Global Market , at that time , they need to adjust their salary expectations. Every young MBA wants more salary for his work . But how it possible , they do not know . But I have some idea which can be helpful for all young MBA professionals .

Idea No. 1

Start to independent management consultancy work. When they will start their management consultancy work with their job . It will increase their reputation in Global market and one day , you will become the decider of your salary because , demand of high professional MBA is always in the same direction of deserve MBA persons .

Idea No. 2

Never work in such organisation which decrease your salary standard . Sometime , due to completing last contract and not obtaining new contract several MBA starts work under low profit organisation . It will surely decrease your salary level . If you want to increase your salary then be patient or start to search high ranked company or organisation for performing your duty .

Idea No. 3

If you want to increase your salary then , fix the target of next year salary and start work hard with full concentration and check the weak point of your company and remove these weak point of company with your skill and ensure your higher authority that you deserve for promotion . And if you get promotion letter , it means you will get higher salary .

Idea No. 4

Always pick or catch the opportunity in your MBA career . A person who can not pick right opportunity at right time , will never succeed in life . Getting higher rank job opportunity means high salary and high rank .

Information about Accounting Education blog

2009-02-27T11:42:00.000-08:00

Dear MBA Scholars ,
If you are interested to get more information of accounting and its different aspects , then you can get from my other site Accounting Education at url http://svtuition.blogspot.com/ where you can find every thing about accounting , different accounting notes, use of different accounting software and you can also submit your profile in e-jobs link. I think that site will also useful for you .

Aspect of management of debtors

2009-02-27T00:43:00.000-08:00

1. Recording aspects
All person can become debtors , if they bought goods from any company . Company says them debtor or customer. So , it is duty of account manager to record all debtors , if the number of debtors are in millions , then we can also keep separate debtors ledger .
2. Cash receiption aspect :
It means when we receive money from debtors , it must be received by proper authority . Its record must be done both in cash book and debtor's account . So , that , we can easy transfer loss of bad debts to profit and loss account .
3. Provision for doubtful debtors
It is also the aspect of management of debtors . It is the duty of account manager to keep and record some amount of profit as provision for doubtful debtors . So , that when any loss happen due to not received money from debtor , at this time this provision can be used for new purchasing of goods . So , that our working capital shortage can be removed .

concentration banking and its benefits

2009-02-27T00:35:00.000-08:00

concentration banking may be defined as system of bank for increase the monetary transactions . For development of bank , it is basic responsibility of bank manager to increase the customer of banks . But bank also takes care of his controlling system , so that all branches work can be checked and develop bank at international level .
benefits of concentration banking
With using this method , working of banks becomes very fast , easy and up to dated without any restriction

Working capital cycle

2009-02-27T00:29:00.000-08:00

In manufacturing organisation , working capital cycle starts from purchasing of raw material and its end is on cash received from customer by selling finished product to customer . In this cycle , we can include the activities of purchasing raw material , work in progress , making of finished goods and contain in stock , sale the goods on credit and show the account of debtors and in last we also include cash or bank account , if we receive our sale value from debtors . This is called working capital cycle .

Bank and it role in economy

2009-02-24T08:18:00.000-08:00

Do you know bank ?

If not , I explain about bank . Bank is an organisation which deal in money . It is helpful for promoting save . It also provide loan for personal and business use . Thus Bank receives money and pays by honouring cheques of persons from whom or on whose account he receives it .

Bank may also be defined as an institution which collects surplus funds from the public , safeguards them , and makes them available to the true owner required and those who are in need of funds and can provide security .

A bank is an artificial person which holds itself out to receive from the public deposits payable on demand or cheque.

Above is simple explanation of bank , but , if we study any bank deeply , we find that bank is a creator of economy of any country . With good activation of bank , any country can not develop their economy .

Banks are hand which pick country and face every economic problem. Bank can support a dead company by providing loan . Banks can also support farmers by providing them loan without any security . India is the land of village and farms . So , it is very necessary for bank to give more loan to farmers and never take interest from them .

Bank is back- bone of country . If they leave to do scams , they can easily develop any country . It is the duty of bank manager to look the society and provide them loan for self-employment.

By doing this bank can help to unemployed persons and decrease unemployment .

Is MBA suitable for girls ?

2009-02-24T08:05:00.000-08:00

If any body ask this question from me , is MBA suitable for girls ?

Then , I will give answer .

Yes ! MBA is most suitable for girls .

In the 21st century , girls are increasing knowledge by getting higher degree . MBA is the best career for girls .

They can also choose their best Field in MBA . Many girls choose HR because , they want to get seating job .

But , these days , girls are also taking Marketing field and want to prove herself in this field .

MBA Achievement

2009-02-23T06:24:00.000-08:00

MBA Achievement means obtaining success in the field of MBA . When you can get success in the field of MBA . Only when , if you read your all questions of MBA with full intention and learn them with full concentration . MBA field is most practical field , so without concentration , you never succeed in this field .

Many students have got achievement the field of MBA . What is reason for this . Its main reason is their hard work and positive approach for understanding the concept of MBA .

Only MBA is a course in which different fields students get admission . So , It is new but they should ignore as simple study . It is the opportunity to you to achieve success in the life .

MBA Research

2009-02-23T06:06:00.000-08:00

MBA -research means to find what is new in MBA. It is fully dependent on the hard work of MBA scholars . Day and night hard work surely create new inventions in the field of MBA.

There are following aims of MBA research

In MBA research , a MBA scholar always interested to find new thing . These days business and commerce is increasing very fast and if MBA Scholar has no skill to research he can not become good MBA professional .

Logical

His new invention must be proved by himself with effective logical beyond that invention . If there is no logic , it will waste the time both user and researcher .

Helpful for businessman

MBA scholars all inventions and researches must be useful for businessman . If his research increases the problems of businessman , then it will not effective . So , never research that invention.

For increasing efficiency

As good MBA scholar , it is his basic duty to research and invent new things so that it will increase the efficiency of company and its employees .

Increasing Craze of MBA

2009-01-28T23:36:00.000-08:00

We see in our society that some children have good habit to work systematically , if they make this habit or hobby as their career , then there is no difficulty for achieving the dreams of life .In Good manager , there should be three qualities

Attitude

Aptitude

Approach

If you have above , three qualities , you can give the challenge of his capacity in the field of management . If you are interested in MBA admission , then you have to clear first CAT , MAT , OPEN-MAT , XAT , JMAT , FFS , IBASAT , NAMT , SNAP etc. With the way of CAT , you can get your admission in reputed Business school like , IIM of Ahmadabad , Mumbai , Indor , Lakhnao and Kojikod and relative Business schools . For clearing the exam of Entrance for MBA admission , you have to do hard work . All above examinations , examiner asks approximately same questions .For this you have to get all knowledge .

Selection Process

Ist Step

Many business schools ask the following questions in written examination.

Language skill : Verbal ability , English Grammar , its usage , reading comprehension etc.

Quantitative Skill : Mathematical ability.

Reasoning : question relating to reasoning concepts .

Second Step

Group discussion and personal interview : In this step , Interviewer checks the leadership and positive quality of candidate by GD and check general knowledge , self-confidence etc by PI .

Third Step

Specialization and choose of Institution :

If any candidate succeeds from above two steps , then he has to take final exam , that is chosen of specialization and institution.

There are following MBA specialization Field of MBA

Accounting

Finance

Human resources

Marketing

Entrepreneurship

E-Commerce

Statical methods for business and industry

International business administration

Nursing

Planning management

MBA - Career as a Challenge

2009-01-22T21:18:00.000-08:00

Today, businesses are going to recession. It means their production is more than their sale. So, at this time if you have choose MBA career, this is really a challenge because, all decision depends on manager's thinking and strategy. If a manger makes good plans and policies, then business can save from this recession. Managers have the capacity to make competitive strategy and get the part of business from competitors. If you want to make MBA career as challenge, then you have to learn business policies and managerial strategy. Because business policies and managerial strategy are so important for MBA. Different policies like marketing, production, finance, research and development are make integrate business policies. MBA Scholar utilizes these policies for benefits of business. He uses business strategy for integrates an organizations major goals, policies and actions. He tries to design strategy in such shape that is helpful for achieving basic objectives of enterprise. There are following challenges for MBAs:-

1. To achieve vision, mission, objectives and goal of business :-

It is main challenge of MBA to achieve the objectives of business . Main objective of business is to increase profit and decrease all losses of business but MBA see long term progress of business means stable and optimum level of business’s progress.

2. To scan business environment :-

Scan of business environment is the responsibility of MBA. It means MBA see the different things like economy, competition, technology, social responsibility and other cultural factors of business. After then he has to make different business plans.

3. To internal analysis of business

This is also challenge for MBA to internal analysis of business . What is the product of company , how it made , what is its quality standard , what is its price , is it suitable for world market and there so many question relating to internal analysis of business , because after understanding and analysis these internal factors MBA can make the better plans for business .

4. Quality Control :-

Quality is so important for business. If any business want to exist, then it is responsibility of MBA to check the quality whether it is under standard or not. If it is not under standard then control the quality and improve it.

5. To do Strengths , weaknesses , opportunities and threats Analysis ( SWOT Analysis ):-

SWOT analysis is so important not just India but also in whole world. All business school train their MBA scholars in SWOT Analysis because weakness of business and how to identify them is the major skill of MBA. Because after this weakness can be converted into strengths of business.

6. To develop strategic Alternatives:-

A MBA scholar does not make just one strategy but he develops different strategy alternatives.

7. To apply different strategy :-

Not only making of strategy but its application is also so important, MBA uses different techniques to apply different strategy at different time.

8. To collaborate the different links and sources of business :-

Business is the name of links and sources but MBA is name of connector of different links and resources of business .

25 tips for MBA Career

2009-01-22T20:53:00.000-08:00

MBA is the major career in this world of business . I have tried to give 25 tips for MBA career , I think this will be useful for you .

If you have ability to manage everything , MBA is the best career for you.
If you decide everything within one minute , MBA is the best career for you .
If you always think about future , MBA is the best career for you .
If you know how to talk , MBA is the best career for you .
If you want to See every thing system basis , then MBA is the best career for you .
If you love discipline , then MBA is the best career for you .
If you love the management of God , the MBA is the best career for you.
If you can take work from other , then MBA is the best career for you .
If you speak sweet , MBA is the best career for you .
If you want to change our political system , MBA is the best career for you .
If you want to become the master of your decision , then MBA is the best career for you .
If you have to reach top level of administration , MBA is the best career for you .
If you want to earn in Six to eight figure , MBA is the best career for you .
If you want to show your work as example , MBA is the best career for you .
If you learn how to stand from below , MBA is the best career for you .
If you have the skill to attract someone , MBA is the best career for you .
If you can give challenge to do something , then MBA is the best career for you .
If you want to learn business , MBA is the best career for you .
If you want to develop your country , MBA is the best career for you .
If you see stability in economy , MBA is the best career for you .
If you love your mother's management and want to do most difficult work just like the work of mother , then MBA is the best career for you .
If you are interested to solve every problem of business , MBA is the best career for you.
If you can change Rs. 1 into $ 1 , MBA is the best career for you .
If you run as fast as technology , MBA is the best career for you .
If you want to go to every part of world and interested to join business meetings and conferences , MBA is the best career for you .

MBA Admission

2009-01-11T16:48:00.000-08:00

After graduation , every person can do MBA . Large number of business schools , Different universities and Management Institute have opened for providing education to the candidates who want to do MBA . MBA can be done with two way . One is regular MBA and Other is through correspondence or distance MBA. If any students have done graduation in management field , means if he or she has done BBA , the MBA becomes so easy . But other fields students also doing hard work for getting admission for doing MBA . Approximate Top 250 B- Schools of India are providing MBA education . Students can choose one of best Institute out of them . I am here given Top 12 Institute of MBA where you can take your MBA .

BADRUKA INSTITUTE OF FOREIGN TRADE HYDERABAD
http://www.bift.ac.in/

CHAITANYA BHARATHI INSTITUTE OF TECHNOLOGY HYDERABAD
http://www.cbit.ac.in/

Gian Jyoti Institute Of Management & Technology Mohali
http://www.gjimt.com/

Nirma University, Institute Of Management Ahmedabad
http://www.imnu.ac.in/

Kurukshetra University Kurukshetra
http://www.kuk.ernet.in/

University Of Jammu, The Business School Mmu (Tawi)
http://www.jammuvarsity.org/

Sikkim Manipal University Ranchi
http://www.manipalu.com/

Institute For Technology & Management Bangalore
http://www.itm.edu/

Dept Of Commerce & Management Studies Malappuram
http://www.universityofcalicut.info/

Iilm Business School Bhopal
http://www.iilm.edu.in/

Balaji Institute Of Management & Hrd Pune
http://www.balajisociety.org/

International Management Institute New Delhi

http://www.imi.edu/

Two year MBA programs are generally in existence . . Accelerated MBA programs are a variation of the two year programs. They involve a higher course load with more intense class and examination schedules. They usually have less "down time" during the program and between semesters. For example, there is no three to four month summer break, and between semesters there might be seven to ten days off rather than three to five weeks vacation.

Through Distance learning of MBA

The admission of private or through correspondence is also famous . Many students can get admission through distance learning programme of MBA .
Distance learning MBA programs catch classes without any regular campus . These programs can be proposal in a number of different formats: correspondence courses by postal mail or email, non-interactive broadcast video, pre-recorded video, live teleconference or video conference, offline or online computer courses. Many respectable schools offer these programs; however, so do many diploma mills. Potential students should check the school's accreditation before undertaking distance learning coursework. Many universities , these days operating distance learning certificate course of MBA .

Here I am giving Some universities where you can get MBA degree through correspondence study.

1. Indira Gandhi National Open University

Admission to Management Programme (MP): MBA / PGDIM / PGDHRM / PGDFM / PGDOM / PGDMM

Entrance Test 'OPENMAT-XXV': February 1, 2009Last date for receipt of request for prospectus by post is: December 20, 2008

Eligibility for Admission:

(1) Student must be Graduate in any discipline with 50% marks for general category and 45% for reserved category. Otherwise he will not eligible for doing MBA .

(2) Graduates who have successfully cleared the entrance test for admission into the management programme conducted by recognised institutions like CAT, MAT State level test conducted by State governments etc., need not sit for the OPENMAT Entrance Test. There is no age bar for any of the Programmes. Filled in form for Entrance Test 'OPENMAT-XXV' must reach the Registrar (SED), IGNOU, Maidan Garhi, New Delhi 110068, by Registered Post/Speed Post on or before 31st December, 2008.Application form and prospectus can also be downloaded from (the website: http://www.ignou.ac.in/ and sent alongwith a DD/IPO for Rs.550/- in favour of IGNOU payable at New Delhi by Registered / Speed Postto: Registrar (SED), Block-12, IGNOU, Maidan Garhi New Delhi-110068. Prospectus will be sent to such applicants after receipt of Rs.550/- as explained above.'Student handbook and prospectus for management programme, can be obtained from the Registrar (SED), IGNOU, Maidan Garhi, New Delhi-110068 and from all the Regional Centres of IGNOU who addresses are given below by sending a sum of Rs.550/- through a DD/IPO in favour of IGNOU payable at New Delhi/cityof concerned Regional Centre or by paying Rs.500/- in cash at the respective sale counters.

Please writeyour name and address on the back of the DD/IPO.Indira Gandhi National Open University, Maidan Garhi, New Delhi-110068

2. Maharshi Dayanand University, RohtakDirectorate of Distance Education

Applications are invited for admission to following programmes (semester system/annual system) commencing from July 2008 through distance education mode:

(6) MBA (1st Semester) Two Year Course / MBA (3rd Semester - One Year) lateral entry
Admission Schedule: Normal Admission: 14.7.2008 to 4.9.2008With late fee of Rs.500: 5.9.2008 to 6.10.2008 / With late fee of Rs.1000: 7.10.2008 to 31.10.2008With late fee of Rs.1500: 1.11.2008 to 30.11.2008With late fee of Rs.2000: 1.12.2008 to 15.12.2008
Price of Prospectus: At Counter: For General: Rs.300 / For SC/BC of Haryana only: Rs.75By Registered Post: For General: Rs.350 / For SC/BC of Haryana only: Rs.125.Prospectus can be obtained from:

(1) Incharge, Publication Cell, Maharshi Dayanand University, RohtakPh. 274625.

(2) At Counter of DDE (Ph. 01262-279686).

(3) All the Study Centres (for detail of Study Centres visit: www.mdurohtak.com/dde).

(4) Prospectus/application form can also be obtained by logging in at MDU website: www.mdurohtak.com/dde. However, the form downloaded from the website must be accompanied with cost of prospectus given below.

(5) All the Study Centres are required to deal directly with the university.

(6) For enquiries: Contact the Dy. Registrar (DDE), M.D. University, Rohtak-124001. Phone: 01262-215574, 215573.

(7) Prospectus may also be obtained by Regd. Post through DD in favourof Finance Officer, MDU payable at Rohtak.

Other Universities Websites which is providing MBA - Distance education

www.annamalaiuniversity.ac.in

www.ksoumysore.com

www.unom.ac.in

www.bharatividyapeeth.edu

www.b-u.ac.in

www.welingakronline.org

www.mitsde.com

www.sinhgad.edu

www.mkudde.org

www.iict.in

Many students are also interested in admission in abroad . That is good but many problems for getting MBA education in foreign country . But , If you decide to do MBA in foreign country then , I am mentioning top Foreign universities which are providing MBA education.

Arizona State UniversityW. P. Carey School of Business - MBA-Full-time Program

Babson CollegeFranklin W. Olin Graduate School of Business - Two-Year MBA Program

Boston CollegeThe Carroll School of Management

Georgetown UniversityRobert Emmett McDonough School of Business

The University of IowaHenry B. Tippie College of Business and School of Management - Henry B. Tippie School of Management

University of British ColumbiaSauder School of Business

University of Western OntarioRichard Ivey School of Business

Simon Fraser UniversitySFU Business - Management of Technology MBA

York UniversitySchulich School of Business

University of RochesterWilliam E. Simon Graduate School of Business Administration

Last but important point relating to your MBA admission , I want to tell what specialisation subject should choose in MBA . I think , it is dependent on your interest , all field are very important , we can not ignore MBA marketing , or MBA HR , if you are willing you must take your interested subjects .

Earning and status is dependent on your performance in any field of MBA . So

I wish best of Luck For your MBA admission .

See Also

MBA - Finance Education Updates

What can do the MBA student

career opportunities for M.B.A. students

To cover and to earn by becoming MBA - Finance

MBA - Finance Education Updates

2009-01-05T12:17:00.000-08:00

In the beginning MBA was without any classification . All the subjects' burden was on the head of students either he took marketing specialization or finance specialization . But now some of Universities started MBA-Finance where only accounting , management accounting and finance related subjects will include in the the syllabus of MBA students . This is also benefited for those who want to make their bright career in the field of accounting . Moreover non commerce background students will also get specialisation in the field of accounting. Indian all universities have given acceptance about uniqueness of financial subjects in MBA finance. UGC also gives guidance that MBA finance Scholar must become in accounting and financial subjects . There is no need to give marketing and other management burden to MBA finance students .

But , in real sense , we see that , this will be adverse affect also because , marketing and personnel management is also connected with finance and a small education of marketing and personnel management should be also in the hand of MBA finance . All sector's scholar should know not only our field but should know other field , because in this business environment , we see that every field becomes dependent on other field . So , it will be better that MBA Finance educational syllub be made such a way , so that after completing MBA finance course , they can understand the business management not only financial point of view but also give analyse with other point of view .

Example of Cash flow statement

2008-12-16T15:12:00.000-08:00

From Drop Box

Cash flow statement is so easy to make . I am taking the example of Google Inco. . It made his cash flow statement and I am giving its picture for reference and learning purpose. I have already write enough on the topic of cash flow statement in my previous articles . Today , I just give you the example of cash flow statement . Because , it is compulsory under international accounting principle , So As a student of MBA -Finance it is your prime duty to learn about making of cash flow statement and now understand it that what I write in my previous scholarly notes on cash flow statement and picture of cash flow statement of Google Inc. Are same .

Reference of Picture

Google's Financial Statements

Comparison between financial accounting and Cost Accounting

2008-12-14T23:31:00.000-08:00

In the syllabus of MBA finance bot financial and cost accounting is included so , you should know the basic difference between two type of accounting .
Financial accounting is the warehouse of historical accounting data . But cost accounting is the system to calculate each product or job cost from financial data and then try to control them
Suppose

Comparison between financial accounting and Cost Accounting

Cost accounting gives clear information A and B product generate average 25% profit but C generate loss , Now manager takes the action
I) to stop the production of C
Or reduce the cost of C
Or
Increase the sale value of C
2. Financial accounting gives only monetary information but cost accounting tells non monetary items also.
3. Calculation of efficiency in financial accounting is not possible but cost accounts calculate each cost of various cost centers and provide the information about which machine , group of employee or cost center is more efficient .
See Also
comparison between MBA – finance and C.A.
Scope of Cost Accounting

To cover and to earn by becoming MBA - Finance

2008-12-06T05:24:00.000-08:00

A finance accountant is very important for financial management or administration . Without his presence , it is imposible to operate any company properly .

It is duty of MBA - Finance to manage all financial matters .He is responsible to maintain all financial record , tax provision and other law relating to the company.

Likelihood

Due to the likelihood of powers , reputation , and earning , a large numbers of youth desire to make career in this field. But from some of last years , due to changes in the economy , this profession's reputation has been increased . There are many other reasons , working area of MBA - finance has been increase with changing in the time.

Today , MBA- Finance profession are seen as complete business providers .

Single Eye on the career of MBA - Finance

☼ Starting salary from Rs. 5 to 15 Lakh per year in Corporate Sector

☼ Earning between Rs. 5 to 12 Lakh per year , if started independent Profession of financial and managerial consultant

☼ Demand of MBA - Finance in India is more than 120000 persons.

☼ Demand of MBA-Finance in foreign is more than 30000 persons.

☼ MBA-Finance can be done by art , commerce and also science graduate.

Qualities of the persons who want to become MBA-Finance

☼ Basic professional attitude

☼ Patience

☼ Logical and mathematical skills

☼ Basics of management accountings

See Also

Career Oppurtunities of MBA-Finance

Scope of MBA

Importance of Calculation of cost of capital

2008-12-04T08:59:00.000-08:00

Cost of capital is an important consideration in capital structure decisions. It is obvious that a business should be at least capable of earning enough revenue to meet its cost of capital and finance its growth . Hence , along with a risk as a factor , the finance manager has to consider the cost aspect carefully while determining the capital structure. I have tried to summarize the importance of cost of capital

1. Acceptable criteria in capital budgeting

2. Useful in capital mix

3. As a basis for evaluating financial performance

4. It is useful in making decision

See also

Cost of capital - Definition

Cost of capital and its aspects

2008-12-04T08:44:00.000-08:00

From some days , I am thinking to write on the topic cost of capital for MBA students. For MBA students , cost of capital calculation is so important because after their MBA when they will go for practical field in the corporate sector at that place some time it is the need to calculate the minimum rate of return , actually this is cost of capital . I can say it as the cost of capital is rate of return which a company requires from investment in order to increase the value of the firm in the market.

The concept of cost of capital is divided into three aspects.

1st Aspect

Cost of capital is not as such it means the cost of capital is relating to the rate of return which a firm requires to earn from its project

2nd Aspect

It is the minimum rate of return

3rd Aspect

Rate of return due to risk

4th Aspect

The increase in the rate of return is required due to business risk and financial risk

1) Zero level risk

2) Business level risk

3) Financial level risk

See Also

Budgetary control

Scope of Cost Accounting

2008-12-01T02:09:00.000-08:00

It is very important for MBA students to know the scope of cost accounting because when they will go to his practical field , they can fix their responsibilities according to the scope of cost accounting . The cost accounting 's scope is limited up to the control of cost. It is started from ascertain of different costs. The responsible person calculates the cost of their cost centre . After calculating all jobs , centres ,operating cost , we see that it is accordance to standard prefixed budget , if it is more than our budgeted cost , then the scope of cost accounting includes extra control . So , all universities has included cost accounting in the syllabus of MBA classes.
See also
Objective of Cost Accounting

MBA Finance Notes

2008-11-30T08:31:00.000-08:00

I have written Scholarly notes of MBA Finance . These notes will be updated from time to time So , If you want to take the benefits from these notes , you must keep in touch by our free email subscription or by RSS feed , So that you can get latest notes relating to your MBA Finance problems . Following , I am giving some links relating to MBA -Finance Notes according to the different lessons . In future I will more add so keep in touch .

Cost Accounting

Chapter 1. : Basic Concepts

Chapter 2. : Materials

Chapter 3. : Labour

Chapter 4. : Overheads

Chapter 5. : Job Costing

Chapter 6. : Contract Costing

Chapter 7. : Batch Costing

Chapter 8. : Operating Costing

Chapter 9. : Process Costing

Chapter 10. : Service Costing

Financial Management

Chapter 1 : Financial Management : An Overview

Chapter 2. : Working Capital Management

Chapter 3. : Tools of Financial Analysis

Chapter 4. : Capital Budgeting

Chapter 5. : Project Planning

Chapter 6. : Leverage

Chapter 7. : Capital Structure

Chapter 8. : Cost of Capital

Chapter 9. : Finance

Limitation of Financial Accounting

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There are many limitation of financial accounting which we are giving in the following list :-
1. No practical view of Performance : - Financial Accounting is fully bookish , we do not do any adjustment of inflation and deflation in financial accounting . It may possible that our financial statement will not show our true financial and revenue position . Suppose , we make our final accounts one the basis of historical cost and our assets shows of RS. 500000 but due to deflation its value at market may be RS. 200000 , so RS. 300000 is dead capital is also included in financial statement of financial accounting.

2. No calculation of Weakness :- Financial accounting deems whole business is one unit and gives us net result of business .In this we can not calculate each job , process and department's net profit or loss . So this accounting system can not bring the weakness of business in the front of us .

3. No helpful in price determination:- Financial accounting is not for calculating the price of product , services because it does not provide deep analysis of the cost of each job and each activity.

4. No proper control on the costs :- Financial accounting can not be helpful deeply control on the cost of supply of materials , labours and other overheads .

5. No answer of many questions :- Financial accounting does not give the questions like

a) Should we try to sell more goods

b) If we accept a order or contract , is it will gives us proper profit on that order or contract .

c) Why is net profit is so minimum , even our production is very much.

d) If we increase the cost of labour by .50 paise then is it necessary to increase the sale price .

See Also

benefits of Accounting

Financial Administration

Control Ratio

2008-11-29T11:40:00.000-08:00

Basically Control ratio is showing the variance between original data and budgeted data . With these ratio we can easily guess our favourable or unfavorable points in the performance .

1st control Ratio

Capacity Ratio

Actual hours worked

= ---------------------- X 100

Budgeted Hours

If it is 90% it means we can not use 10% of budgeted hours and our performance is less than our budget.

2nd Control Ratio

Efficiency Ratio = Standard hours for actual production / Actual hours worked X 100

If it is 125% it means we have increased 25% of our efficiency

3rd Control Ratio

Activity Ratio = Standard hours for actual production / Budgeted Standard hours X 100

See Also

Budgeting And Forecasting

Difference between budget and forecast

2008-11-29T11:24:00.000-08:00

Both are relating to the estimation of future but , if we deeply study the both concept we can get following differences between them. :-

1st Difference

Budget is based on planned events . We actually makes stand in advance and then control our position

forecasting is just estimation of uncertain future for making planning .

2nd Difference

Budget is made for one financial period

Forecasting is for long time.

3rd Difference

It is necessary for budget or corporate to make budget

forecasting is suitable in that field where we do not make budget.

Related : Govt. Budget

MBA Career Tips

2008-11-27T07:53:00.000-08:00

General Tips of MBA career

Role of Accountant in an organisation

2008-11-24T20:10:00.001-08:00

Accountant is very important person in any organisation . He is responsible for maintaining the accounting records. His role is as information giver . He is so important for calculating the net profit . He gives the information to his employer about the revenue and financial position of organisation . If any accountant is appointed in any company , then has to calculate excise , VAT and Income Tax amount and also file return of above duties and tax as the representing officer of company.

For more detail of tips of professional Accountants

comparison between MBA – finance and C.A.

2008-11-15T03:32:00.001-08:00

Q:- 5 Give the comparison between MBA – finance and C.A.

Ans. There are so many similarities in the field of MBA – finance and C.A., so MBA are also appointing for the post of finance manager instead of C.A. in India and Abroad. But , C.A. has his own existence which is no substitute of any other area . Now we are giving you different difference between both area of education:-

1st difference

Chartered accountants are audit work specialist but master of business administration in finance are the specialist for doing analyze of acquiring and using of finance.

2nd difference

Chartered accountants are most suitable for doing his accounting and auditing professional work. But master of business administration in finance is most suitable for company as manage for finance.

3rd difference

CA has wider knowledge in the field of accounting and auditing. But MBA finance has wider knowledge in the field of administration and management.

financial administration

2008-11-15T03:31:00.000-08:00

Q:- 4 What is business’s financial administration?

Ans:- Today , M.B.A. are appointing for the post of finance manager. So, it is very necessary for MBA students to know about financial administration of business.
It is a complex management in which manager see and analyze each and every point for acquiring and effective utilization of finance for the benefit of corporate.

career opportunities for M.B.A. students

2008-11-15T03:30:00.002-08:00

In the entire field a manager is very necessary to attend, so there will be one M.B.A. for every organization .A single M.B.A. is fully capable to do each and every type of business activity.
In other words, if you have done your M.B.A. with full of honesty and dedication, you never live unemployed M.B.A. candidate. But, do not forget struggle. After M.B.A. , you life will start . Start your life like child in the career of MBA. You are fresher but your skills are not fresh.
There are following main career opportunities for M.B.A. Students:-

Ø Managerial post in every banks
Ø Finance manager in MNC
Ø Market analyst in every type of industry
Ø Managerial post in HR department of company

Scope of M.B.A.

2008-11-15T03:30:00.001-08:00

Q:- 2 What is the scope of M.B.A. ?

Ans. First of all, we have to know the perfect meaning of scope. There are many meaning of scope in dictionary. Some of them are end, aim, outlook, sphere of action, extent, vent , purpose etc. But here we take the extent meaning of M.B.A. in the form of scope.
In simple wording M.B.A. has no limited scope. But , its extent is so large which we can not measure. In other words, in the scope of M.B.A. whole accounting , business math, commerce , e-commerce , IT , marketing are included .Today , if you want to become good business man then it is very necessary to get M.B.A. education. So above all is real scope of M.B.A.

M.B.A.

2008-11-15T03:28:00.000-08:00

Definition of M.B.A.
M.B.A means master of business administration. After graduation , the student can get do post graduation in this field .M.B.A. enhances the knowledge of students in the field of management .After clearing M.B.A. student becomes perfect for solving all managerial and administrative problems. He can make good manager after passing out M.B.A. MBA is not just one field but group of specialized field . From this large group you have to choose any one for the sake of making your career. In MBA , finance , marketing , personnel or human resource management is also included . In other words , MBA means Complete master in administration . Before starting this subject , political persons could work in this field . Only political administrators deemed as essential part of management . But after starting this course , New and unpolitical background candidates comes in this field and made their career . MBA word becomes the sign of reputation and this field is growing day by day. Every organisation management is operated by MBA scholars .
MBA has become the sign of good management of any organisation . MBA word links also business schools .

Related Notes

Practical example of cash flow statement

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Prepare cash flow statement from following data
Balance sheet
Liabilities

Capital 2006- Rs 370000 and 2007 –Rs. 372500
Bank loan 75000 and 62500
Mrs. A loan ----- and 50000
Creditors 90000 and 102500
Assets
Cash 10000 & 9000
Debtors 87500 & 96000
Stock 62500 55000
Land 50000 75000
Building 125000 137500
Machinery 200000 215000

During the year mr. bhushan (Propritor ) had withdraw rs. 65000 for personal use , the provision for depreciation against machinery opening was RS. 67500 and closing was RS. 90000
Cash flow statement ( with indirect method)
A – category
Cash flow from operating activity
Net profit as per capital account
( 372500-65000-370000 =67500 ) 67500

Add non cash expenses and losses
1 depreciation 22500
Closing – opening
(90000-67500)
2. credit purchase or increase in creditor 12500
(102500-90000)
3. Decrease in closing stock
(55000-62500) 7500
____________________________________________
110000
Less credit sale or increase in debtors
(-) 8500
__________________________________________
Net cash flow of operating activity (+) 101500 (+) 101500
___________________________________________

B- Category
Cash flow of investing activity
Outflow
Purchase of land (-) 25000
Purchase of building (-) 12500
Purchase of machinery (-) 37500

__________________________________________

Net cash flow of investing activity (-) 75000 (-) 75000
___________________________________________

C-Category
Cash flow of financing activity
Cash inflow
Mrs. A’s loan (+) 50000
Cash outflow
Drawing (-)65000
Bank loan repaid (-) 12500
____________________________________________

Net cash flow of financing activity (-) 27500 (-) 27500

Net cash flow of all category
(A+B+C) (-) 1000
Add opening balance of cash book (+) 10000

Closing balance of cash book (+) 9000

Benefits of cash flow statement

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1. Dual checkness
By making cash flow statement we can check our cash book with cash flow statement, because when we add opening balance of cash book in net cash flow, it must equal to the closing balance of cash book.
2. Evaluation of cash position of business :-
With making of this statement an accountant of company can easily estimate the position of cash of business at present time. Because while we are making cash statement we care all changes of cash between two period .After this we can easily see then net changes in two periods relating to cash.
3. Comparison of two companies in same industry
With making of cash flow statement we can compare two companies cash position and calculate which companies cash position is better. Then we find the reasons of this.

cash flow statement

2008-10-31T02:02:00.000-07:00

Q:-1 what is the cash flow statement? How will you make cash flow statement according to Accounting Standard -3 (revised)? What are the main benefits of Cash flow statement?

Ans. Definition of Cash Flow statement

Cash flow statement is a statement which showing the net inflow and outflow of cash between two period. On this statement, we can easily estimate the financial position of any company on the basis of cash inflow and cash outflow.
Explanation

Explanation with Example

Opening balance of cash book is Rs.5000 and closing balance of Cash is Rs. 7000. This balance and all receipt and payment of one year cash book never tells us about what is the real flow from one year to next year. If closing balance of 2007 is Rs. 5000 why it becomes it Rs. 7000 in closing balance in 2008. The answer will give the cash flow statement. Which gives us true cash position of our business with analysis for of two period balance sheet.

New Amendments:

According to Company law 1956, it is compulsory to publish cash flow statement with profit and loss account and balance sheet of Company.

Revision of Accounting Standard -3

Institute of charted Accountant of India has revised accounting standard -3 in 1997 and now in 2003 fully. Now new guidelines are given in AS-3. So reading and understanding is very compulsory before making of any company cash flow statement. ICAI is not given any Performa in AS-3.

But with these guidelines we can make cash flow statement in two methods
1st Method of making cash flow statement –Direct method
This first method of making cash flow statement is called direct method. Under this method we divide full cash flow statement in to three categories one is cash flow of operating activity and second is cash flow of investing activity and third is cash flow of financing activity. We are giving the Performa of this cash flow statement.

Cash flow statement of Company (based on two year balance sheet)
According to AS-3(revised – Direct method)

Particular Amount ( In RS.) ↓ Amount (In RS.)
A- category
Cash flow of operating activity
Inflow of cash
Cash receipt from customer
(Total Sale + Opening Debtor – Closing Debtors) xxxxxx

Other operating receipt xxxxx

Less Outflow of cash

1 Cash paid to supplier
(Cost of sale + Opening balance of creditors – closing
Balance of creditors) xxxxxx

2 cash paid for operating expenses xxxxxx

Expenses as per profit and loss account
+ opening stock – closing stock – outstanding expenses ( Closing )

3. Income tax paid xxxxxx
------------------ -------------
Net cash flow of operating activity xxxxxx ↓ xxxxxxx
--------------

B- Category
Cash flow of investing activity
Inflow of cash
1. Sale of fixed assets xxxxx
2. Sale of share and debentures of other company xxxx
3. Interest received xxxxx
4. Dividend received xxxxx

Less Outflow of cash
1 purchase of fixed assets
2 Invest cash in shares and debentures
----------- ---------

Net cash flow of investing activity xxxxxx ↓ xxxxx
-----------

c- Category
Cash flow of financing activity
Inflow of cash
1. issue of shares
2. Issue of debentures
3. Issue of long term borrowings
Less outflow of cash
1. Repayment of pref. shares
2. Repayment / redemption of debentures
3. Repayment of long term borrowings
4. Interest paid
5. Dividend paid

Net cash flow of financing activity xxxxxxx xxx

Calculate total cash flow from all category
(A+B+C) xxxx

Add opening balance of cash book +xxxx
____________

Balance = Closing balance of cash book xxxxxxxxx

2nd Method of making cash flow statement – Indirect method
This second method of making cash flow statement is called indirect method. Under this method we divide full cash flow statement in to three categories one is cash flow of operating activity and second is cash flow of investing activity and third is cash flow of financing activity. Calculation of cash from operating system is old and we make all adjustments do in profit and loss account’s net profit so that we calculate the net cash profit or loss from operational activity. This is also called net cash flow from operating activity. This will be the A category of cash flow statement. B and C category as same as the first method.
Cash flow statement of Company (based on two year balance sheet)
According to AS-3(revised – Indirect method)

Particular Amount ( In RS.) ↓ Amount (In RS.)
A-category
Cash flow of operating activity
1st Point
Net Profit before taxation and extraordinary
Items (+) xxxxx

2nd Point
Add for non cash and non operating expenses
And losses (+) xxxxx
1. Depreciation
2. Preliminary expenses written off
3. Discount on issue of shares and deb. w/o
4. Goodwill written off
5. Patent and trade marks written off
6. Interest on borrowing and deb.
7. Loss on sale of fixed assets
______________
Xxxxxxxx

3rd Point
Less non –cash and non operating incomes (-)xxxxx
1. Dividend income(For non financial co.)
2. Rental income
3. Profit on sale of fixed asset

_________________
4th point ( Ist point +2nd Point -3rd Point ) xxxxxxxxxx

Adjustment of working capital changes
5th point
Add Decrease in current assets and increase in
Current liabilities (+) xxxxxxxxx
1. Decrease in stock
2. Decrease in debtors
3. Decrease in accrued income
4. Decrease in prepaid expenses
5. Increase in creditors
6. Increase in bill payables
7. increase in outstanding expenses
8. Increase in advance incomes
9. Increase in provision for doubtfull debts
____________________
Xxxxxxxxxx
6th Point
Less increase in current assets and decrease in (-) xxxxxx

Current liabilities
1. Increase in stock
2. Increase in debtors
3. increase in accrued incomes
4. increase in prepaid expenses
5. decrease in creditors
6. Decrease in bill payables
7. decrease in outstanding expenses
8. decrease in advance incomes
9. Decrease in provision for d/d

____________________
7th point Total cash flow from operation xxxxxxxxx

8th point
Less Income tax paid (-) xxxxxxxxx

------------------ -------------
Net cash flow of operating activity xxxxxx ↓ xxxxxxx
--------------

C- Category
Cash flow of investing activity
Inflow of cash
5. Sale of fixed assets xxxxx
6. Sale of share and debentures of other company xxxx
7. Interest received xxxxx
8. Dividend received xxxxx

Less Outflow of cash
3 purchase of fixed assets
4 Invest cash in shares and debentures
----------- ---------

Net cash flow of investing activity xxxxxx ↓ xxxxx
-----------

c- Category
Cash flow of financing activity
Inflow of cash
4. issue of shares
5. Issue of debentures
6. Issue of long term borrowings
Less outflow of cash
6. Repayment of pref. shares
7. Repayment / redemption of debentures
8. Repayment of long term borrowings
9. Interest paid
10. Dividend paid

Net cash flow of financing activity xxxxxxx xxx

Calculate total cash flow from all category
(A+B+C) xxxx

Add opening balance of cash book +xxxx
____________

Balance = Closing balance of cash book xxxxxxxxx

Money market and its structure

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Definition of money market
Money market is the centre of dealing in short term monetary assets like bill of exchange, short term govt. securities and other short term loans. The main dealers of money markets are the banks and financial institutions. They get and give loan or purchase and sell short terms bill in this market . This is not fix place but this system in which they deal with each other.
Composition and Structure of Money market
Structure means support on the basis body will stand. So there are following components which support the whole money market.
In the structure of money market, there are two components are included
1st Composition or component – Financial institution
There are two parts of financial institution in money market:-
a) organized sector

In this sector there following dealer who deal short term loans in money market.
I) RBI :-

RBI means reserve bank of India. This is central bank of India. It is issue short term loan when any bank has any need of short term money.
II) Commercial Banks:-
In commercial banks, there are SBI , Nationalize bank , rural banks , private banks which deals in short term loans with each other , one bank can take or give short term loan to each other when they need or extra money , they want to invest in short term govt. security.
III) Co-operative banks:-
The co-operative banks are also take part in money market. In the top dealer in this market is state cooperative bank. In the district level central cooperative bank do dealing in short term loan.
b) Unorganized Sector
In this sector indigenous banks, money lenders deals with each other or with organized sector.
2nd Composition or component – Financial Instruments or papers
1 ) Call money market
Call money market is the market which deals in short term loans. This loan can be given for one hour to one or two days .This call loans is given without any security. The borrower or loan taker will repay the loan at call. So this loan is also called call loan in this market. The rate of this loan is very high.
II) Treasury bill Market
Treasury bills are the bill which is issued by central govt. This bill is sold by RBI on the behalf of Govt. There is dealing of treasury bills in treasury bill market. The main dealer of T.B are the UTI & LIC . This is 90 loan acceptance bill . This bill can be discounted from any other bank.
III) Commercial bill market
a) Promissory Notes: - In this bill, the loan taker give the promise to pay certain amount after certain period.
b) Bill of exchange
Under this bill firms can sell the good. In this bill loan giver order that his amount must be give to him or his ordered person after certain period. This bill can also discounted from bank.

What can do the MBA student

2008-09-27T10:22:00.000-07:00

dear friend ,
It is not proper question of my title , actually the proper question is that what can not do the MBA students . There is no field in whole where MBA student's value is equal to nil. It means , A MBA student can do every work in whole work . He is doing the administration of agriculture sector , industrial sector , service sector . He can prove that it is the needed that he will be in any type of business , manufacturing , wholesale now also in retailing because now some of institute start MBA in retailing sector .
Why ?
you are not making your career in the field of MBA .
There are following reasons for choosing this sector .

Security of placement
Best professional education
Best for decision in the field of management
MBA can do every work in critical situation
Whole / Global business is becoming the lover of MBA

Then why are you waiting for any other career .

Join MBA for best professional career .

Best of luck

from Vinod Kumar

( for any consultation related to your MBA career email vinod_13242002@yahoo.com )

elements of cost

2008-08-17T06:41:00.000-07:00

Q:- What are main elements of cost ?
Ans.
1. Direct materials
Material which are present in the finished product or can be identified in the product are called direct materials. For example , cloth in dress making , materials purchased for a specific job etc.
2. Direct labour

Labour which can be identified or attributed wholly to a particular job , product or process or expended in converting raw materials into finished products is called direct labour . For example , labour engaged on the actual production of the product or in carrying out the necessary operation for converting the raw materials into finished product .
3. Direct expenses
It includes all expenses other than direct material or direct labour which are specially incurred for a particular product or process .

4. Indirect material

Material which do not normally form part of the finished product are known as indirect materials .
5. Indirect labour
Labour cost which can not be allocated but can be apportioned to or absorbed by cost units or cost centres is known as indirect labour .
6. Indirect Expenses

Expenses other than direct expenses are known as indirect expenses . Factory rent and rates , insurance of plant and machinery , power , light , heating , repairing , telephone etc.

responsibility centre

2008-08-17T06:39:00.000-07:00

Definition of responsibility centre
It is defined as an activity centre of a business organization entrusted with a special task . Under modern budgeting and control , financial executive tend to develop responsibility centres for the purpose of control . Responsibility centres can broadly be classified into three categories . They are
Cost centre
Profit centre
Investment centre

essentials of a good cost accounting system

2008-08-17T06:38:00.000-07:00

Q:- What are essentials of a good cost accounting system ?
Ans :-
Cost accounting system should possess are as follows :
(i) Cost accounting system should be tailor made , practical , simple and capable of meeting the requirement of a business concern .
(ii) The data to be used by the cost accounting system should be accurate , otherwise it may distort the output of the system .
(iii) Necessary cooperation and participation of executive from various departments of the concern is essential for developing a good system of cost accounting .
(iv) The cost of installing and operating the system should justify the result
(v) The system of costing should not sacrifice the utility by introducing meticulous and unnecessary details.
(vi) A carefully phased programme should be prepared by using network analysis for the introduction of the system .
(vii) Management should have a faith in the costing system and should also provide a helping hand for its development and success .

objective of cost accounting

2008-08-17T06:37:00.000-07:00

Q :-What are main objective of cost accounting ?

Ans. The main objectives of cost accounting are as follows

(i) Ascertainment of cost
(ii) Determination of selling price .
(iii) Cost control and cost reduction
(iv) Ascertaining the profit of each activity
(v) Assisting management in decision making

costing ,cost accounting and cost accountancy

2008-08-17T06:34:00.000-07:00

Q:- What is the Definition of costing ?
Ans. :- Costing as the technique and process of ascertaining of costs .

Q:- What is cost accounting and cost accountancy ?

Ans :- Cost accounting is defined as the process of accounting for which cost which begins with the recording of income and expenditure or the bases on which they are calculated and ends with the preparation of periodical statements and reports for ascertaining and controlling costs .

Cost accountancy

Cost accountancy has been defined as the application of costing and cost accounting principles, methods, and techniques to the science, art and practice of cost control and the ascertainment of profitability. It includes the presentation of information derived there from for the purpose of managerial decision making.

methods of capital budgeting

2008-08-03T05:45:00.000-07:00

Methods of capital budgeting

Traditional method
I. Pay back period method ;-

Under this method a project is evaluated on the basis of pay back period of the project .
The pay back period is the period during which the capital outlay cost of investment is covered from the expected profitability of the project to determine the pay back period
The following steps are to be taken :-
Take initial capital outlay of project
Take the estimated profitability of the project
The profits should be before depreciation but after tax
The pay back period will be calculated as
If the annual cash inflows are equal

= cost of project / annual cash inflows (before dep. And after tax )

ii If the annual cash inflow are not equal

Add the annual cash inflows till the cost of project is recovered

II Rate of return per unit of investment method:-
In This method the rate of return is calculated on the basis of total expected profit after dep. And tax and net investment of project

= Total profit ( After depreciation and tax ) / net investment X 100
III Rate of return on investment
Under this method the rate of return is calculated on the basis of total expected profit from the project and average cost of investment
= total profit ( after depreciation and tax ) /average investment X100
Average investment =total investment /2
Discounted cash flow technique or time adjusted technique

I Net present value method of cash inflows
Calculate net present value as NPV= present value of cash inflows – present value of cash outflows

If this is only one project then if it is positive of net present value then the project will be accepted and if it is negative the project will be rejected
If there are many projects then only higher net present value’s project will be accepted
Profitability index method

The profitability index is the relationship of present value of cash inflows and outflows . In facts it is a comparison of benefits and cost of projects that is why this method is known as benefit cost method and the profitability index calculate the profitability of a project the following steps are to be taken
take the initial capital outlay or cost of investment
Take the annual cash inflows expected profitability before depreciation and after tax
Calculate present value with the determine discount rate and pvf and total cash inflows
Net present profitability index (P.I.)
= present value of cash inflows / present value of cash outflows

Or
= net present value/ present value of cash outflows
Internal rate of return method

Internal rate of return is calculation of interest or discount rate or cut off rate which the investment is expected . It is rate which equates the present value of cash inflows and present value of cash outflows
Other words , it is rate where the net present value is zero or near the zero . It is calculated by following way
when the annual cash inflows are equal in such case take cost of project and expect annual profit before depreciation and after tax . The cost of project is divided by the annual profitability and then calculate number
in other it is pay back period trace the value calculated on the present value table on life of project .The rate under which this value falls is the internal rate of return
when a case to calculate the internal rate of return the following steps to be taken

i) Take the cost of project
ii) Take the expect annual cash inflows before dep and after tax
iii) Assume any discount rate and calculate the present values of cash inflows and cash outflows and calculated net present value
iv) If the npv is in positive then assume a higher rate go on assuming higher rates till the npv becomes negative .
v) To determine the internal rate of return apply following formula
vi) IRR = lower rate + [NPV of lower rate / PV of lower rate – PV of higher rate ] X ( higher rate – lower rate )
vii) To accept the project if calculated internal rate of return is more than the standard rate then project will be accepted . but if project are mutually exclusive then project with higher internal rate of return will be accepted

main kinds of capital investment decisions

2008-08-03T05:00:00.000-07:00

1. Accept and reject decisions
2. Mutually exclusive projects decisions
3. Capital Rationing
When a concern have limited capital . Then company gives ranking for purchasing any capital asset .

process of capital budgeting

2008-08-03T04:59:00.000-07:00

Q:- What is process of capital budgeting

Ans:- Steps involved in capital budgeting

1. Identification of capital investment proposals
2. Screening the proposal or verify
3. Evaluation of various proposals
4. Fixing the priorities
5. Final approval and planning the capital expenditure
6. Implementing the proposal
7. Performance review

importance of capital budgeting

2008-08-03T04:58:00.000-07:00

Q:- What is need or importance of capital budgeting ?

Ans :-
1. Large investment
2. long term commitment of fund
3. irreversible in nature
4. long term effect on profitability
5. Difficulties of capital investment decisions

capital budgeting

2008-08-03T04:57:00.000-07:00

Q:- What is capital budgeting

Ans :- Definition of capital budgeting :-

Capital budgeting is process of making ling term investments benefit which is to be taken over a number of years in future .Capital budgeting is long term planning for making and financial proposed capital out laying .
Capital budgeting is concerned with allocation of the firms financial resource among the available market opportunities .The consideration of investment opportunities involves the compression of expected future streams of earning from a project with a immigrate of expenditure for it .

SEBI And Govt. Guidelines for issue of bonus shares

2008-07-08T04:36:00.000-07:00

Q:- What are main SEBI And Govt. Guidelines for issue of bonus shares ?

Ans. There are the following main guidelines for issue of bonus shares :-

Provision in article of association
Maximum amount calculate after apply following test

i) Residual reserve test

ii) Profitability test

iii) Maximum limit test

3. Source of bonus shares

4.Bonus in liew dividend is not allowed

5. Accounting treatment

6.Increase in authorised capital

7.Certificate of compliance

8.Reserve from revaluation of assets not use for bonus shares .

MBA Fields

2008-07-07T21:47:00.000-07:00

1.Finance Management

In the world of financial market , MBA fiance are getting so reputed position . They make different plans relating to optional resources for business. The demand of finance manager are also increasing day by day.

2. Banking

If your interest is in the flow of money and its market , economy or financial matter . Then banking management is better option for you . In this field you not only think about the benefit and saving of your customers but also you can change economy through your financial plans .

3. International Business

IB is the field for MBA who has chosen the specialization in IB . If you have to develop business relation at international level , the IB management is good only for you .

4. Human Resource Development

HR - management identifies the capacity of their employees and if you want to take all responsibility of HR , you can make specialization in it .

5. Operation Management

If it is general view that some people are interested to solve other persons' problem , they solve every type problem . For such people , Operation management is good field .

6. Marketing Management

Marketing field is for those who are interested to sell and talk others for promoting sale .If you have special quality of marketing , then you take decision for specialization in it .

7. Production Management

In production management field two points are so important

Quality of product

Design of product

and these are the challenge for product manager.

8. Advertising Management

If you have special quality to summarize product detail in to one or two words or one picture , then advertising field is more suitable for your specialization.

9. Chain Management

Chain management is base of supply management of any industry . Look out the accounts of production , co-ordination of supply and retails are main part of this management . If you have capability to accept the challenge of this field , the chain management is good field of specialization in MBA .

10 Environment Management

We have only single earth to live on it . Due to increasing population and pollution and development of cities , people wants to protect their environment . A large number of international NGO needs MBA in environment specialization.

See Also

Basic Knowledge of MBA Career

2008-07-06T08:45:00.000-07:00

MBA Career tips means all tips which can be benefited for MBA Scholars when they are doing their manager jobs or when do their professional administrations . In these tips also includes that main point with these , MBA students can develop their career with new way . Some of these tips includes all basic pin- point which need for any career of any field . But some tips are only for MBA career specially . Every MBA scholar must know about these tips . I am giving the following tips for MBA career . I hope you will read it deeply , heartily and truly and act upon to shape advance design for your MBA career . Ist tip- Basic Knowledge of MBA background →→ Any MBA Scholar must know the basic background of MBA . Because often this question can be put at the time of interview . I try to give following question's answer
Q:-1 When , MBA course started ?
Answer : MBA course started in 19th century after industrialized .
Q:-2. What is the first university of Management ?
Answer : The first university of management was Wharton School of the University of Pennsylvania, established in 1881 .
Q:- 3. When first degree of MBA awarded and by which country and by which university ?
Answer : In 1950 the first MBA degrees were awarded by the University of Western Ontario in Canada
Q:- 4 What are main programme in MBA ?
Answer :
Two year MBA
Accelerated MBA
Part-time MBA
Executive MBA (EMBA)
Distance learning MBA
Dual MBA programs
Q:-5 What is Admissions criteria for MBA ?
Answer: Graduate Management Admission Test (GMAT),
Q:-6 What are main subjects of MBA ?
Answer :
economics,
organizational behavior,
marketing,
accounting,
finance,
strategy,
operations management,
international business,
information technology management,
supply chain management, and
project managementQ:-7 What are main Specialization area in MBA ? Answer :
MBA -accounting, Finance
MBA - corporate strategy
MBA - decision sciences ,property management, entrepreneurship, general management,
MBA - human resources,
MBA -international business, marketing, information systems
Q:- 8 When did MBA start in Europe ?
Answer : In 1957, INSEAD became the first European university offering the MBA degree .
Q:- 9 What are the number of Indian business school which is giving MBA education ?
Answer: 1600 business schools
Q:-10. What is the oldest business school in India for offering MBA degree ?
Answer : Indian Institutes of Management (IIM)
2nd tip- Interest in Management →→
If you are interested in management and administration , then this is the best career for you . Because for every manager , it is precondition . You must see every business activity as the part of management . If you can manage your home or personal activity . That is very good but for managing whole organisation or company , you have to get more skills . But , it is very good for you if you want that every work should be done with systematically and scientifically because managers approach only came after this thinking . In your career you will see different senior manager who can do every work with their predecided shedules , their plans and their way of organisation are strong . They can decide every thing but after thinking each factor of that thing . Other General Tips of MBA career
To cover and to earn by becoming MBA - Finance
MBA - Finance Education Updates
MBA - Career as a Challenge
25 tips for MBA Career
Increasing Craze of MBA

Cost of Capital

2008-07-03T08:52:00.000-07:00

Q:- What is cost of capital ?

Ans. The cost of capital is that minimum rate of return which a firm must earn or expected to earn on its investment so as to maintain the market value of its shares .
The cost of capital may be defined as rate of return which a firm requires from investment in order to increase the value of the firm in the market place .
Concept of cost of capital has been classified into three aspects

Cost of capital is not as such , it means the cost of capital is relating to the rate of return which a firm requires to earn from its projects .
It is the minimum rate of return
Rate of return due to risk the increase in rate of return is required due to business risk and financial risk.

Zero level risk
Business risk
Financial risk

Ratio Analysis

2008-06-22T23:28:00.000-07:00

Q:- What is meaning of ratio analysis ? What is the procedure of establishing the ratios ?

Ans. Definitions of Ratio and its analysis :-
It is an important technique for analyzing the financial statement . In this method we establish various ratios and give the results through interpretation .The relation in the ratio of items of f/s .
A ratio is simply a relationship of two items which are express in arithmetic number . It is arithmetical expression of relationship of one number to another .It may be indicated quotation of two mathematical expression .
According to Accountant hand books of wixen , kell and bed ford .
“ A ratio is an expression of the quantitative relationship between two numbers .”
“ A ratio is relationship of two out of item A to another item B . It is a simple fraction , integer or decimal or percentage .
In simple words ,” Ratio means one number expressed in terms of another and can be calculated by dividing one number into another .

Procedure

The following is the procedure for interpreting the result of financial analysis through ratio analysis .
1 Take the ratio to be calculate
2. Selection of item for the purpose of ratio from the financial statement
3. Calculation of Ratio
4. Comparison of calculated ratio
5. Interpretation of ratios

management accounting and its importance

2008-06-22T23:24:00.000-07:00

Q:- What is management accounting .What are the scope , nature , function & importance and limitation of management accounting .?

Ans . Management accounting is an art of work done through other and accounting is art of recording , classification and summarising the business transaction .

1 According to me ,” Management accounting is concept with accounting information that is useful to management .”

Characteristics /function /use/ objects /Importance

Proper planning through providing accounting information
Controlling through cause and effect analysis
Use of special techniques and concepts
Taking some important decisions
provide information
Helpful in organizing
increasing efficiency
helpful in communication
helpful in co-ordination
helpful in forecasting

kaizen costing

2008-06-07T08:27:00.000-07:00

Q:-Define kaizen costing ?

Ans :-Kaizen costing is combination of two words kaizen and costing . Kaizzen here means continous improvement . This is Japanese word . So kaizen costing is a system in which we try to reduce cost when we are in production stage . In kaizen costing we can taken following steps to reduce cost
More motivation employees
To minimize the waste
to improve the efficiency of machine

Q:- Define activity based costing (ABC) give its procedure
Ans Activity based costing is that method costing in which we calculate total cost on basis of different activities .
Steps taken in Abc
1.Identification of main activities
First of all we identify all activities of our production and sale department
Ist Activity To run machine
2nd Activity To produce finished product
3rd activity To sale the finished product
2. Identify the main cost drive :-
Cost driver may be no of units , no. of hours , no. of workers .
Creation of cost center

Cost center may be machine man or place who is responsible for cost .

Sale price Variance

2008-06-06T21:07:00.000-07:00

Q:-9 How can you calculate sale price variance ?
Ans:- Management besides reviewing all the expenditure variance also take great care to investigate any variances in sales revenue.
This is because any variances in sales revenue has a direct impact upon the contribution and profitability of the business.
In a marginal cost system, the variances are calculated in contribution terms whereas:
In an absorption costing system, the sales variances are determined in terms of profit.
The TOTAL Sales Variance are segregated into the following two(2) variances:
Sales PRICE Variance
Measures the effect of the difference between the standard selling price per unit and the actual selling price.
Formula:
[Standard selling price per unit-Actual selling price per unit] x Actual quantity of units sold
Sales VOLUME Variance
· Measure the effect on contribution or profit of the divergence between actual sales and the budgeted level of sales.
· In a marginal costing system the difference between the actual and budgeted sales is multiplied by the standard contribution per unit.
· In an absorption system this difference is multiplied by the standard profit per unit.
· Formula:
[ Budgeted Sales level-Actual Sales level]x Standard Contribution or profit per unit
Illustration:
Company A budgeted sales are 3,500 Product A per month at a standard price of $70 each against their unit cost of $35. At the end of the third month, the actual sales revenue was $780,000 and 12,000 Product A had been sold.
Further details:
Volume Unit selling price Profit per unit
Budget 10,500 70 35
Actual 12,000 65 30
Required:
Compute:
(a) the sales VOLUME profit variance;
(b) the sales PRICE variance.
Solution:
(a) The Sales VOLUME variance is:
[Actual units sold-budgeted units sold]x Standard profit per unit
=(12,000-10,500]x$35
=$52,500F
(b) The Sales PRICE variance is:
[Actual selling price-budgeted selling price]x actual sales volume
=[$65-$70] x 12,000
=$60,000A
To recheck:
Total PROFIT Variance= Sales Price Variance + Sales Volume Variance
Budgeted profit
=10,500 x $35=$367,500
Less:
Actual profit
=12,000 x $30=$360,000
Total PROFIT variance=$367,500-$360,000= $7,500A
From solution a & b:
Sales VOLUME variance($52,500F) +Sales PRICE variance($60,000A)= $7,500A

What is the use of Standard costing

2008-06-06T20:58:00.000-07:00

Q:- What is the use of Standard costing ?

Ans. Reasons for using a Standard Costing System:
There are several reasons for using a standard costing system:

Cost Control: The most frequent reason cited by companies for using standard costing systems is cost control. One might initially think that standard costing provides less information than actual costing, because a standard costing system tracks inventory using budgeted amounts that were known before the first day of the period, and fails to incorporate valuable information about how actual costs have differed from budget during the period. However, this reasoning is not correct, because actual costs are tracked by the accounting system in journal entries to accrue liabilities for the purchase of materials and the payment of labor, entries to record accumulated depreciation, and entries to record other costs related to production. Hence, a standard costing system records both budgeted amounts (via debits to work-in-process, finished goods, and cost-of-goods-sold) and actual costs incurred. The difference between these budgeted amounts and actual amounts provides important information about cost control. This information could be available to a company that uses an actual costing system or a normal costing system, but the analysis would not be an integral part of the general ledger system. Rather, it might be done, for example, on a spreadsheet program on a personal computer. The advantage of a standard costing system is that the general ledger system itself tracks the information necessary to provide detailed performance reports showing cost variances.

Smooth out short-term fluctuations in direct costs: Similar to the reasons given in the previous chapter for using normal costing to average the overhead rate over time, there are reasons to average direct costs. For example, if an apparel manufacturer purchases denim fabric from different textile mills at slightly different prices, should these differences be tracked through finished goods inventory and into cost-of-goods-sold? In other words, should the accounting system track the fact that jeans production on Tuesday cost a few cents more per unit than production on Wednesday, because the fabric used on Tuesday came from a different mill, and the negotiated fabric price with that mill was slightly higher? Many companies prefer to average out these small differences in direct costs.

When actual overhead rates are used, production volume of each product affects the reported costs of all other products: This reason, which was discussed in the previous chapter on normal costing, represents an advantage of standard costing over actual costing, but does not represent an advantage of standard costing over normal costing.

Costing systems that use budgeted data are economical: Accounting systems should satisfy a cost-benefit test: more sophisticated accounting systems are more costly to design, implement and operate. If the alternative to a standard costing system is an actual costing system that tracks actual costs in a more timely (and more expensive) manner, then management should assess whether the improvement in the quality of the decisions that will be made using that information is worth the additional cost. In many cases, standard costing systems provide highly reliable information, and the additional cost of operating an actual costing system is not warranted.

Summary of Actual Costing, Normal Costing and Standard Costing:
The following table summarizes and compares three commonly-used costing systems.

Actual Costing System

Normal Costing System

Standard Costing System

Direct Costs:

(Actual prices or rates x actual quantity of inputs per output) x actual outputs

(Actual prices or rates x actual quantity of inputs per output) x actual outputs

(Budgeted prices or rates x standard inputs allowed for each output) x actual outputs

Overhead Costs:

Actual overhead rates x actual quantity of the allocation base incurred.

Budgeted overhead rates x actual quantity of the allocation base incurred.

Budgeted overhead rates x (standard inputs allowed for actual outputs achieved)

The following points are worth noting:

1. All three costing systems record the cost of inventory based on actual output units produced. The static budget level of production does not appear anywhere in this table.

2. Actual costing and normal costing are identical with respect to how direct costs are treated.

3. With respect to overhead costs, actual costing and normal costing use different overhead rates, but both costing systems multiply the overhead rate by the same amount: the actual quantity of the allocation base incurred.

4. Normal costing and standard costing use the same overhead rate.

5. Standard costing records the cost of inventory using a flexible budget concept: the inputs “that should have been used” for the output achieved.

There are costing systems other than these three. For example, some service sector companies apply direct costs using budgeted prices multiplied by actual quantities of inputs. For example, many accounting firms track professional labor costs using budgeted professional staff hourly rates multiplied by actual staff time incurred on each job.

What is standard costing

2008-06-06T20:54:00.000-07:00

Q:-What is standard costing?

Ans Introduction to Standard Costing
Standard costing is an important subtopic of cost accountng. Standard costs are usually associated with a manufacturing company's costs of direct material, direct labor, and manufacturing overhead.
Rather than assigning the actual costs of direct material, direct labor, and manufacturing overhead to a product, many manufacturers assign the expected or standard cost. This means that a manufacturer's inventories and cost of goods sold will begin with amounts reflecting the standard costs, not the actual costs, of a product. Manufacturers, of course, still have to pay the actual costs. As a result there are almost always differences between the actual costs and the standard costs, and those differences are known as variances.
Standard costing and the related variances is a valuable management tool. If a variance arises, management becomes aware that manufacturing costs have differed from the standard (planned, expected) costs.
If actual costs are greater than standard costs the variance is unfavorable. An unfavorable variance tells management that if everything else stays constant the company's actual profit will be less than planned.
If actual costs are less than standard costs the variance is favorable. A favorable variance tells management that if everything else stays constant the actual profit will likely exceed the planned profit.
The sooner that the accounting system reports a variance, the sooner that management can direct its attention to the difference from the planned amounts.
If we assume that a company uses the perpetual inventory system and that it carries all of its inventory accounts at standard cost (including Direct Materials Inventory or Stores), then the standard cost of a finished product is the sum of the standard costs of the inputs:
1. Direct material 2. Direct labor 3. Manufacturing overhead a. Variable manufacturing overhead b. Fixed manufacturing overhead

Standard costing

2008-06-06T20:30:00.000-07:00

Q:- 7 Defined standard cost and standard costing? Preliminaries to the establishment of standard costing ?

Ans . Definition of standard cost

Standard costing is the predetermined cost based on the technical estimation of material , labours and overheads for a selected period and working condition.

Definition of standard costing

standard costing is the technique of costing in which we calculate standard cost and identify the variation from standard cost and analysing the causes of variations .

Preliminaries to establishment of standard costing / steps

Ist step

1Make standard cost center .

standard cost center may be machine , a man or place who is responsible for cost. First of all , we must establish cost centre before calculating standard cost.

2nd step

determination any type of standard

i) short term standard

It may use for calculating the standard cost of current asset .

ii) Medium term / normal standard

it may use for 5 years

iii) basic / long term standard

It may use 15 to 20 years standard cost .

3rd step

3 Setting of standard

a) standard cost of direct material

i) For Quantity

ii) for rate

B) standard cost of direct labour

When we set the standard cost of direct labour , we must kept following point in our mind .

i) No. of workers

ii)Standard hour rate for per worker

iii)standard hours

c) Standard cost of overheads or indirect expenses

When we set the standard cost of indirect expenses , we must kept following point in mind

i)standard rate

ii)standard category of respective expenses.

You can determine any type under any situation

Marginal Costing

2008-05-31T23:19:00.000-07:00

Q:- 2 Define marginal cost and marginal costing ? How are veriable cost and fixed cost treated in marginal costing ?
Ans. Define Marginal Cost :-
Marginal cost is change in total cost due to increase or decrease one unit or output.
Marginal costing
Marginal costing is technique to show the effect on net profit if we classified total cost in verible cost and fixed cost .
Explaination or steps in marginal costing
Ist step
Calculation of marginal cost
Second step
Cost volume profit or break even point
Marginal cost equation
Here is veriable cost is marginal cost .
Sale = verible cost +fixed expenses +or_ profit/loss

S=V+F+_P/L

S-V=F+_P/L

Or

Sale –Verible cost =Contribution

*
Break even point analysis
Or cost volume profit analysis
Break even point is a point where total cost is equal to total sale price . In cost volume profit analysis , we establish relation of cost , volume of output and profit , we can show it with break even point chart
Mathematical formula use in study of cost volume profit analysis
1. Contribution
2. Contribution /Sale or C/S or P/V Ratio
3. Break –even point
4. Margin of safety

1. Contribution
Contribution is difference between sale and marginal cost
Contribution= Selling Price –Marginal cost/verible cost

Or
Contribution = Fixed expenses+profit
Or
Contribution – fixed expenses = Profit
2. Profit valume
Or p/v ratio= Contribution / sale =C/S
Or
p/v Ratio= fixed expenses +profit / sale =F+P/ S

or

P/V ratio = Sale – verible cost /sale = S- V/ S
3. a) Break even point ( in rs. ) = Fixed cost / P/V ratio
= F/P/V ratio
b) verible cost = sale ( 1- p/v ratio)
c) profit = ( sale X p/v ratio) – Fixed cost
d) fixed cost =( sale Xp/v ratio) – profit
e) marginal of safety = profit /p/v ratio
f) break even point ( in unit )
= total fixed expenses/ selling price unit - marginal cost per unit
g) for break even point equation

sale = cost

sale = fixed cost + verible cost
sale – verible cost = fixed cost
or
s – v = F
or
1X (S-V) = F
1= F/S-V

Break even point in break even chart

Budgetary Control

2008-05-31T22:49:00.000-07:00

Q:- Define Budget, budgeting, budgetary control. Difference between budget and forecast. What is the main type of budget? How can you make a good budget or essential of good budget and budgetary control? What are advantages or objective merits and limitation of budgetary control?

Ans. Definition of budget

Budget is financial or quantitative statement. This statement shows the programs of future operation and expected result. It is made before work to be done.

Definition of budgeting

The process of applying of budget on different department is called budgeting.

Definition of budgetary control

Budget control is that type of control in which controller compares actual result with budget data and identify the difference and correcting the cause of difference.

Difference between budget and forecast

1. Definition

The quantitative form of planning is budget.

Forecast is just estimation of happening any event in future .

· Essential , Requisites of successful budgetary control .:-

1. Budgetary control must be objective :-

Budgetary control mean essential is to make budget on the basis of objective . First of all we should identify our objective then it convert ed in quantitative form without well defined object we can not control the organization through budgetary control control .

2. Budgetary control must be flexible:-

This is the essential point of budgetary control. In budgetary control, we should make budget flexible.
According to changes, we change our budget.

3. Budgetary control must be through top management

For successful budgetary control, it is necessary that budget must be made by top management not middle management level

Main type of budget

A ) On the basis area coverage

i) Sale budget

Sale budget is made by sale manager. This is sale department’s budget. It is just estimation of value of sale. But before making sale budget, sale manager must be kept following point in the mind.
a) Business cycle b) changes seasons c) development of market.

ii) Production budget

Production budget is made by production manager. This is production department budget. This is just estimation of the value of production in form of quantity and amount. Before making production budget, production manager must be kept following point in his mind a) demand of product b) supply of raw material, labour c) closing stock’s quantity.

iii) Personnel budget

Personnel budget is made by personnel manager. This is personnel’s department budget. This is just estimation of following

I) No. of workers

II) No. of working hours

III) Rate per hour

iv) Cash budget /Financial budget

Cash budget or finance budget

This is made by finance accountant. This is finance’s department budget. This is just estimation of reception and payment of cash and bank

v) Capital Expenditure budget

Capital expenditure budget is made by financial accountant. This is made by finance’s department. This is just estimation of capital expenditure.

3. Master Budget

Master budget is theme budget of all functional budgets. Master budget is made for whole organization when all things like sale, purchase, cash, capital expenditure is estimation in one budget. Then this budget is called master budget.

B) On the basis of capacity

i) Fixed budget

fixed budget is just estimation of fixed cost when we change our cost if changing the level of production .

ii) Flexible budget

Flexible budget is just estimation of variable cost when we change our cost if changing the level of production.

C) On the basis of period

i) Long term budget

This is just estimation of capital expenditure and other long term events. This budget is for more than one year.

ii) Short term budget

This budget is for one year only. Sale budget, purchase and cash budget are main example of this budget.

Zero base budgeting (ZBB)

It is come to the existence when ex- president of America Zimi carter use this budget to control state expenses .In this budget, we start from zero cost level. Take last year‘s cost as base year cost .Estimate current year cost on the basis of previous year cost. So this is called zero base budgets.

Explain with example

Suppose we start our business with zero. So every year’s estimation of cost is like first year’s estimation of cost. But last year is our guide. In this budget we decide in advance what to be done.

Q:- Define fund , fund flow and fund flow statement ? What are the uses , significance , utility and limitation of fund flow statement ?

2008-03-24T03:45:00.000-07:00

Ans. Definition of fund

fund simply means availability of cash in daily use

Definition of fund flow

flow of fund is just like circulation of blood . Like circulation of blood , fund flow should come in business and go from business.

flow of fund here means conversation of one asset to be use to purchase of another asset or use to deduction in liabilities .

Definition of fund flow statement

fund flow statement is a statement which shows source and use of fund in particular time. This period may be two years or more years .Basis of making fund flow statement is two years or more than two years balance sheet .

Procedure for preparing fund flow statement

For making fund flow statement , we took three steps

1st step

1 making shedule or statement of change working capital

2nd step

2 making adjusted profit and loss account or statement showing fund from operation or lost in operation

3rd Step

fund flow statement

shedule of changing working capital proforma

particular previous year current year increase working capital decrease in w/c

a b c d

current asst. Rs. 5000 Rs.10000 Rs 5000 ---

current liabilities 4000 5000 1000

Working capital

C.A-C.L. 1000 5000 5000 10000

Net increase in

working capital c-d =5000-1000 =4000

See adjusted profit and loss account in picture of my hand written notes

and see also fund flow statement

Efficiency ratio or activity ratio or current asset movement ratio / turnover ratio

2008-03-11T06:23:00.000-07:00

Efficiency here means power of business man to sold goods quicky ,receive money from debtor quickly , and payment to his creditors as quickly as possible , so efficiency ratio tells us rate of stock turnover , debtor and creditor turnover ratio .

(I) stock turnover ratio

stock turnover ratio is relation ship between stock and sale

stock turnover ratio = cost of goods sold / average inventory at cost

stock turnover ratio = opening stock + purchase +direct expenses divided by opening stock +closing stock/2

stock turnover ratio = sale - gross profit / opening stock +closing stock/2

interpretation

higher ratio tells us good efficiency of business . If there isn't given above information stock or inventory turnover ratio = net sale / inventory

Debtor turnover ratio

debtor turnover ratio is just relationship between credit sale and average receivables

debtor turnover ratio = credit sale / average receivable

3. Analysis of long term solvency position or test of solvency :-

test of long term solvency is test of fixed assets and outside fixed liabilities. If businessman has capicity to pay the interest of long term loan and repay them on maturity . It is called that business is strong or sound in long term . following ratios help in decision of long term solvency problem .

debt quity ratio

this ratio is just relationship between long term outside debt and company shareholder fund .

formula

debt quity ratio = outside debt / shareholder fund

outside debt = debenture +long term debt +mortgage loan +bank loan +current liabilities

shareholder fund = equity share capital +pref. share capital +reserve and surplus +share premium +loss (accumulated)-discount on issue

interpretation

no standard rule but perportion of high shareholder fund is favourable 2

2. debt service or interest coverage ratio

debt service ratio or interest coverage ratio is just relationship of net profit (before tax and interest ) and fixed interest charges . If net profit is more than fixed income it shows our sound long term financial position .

interest coverage ratio = net profit ( before tax and interest )/fixed interest charges

suppose 100000 rupees are loan which is given @ 12% p.a.

I.C.R. = net profit / interest = 60000/12000 = 5 times

3. Fixed asset Ratio :-

Fixed Asset ratio is just relation ship between long term funds and fixed asset

fixed asset ratio = long term fund /fixed assets

f.a.r. = quity share capital +loan / fixed assets

if long term fund is more than fixed assets . it shows our long term soundness .

4. Debt to total fund or solvency ratio

debt total fund ratio = total liabilities / total assets

debt to total fund ratio is relationship between total liabilities and total assets .

5. reserve to capital ratio

reserve to capital ratio is just relationship between reserve and capital . it is calculated when we divided reserve by capital . if answer multiply will 100 . we can receive reserve % on capital .

reserve to capital ratio = reserve and fund divided by capital

interpretation

higher % of reserve shows higher rate of soundness .

6 capital gearing ratio

capital gearing ratio tells us what type of gear you should maintain in business . in starting of business , company should maintain low gear , when company earn high rate of profit , company can increase his growth speed through high gear . it is a time when company can work on high gear . Capital gearing rate is just relationship between equity and fixed cost bearing securities .

capital gearing ratio = equity share capital + reserve fund + other profits / pref. share capital +debenture + long term loan

3. return on investment (r.o.i.) = net profit before interest and tax divided by capital employed and multiply with 100

4. earning per share

= net profit after tax and pref. dividend/ no. of quity shares

for seeing next note , keep in touch with comments

Q:- Define ratio ? Give its importance ? What are main ratio ?

2008-03-08T05:15:00.000-08:00

Ans. Ratio's definition

Ratio is just relationship between two numbers. Ratio is always in percentage form.

"A ratio is an expression of quantitative relationship between two numbers .

Definition of ratio analysis

"ratio analysis is important tool of financial analysis. With the help of ratio , we can easily analyze the profitability , solvency and financial position of any business .

Procedure of calculating ratio

Take the formula of ratio

collect two items from financial statement .

calculation of ratio

comparison of two ratios according to level of time or two different business

interpretation of ratio

Main kinds or type of ratio

liquidity ratio /test of liquidity

test of short term solvency

A (I) current ratio or working capital ratio :-

this ratio is relation ship between current asset and current liabilities . It tells us what is financial position to pay current liabilities .

Current ratio = current assets divided by current liabilities

current asset is cash + bank+marketable securities +sundry debtors +bill receivable +stock +prepaid exp.

current liabilities = sundry creditors +outstanding expenses +bank overdraft +bill payable

rule of thumb or standard rule of bankers=2:1

interpretation

if actual ratio is more than standard ratio . it is called favourable . other wise unfavourable.

B) liquidity ratio or quick ratio

liquidity ratio or quick ratio is relationship between liquid asset and current liabilities

quick ratio = liquid asset divided by current assets

liquid assets = cash +bank + marketable securities + b/r +debtors

current liabilities = same as above

rule of thumb =1:1 favourable

c) absolute quick ratio /cash ratio this ratio shows the relationship between absolute liquid asset and current liabilities

absolute quick ratio = absolute liquid assets divided current liabilities

a.q.r. = cash +bank+marketable securities+short term investment

rule of thumb =1:2 favourable

balance of this question's answer is next time . please Wait

Q:- what are the tools and techniques or system of management accounting ?

2008-03-07T03:14:00.000-08:00

Ans
1. trend analysis
trend analysis is main tool of financial analysis . It is the duty of management accountant to calculate trend percentage and analysis them and interpretate the decision.
in trend analysis first of all all the items changed in percentage form
steps of calculate trend percentage

always base year must be 100
next year's value % = next year value divided By base year value and then multiply with 100
interpretate

explaination

suppose sita taxtile company wants to know his trend of sale ?

she gives us last five year total sale in lakhs of rs.

years and sale trend

2001-2002 1445 100

2002-2003 2001 2001/1445x100=138

2003-2004 3546 3546/1445x100=245

2004-2005 4748 328

2005-2006 5109 353

2.common size statement analysis

common size statement is just conversional /change of actual value of balance sheet and income statement in percentage form and then analysis and take decision

3.Ratio analysis

this will tell you in next class wait

conventions of accounting?

2008-03-07T02:13:00.000-08:00

Ans. conventions are notstrict rules but these are guidlines .

main convention of accounting

convention of disclosure

according to this convention ,''business man show full information in his profit and loss account and balance sheet . He does not misguide by not giving information in his final account . He must disclosure all correct information not only in final account but all statements prepared by him.

2.convention of consistency

according to this convention ,''the rules , regulation , system & method of maintainging accounts must be consistt . it is because , it helps to comparison and result from information.

3. conventionn of conservatism

according to this convention ,'' anticipate all future loss and create reserve for them . but do not provide any estimation for future profit.

4. convention of materiality

convention of materiality is very good convention , it guides us that accountant should record only useful and valuable transaction and event . He must be avoid or ignor all unvaluable or useless transaction or event so that cost of recording will be minimize