If you have chosen the exciting world of stock markets among the career options you have, you'll never regret it. It is your door to fame, fortune and, above all, professional challenge. In a world that is shrinking in size due to information technology and blurring boundaries between nations, the stock market (or the equities market) is all set to grow in size.
A quick overview of the roots
The "company" form of organization changed the way the world did business. The company raised the capital required to do business by issuing financial instruments (or assets) called "equity shares" to the general public. Such a purchase of shares from the company itself is a "primary market" activity. Such a purchase did not tie the investor to the company forever because they could sell these shares in the "secondary market" (or in other words, the stock exchange) unlock their investments.
Purchase of equity shares in the market offered high returns to the investors. Apart from the dividend income that they received, the investors also made capital gains when the share prices shot up due to various reasons. Over and above these financial benefits, equity shares
also gave ownership and control of the company in the same proportion as the number of shares held.
These heavy returns do not come without associated risks. Good amount of subjectivity and ambiguity is involved in finding the true value of an equity share. This renders difficult, the decision regarding proper investment.
The emergence of professional research
Common man could not understand the nuances of stock market and equity valuation. Also, the concept of pooled funds like insurance funds, retirement funds and mutual funds required professional investment management. Consequently, the field of market analysis emerged and gave rise to finance professionals who excelled at valuation of such financial assets. Market analysts (a.k.a research analysts or equity researchers) work for various organizations like:
Investment Banks,Mutual funds,Financial Institutions,Stock Brokers, Financial newspapers, Financial websites.
They can also work as Independent Financial Advisors to the affluent people who need professional expertise for managing their wealth.
As a market analyst one has to use various financial models, tools and techniques to arrive at simple decisions like buying or selling or standing still regarding the particular stock. If the research and analysis show that the stock price of a particular company may rise, you "go long" (buy it). If you have already bought it, you "hold" it. Alternatively, if the research indicates a possible downtrend in the stock price, you would immediately "go short" (sell it) so that you don't incur a loss (or reduced profit) at a later date. When once the decision is taken, there is absolutely no time to spare in implementing it.
The nature of work
Two basic approaches to equity research are the "fundamental analysis" and the "technical analysis." As a Fundamental analyst you would study the various factors that affect the stock prices. The analysis is done in the EIC (Economy-Industry-Company) format. First you study the economic factors like interest rates, inflation, national income, political factors etc. Then you study the particular industry to which the company belongs. It could be steel, cement, information technology, pharmaceuticals etc. Ultimately, the financial and other aspects of the particular company are studied.
As a technical analyst, you will study the price movements of the particular company's stock in the market. Technical analysts strongly believe that the price movements follow a trend and by identifying the trend, one can accurately predict the price that might occur in future. Technical analysts use financial tools with software support. One can be overawed by the terms and studies of a technical analyst when he/she explains the rationale behind the prediction.
General abilities
To become a successful analyst, one has to possess remarkable analytical, logical and interpretative skills; number crunching abilities; creativity in identifying the appropriate factors of study and high presence of mind. One should also be meticulous and hard working with high concentration powers. The work also involves hours of gazing at numbers, graphs and other figures, apart from the narrative information like corporate releases, CEO's talks and other sources of market data.
One should also possess skills to discriminate relevant information from the irrelevant and apply the relevant ones accordingly. Working long hours and an attitude for relentless search is essential. This also calls for high determination and perseverance.
Educational qualifications
To work as a market analyst, you would be required to do an MBA in Finance. Other qualifications include MA in Economics (Ivy League preferred). An ideal option would be to do the CFA (Chartered Financial Analyst) done from the ICFAI (Institute of Chartered Financial Analysts of India). Mathematical abilities and a background in accountancy are significant requirements. All these would come as effective complementary skills to a strong foundation in financial concepts.
As you can expect, the MBAs from the premier league enjoy high demand from the industry. They include the various branches of IIM; XLRI; XIM; Jamnalal Bajaj Institute of Management; NMIMS; FMS; BIM and Symbiosis Institute of Management.
Remuneration and Career Prospects
At the entry level the salary can range from Rs.1 lakah to Rs.5 lakhs per annum, depending upon the organization you are going to work for. It is quite common for the research analysts to get a huge performance linked bonus upon good analysis and research results. In due course, you might be handling funds worth several hundreds of crores of rupees and nominated as an asset manager, fund manager, portfolio manager or simply money manager.
For the more entrepreneurial among you, there is also a scope for starting your own investment advisory services firm or wealth management consultancy for High Networth Individuals. It is not uncommon for senior professionals of this field to earn anywhere between Rs.60 lakhs to Rs.5 crores per annum.
Saturday, October 13, 2007
Tuesday, September 25, 2007
Indian Economy Overview!!!
Some highlights:
- India has the highest number of billionaires in Asia and fourth highest in the world. There are 36 billionaires in India, which makes it next only to US, Russia and Germany.
- India has emerged as the world's fastest growing wealth creator, thanks to a buoyant stock market and higher earnings.
- Forty-four per cent of the Top 100 Fortune 500 companies are present in India.
The number of Indian millionaires rose by 20.5 per cent from 83,000 in 2005 to 1,00,015 in 2006 -- making India the world's second fastest growing nation after Singapore. - India has joined the elite club of 12 countries with a trillion dollar economy, thanks to the continuing rally in rupee against the US dollar.
- According to a study by the McKinsey Global Institute (MGI), India’s consumer market will be the world’s fifth largest (from twelfth) in the world by 2025.
- Mumbai has been ranked tenth among the world's biggest centres of commerce in terms of the financial flow volumes by a survey compiled by MasterCard Worldwide.
- India has emerged as one of the most attractive investment destinations in the world with an annual return of 38.36 per cent, which is the second highest in BRIC economies.
- India ranks second in the Asia-Pacific region in terms of the value of private equity deals (US$ 2,433 million) done in the first half of 2007.
- India emerged as the fastest growing market in the data centre-structured cabling market in the Asia Pacific region.
- India has been ranked second in outbound mergers and acquisition (M&A) deals during the first half of 2007 in the Asia-Pacific region, with outbound deals totalling US$ 13.5 billion.
- India Inc reported its highest net profit in the last three years in 2006-07 (1,700 companies that declared their results till June reported a 47 per cent increase in net profit).
- With its manufacturing and services sector on a searing growth path, India’s economy may soon touch the coveted 10 per cent growth figure.
Monday, September 10, 2007
PRINCIPAL TAXES
The principal taxes are as follows.
1. Taxes on income:
a. Income tax:
b. Agricultural income tax (levied only by states);
c. Interest tax (applicable to banking and financial companies).
2. Taxes on transactions:
a. Local sales tax (levied only by states);
b. Central sales tax;
c. Excise duty;
d. Customs duty;
e. Stamp duty;
f. Gift tax;
g. Expenditure tax.
3. Taxes on property:
a.Wealth tax;
b.Property tax.
Five major types of business tax:
1. Corporate franchise tax
2. Employment tax
3. Excise tax
4. Gross receipt tax
5. VAT
PECULIAR FINANCIAL WORD
Burn Rate-
The rate at which a company is spending its cash reserves.
1. Taxes on income:
a. Income tax:
b. Agricultural income tax (levied only by states);
c. Interest tax (applicable to banking and financial companies).
2. Taxes on transactions:
a. Local sales tax (levied only by states);
b. Central sales tax;
c. Excise duty;
d. Customs duty;
e. Stamp duty;
f. Gift tax;
g. Expenditure tax.
3. Taxes on property:
a.Wealth tax;
b.Property tax.
Five major types of business tax:
1. Corporate franchise tax
2. Employment tax
3. Excise tax
4. Gross receipt tax
5. VAT
PECULIAR FINANCIAL WORD
Burn Rate-
The rate at which a company is spending its cash reserves.
Sunday, September 9, 2007
QUIZ NO 6
1. Firms with high levels of operating leverage are generally considered to be:
a. Less risky.
b. More risky.
c. International firms.
d. Local firms.
2. Depreciation is an example of a:
a. Variable cost.
b. Fixed cost.
c. Controllable cost.
d. Indirect cost of manufacturing plant.
3. Mary quit a job paying $60,000 per year to attend graduate school. The $60,000 is an example of a:
a. Variable cost.
b. Sunk cost.
c. Opportunity cost.
d. Indirect cost.
4. The difference between the book values of assets and liabilities is equal to ……………………………
5. …………………………was the first bank to issue a deep discount bond in India in January 1992.
6. Expand the following:
DIPP………………………………
ADB………………………………
7. Foreign market of United States is called…………………...
Japan called…………………………….
United Kingdom called…………………
Netherland called……………………….
Spain called…………………………….
Answer:1-b, 2-b, 3-c, 4-Share holder's fund or Networth, 5-IDBI, 6-Department of Industrial policy & promotion, Asian development Bank, 7- Yankee, Samurai, Bulldog, Rembrandt, Matador
a. Less risky.
b. More risky.
c. International firms.
d. Local firms.
2. Depreciation is an example of a:
a. Variable cost.
b. Fixed cost.
c. Controllable cost.
d. Indirect cost of manufacturing plant.
3. Mary quit a job paying $60,000 per year to attend graduate school. The $60,000 is an example of a:
a. Variable cost.
b. Sunk cost.
c. Opportunity cost.
d. Indirect cost.
4. The difference between the book values of assets and liabilities is equal to ……………………………
5. …………………………was the first bank to issue a deep discount bond in India in January 1992.
6. Expand the following:
DIPP………………………………
ADB………………………………
7. Foreign market of United States is called…………………...
Japan called…………………………….
United Kingdom called…………………
Netherland called……………………….
Spain called…………………………….
Answer:1-b, 2-b, 3-c, 4-Share holder's fund or Networth, 5-IDBI, 6-Department of Industrial policy & promotion, Asian development Bank, 7- Yankee, Samurai, Bulldog, Rembrandt, Matador
Thursday, August 30, 2007
FINANCIAL TERMS V
Yield
it’s the annual percentage rate of return earned on a security. Yield is a function of a security's purchase price and coupon interest rate.
Yield curve
it shows the relationship between the yields to maturity of securities and their maturities. It is also called as the term structure of interest rates.
Yield to call
a yield on a security calculated by assuming that interest payments will be paid until the call date, when the security will be redeemed at the call price.
Yield to maturity
A yield based on the assumption that the security remains outstanding to maturity. It represents the total of coupon payments until maturity, plus interest on interest, and whatever gain or loss is realized from the security at maturity.
Institutionalization
The shifting of the financial markets from dominance by retail investors to institutional investors.
Contingent Liabilities
Liabilities that may or may not be incurred by a company and which depend on the outcome of say forthcoming events such as a court case. These are recorded in a company’s account as contingent liabilities.
PECULIAR WORD
Asset Play
An investment strategy which seeks to identify companies whose net assets per share are worth significantly more than the current share price – essentially a type of value investing.
it’s the annual percentage rate of return earned on a security. Yield is a function of a security's purchase price and coupon interest rate.
Yield curve
it shows the relationship between the yields to maturity of securities and their maturities. It is also called as the term structure of interest rates.
Yield to call
a yield on a security calculated by assuming that interest payments will be paid until the call date, when the security will be redeemed at the call price.
Yield to maturity
A yield based on the assumption that the security remains outstanding to maturity. It represents the total of coupon payments until maturity, plus interest on interest, and whatever gain or loss is realized from the security at maturity.
Institutionalization
The shifting of the financial markets from dominance by retail investors to institutional investors.
Contingent Liabilities
Liabilities that may or may not be incurred by a company and which depend on the outcome of say forthcoming events such as a court case. These are recorded in a company’s account as contingent liabilities.
PECULIAR WORD
Asset Play
An investment strategy which seeks to identify companies whose net assets per share are worth significantly more than the current share price – essentially a type of value investing.
QUIZ NO 5
1. Name the first Public Sector share quoted on the Bombay Stock Exchange?
…………………………………………………………………….
2. Which is the first foreign company listed on NYSE?
……………………………………………………………………
3. What are the certificates issued by the US depository bank representing the shares of a foreign company?
…………………………………………………………………….
4. First bollywood /Entertainment Company which issued IPO?
…………………………………………………………………….
5. Which company was the first internet company to be listed on the Bombay Stock exchange?
…………………………………………………………………….
6. The first foreign exchange transaction in Euro was between ABN-AMRO and which other bank?
…………………………………………………………………….
7. Which management term is derived from the Greek word which means "Art of the General"?
…………………………………………………………………….
8. CIPLA was set up by Khwaja Abdul Hameed in 1935 in India. Expand CIPLA
…………………………………………………………………….
9. Name the first-ever Indian company to be converted into a bank.
…………………………………………………………………….
Ans:1.HPCL, 2.Sony, 3.ADR, 4.Mukta Arts, 5.Infoedge, 6.SBI, 7.Strategy, 8.Chemical Industrial and Pharmaceutial Laboratories, 9.Kotak Mahindra
…………………………………………………………………….
2. Which is the first foreign company listed on NYSE?
……………………………………………………………………
3. What are the certificates issued by the US depository bank representing the shares of a foreign company?
…………………………………………………………………….
4. First bollywood /Entertainment Company which issued IPO?
…………………………………………………………………….
5. Which company was the first internet company to be listed on the Bombay Stock exchange?
…………………………………………………………………….
6. The first foreign exchange transaction in Euro was between ABN-AMRO and which other bank?
…………………………………………………………………….
7. Which management term is derived from the Greek word which means "Art of the General"?
…………………………………………………………………….
8. CIPLA was set up by Khwaja Abdul Hameed in 1935 in India. Expand CIPLA
…………………………………………………………………….
9. Name the first-ever Indian company to be converted into a bank.
…………………………………………………………………….
Ans:1.HPCL, 2.Sony, 3.ADR, 4.Mukta Arts, 5.Infoedge, 6.SBI, 7.Strategy, 8.Chemical Industrial and Pharmaceutial Laboratories, 9.Kotak Mahindra
Friday, August 17, 2007
FINANCE TERMS IV
CAPITAL EXPENDITURE:
All expenditure which results in the acquisition of permanent assets which are intended to continually use in the business for the purpose of earning revenue is capital expenditure.
All the capital expenditure receipts and payments are taken into balance sheet.
REVENUE EXPENDITURE:
An amount spent for earning or providing revenue is called revenue expenditure.
All the revenue expenditures and receipts are taken to trading and profit & loss account.
DOCK CHARGES:
These charges are levied on ship and their cargo when entering or leaving docks. If dock charges are paid on goods they are taken to the debit side of trading account.
{DOCK: a part of a port where ships are repaired or where goods are put onto or taken off them}
MARSHALLING OF BALANCE SHEET:
The arrangement of items in balance sheet in a proper way is known as marshalling of balance sheet.
They are of two types:
1) Liquidity Order
2) Permanence Order
EXTERNAL RECONSTRUCTION:
When one existing company goes into liquidation and a new company is formed for the purpose of buying its business is known as external reconstruction.
PECULIAR FINANCIAL WORD
USANCE BILLS: The bills drawn and accepted payable after three months is called usance bills.
All expenditure which results in the acquisition of permanent assets which are intended to continually use in the business for the purpose of earning revenue is capital expenditure.
All the capital expenditure receipts and payments are taken into balance sheet.
REVENUE EXPENDITURE:
An amount spent for earning or providing revenue is called revenue expenditure.
All the revenue expenditures and receipts are taken to trading and profit & loss account.
DOCK CHARGES:
These charges are levied on ship and their cargo when entering or leaving docks. If dock charges are paid on goods they are taken to the debit side of trading account.
{DOCK: a part of a port where ships are repaired or where goods are put onto or taken off them}
MARSHALLING OF BALANCE SHEET:
The arrangement of items in balance sheet in a proper way is known as marshalling of balance sheet.
They are of two types:
1) Liquidity Order
2) Permanence Order
EXTERNAL RECONSTRUCTION:
When one existing company goes into liquidation and a new company is formed for the purpose of buying its business is known as external reconstruction.
PECULIAR FINANCIAL WORD
USANCE BILLS: The bills drawn and accepted payable after three months is called usance bills.
QUIZ No. 4
1. …………ratios measure the firm’s ability to meet current obligations. (Activity, Liquidity, Profitability, Leverage)
2. …………ratios show the proportions of debt and equity in financing the firm’s assets. (Activity, Liquidity, Profitability, Leverage)
3. …………ratios reflect the firm’s efficiency in utilizing its assets. (Activity, Liquidity, Profitability, Leverage)
4. …………ratios measure overall performance and effectiveness of the firm. (Activity, Liquidity, Profitability, Leverage)
5. Expand following:
WDM………………………………………..
SRO...………………………………………..
FIPB…………………………………………
AMC………………………………………...
FCAC……………………………………….
6. Which is India’s first credit rating agency set up jointly by LIC, GIC, UTI, ICICI and Asian development bank in Jan 1988?
……………………………………………………
7. Word’s first patented product…………………..
8. Cricketer Farokh Engineer was the first Indian sportsperson to endorse a brand in the 1960……………………….
Answers:1-liquidity, 2-Leverage, 3-Activity, 4-Profitability, 5-Wholesale debt Market, Self Regulatory organisation, Foreign Investment Promotion Board, Asset Management company, Fuller capital account convertibilty; 6-CRISIL, 7-Epsom Salt, 8-Brylcream
2. …………ratios show the proportions of debt and equity in financing the firm’s assets. (Activity, Liquidity, Profitability, Leverage)
3. …………ratios reflect the firm’s efficiency in utilizing its assets. (Activity, Liquidity, Profitability, Leverage)
4. …………ratios measure overall performance and effectiveness of the firm. (Activity, Liquidity, Profitability, Leverage)
5. Expand following:
WDM………………………………………..
SRO...………………………………………..
FIPB…………………………………………
AMC………………………………………...
FCAC……………………………………….
6. Which is India’s first credit rating agency set up jointly by LIC, GIC, UTI, ICICI and Asian development bank in Jan 1988?
……………………………………………………
7. Word’s first patented product…………………..
8. Cricketer Farokh Engineer was the first Indian sportsperson to endorse a brand in the 1960……………………….
Answers:1-liquidity, 2-Leverage, 3-Activity, 4-Profitability, 5-Wholesale debt Market, Self Regulatory organisation, Foreign Investment Promotion Board, Asset Management company, Fuller capital account convertibilty; 6-CRISIL, 7-Epsom Salt, 8-Brylcream
Sunday, August 12, 2007
FINANCE TERMS III
Return on capital employed
A fundamental financial performance measure. A percentage figure representing profit before interest against the money that is invested in the business. (profit before interest and tax/capital employed x 100)
Zero-coupon bond
A bond where no periodic interest payments are made, it issued at discount. The investor receives one payment, which includes principal and interest, at redemption (call or maturity)
Market Capitalization
Value of a corporation as determined by the market price of its issued and outstanding common stock. It is calculated by multiplying the number of outstanding shares by the current market price.
Mark to the Market
Adjust the valuation of a security or portfolio to reflect current market values.
Oversubscribed
Underwriting term describing a new stock issue where there are more buyers than available shares.
Amalgamation
When two or more existing companies go into liquidation and a new company is formed to take over the business is known as amalgamation.
Absorption
When one or more existing companies go into liquidation and some existing company buys the business is known as absorption.
Arbitrage
Buying a currency or securities in one market and selling it another to make profit is known as arbitrage.
Peculiar Word
Credit Crunch: Supply of Credit falls though there is sufficient demand
A fundamental financial performance measure. A percentage figure representing profit before interest against the money that is invested in the business. (profit before interest and tax/capital employed x 100)
Zero-coupon bond
A bond where no periodic interest payments are made, it issued at discount. The investor receives one payment, which includes principal and interest, at redemption (call or maturity)
Market Capitalization
Value of a corporation as determined by the market price of its issued and outstanding common stock. It is calculated by multiplying the number of outstanding shares by the current market price.
Mark to the Market
Adjust the valuation of a security or portfolio to reflect current market values.
Oversubscribed
Underwriting term describing a new stock issue where there are more buyers than available shares.
Amalgamation
When two or more existing companies go into liquidation and a new company is formed to take over the business is known as amalgamation.
Absorption
When one or more existing companies go into liquidation and some existing company buys the business is known as absorption.
Arbitrage
Buying a currency or securities in one market and selling it another to make profit is known as arbitrage.
Peculiar Word
Credit Crunch: Supply of Credit falls though there is sufficient demand
FINANCE QUIZ No.3
1. Working Capital Turnover=
a. Sales/ Net working Capital b. EBIT/Net working Capital
c. EBIT/ Capital Employed d. Net worth / Net working Capital
2. ROI (before tax) =
a. EBIDTA/Total assets b. EBIT (1- Tax rate)/ Capital employed
c. EBIT/ Capital employed d. PAT/Net assets
3. ROI (after tax) =
a. EBIDTA/Total assets b. EBIT (1- Tax rate)/ Capital employed
c. EBIT/ Capital employed d. PAT/Net assets
4. ROI (before tax & depreciation) =
a. EBIDTA/Total assets b. EBIT (1- Tax rate)/ Capital employed
c. EBIT/ Capital employed d. PAT/Net assets
5. P/E Ratio=_____________
6. EPS= _________________
7. Expand the following:
CRISIL ………………………………
ROCE ……………………………….
MFIs …………………………………
ICICI…………………………………
MCX………………………………..
NCDEX……………………………..
8. True/False
a. Profitability of the shareholders can be measured by EPS …………..
b. NPV of a financial decision is the sum of present value of cash inflows and
cash outflows…………..
c. Amortization is the measurement of depreciation of tangible goods……….
d. The change in profit due to change in sales is referred as operating leverage…
Answers: 1-a, 2-c, 3-b, 4-a, 5-Market price of share/EPS, 6-PAT/No. of shares, 7-Credit rating Information services of India Ltd., Return on capital employed, Micro finance Institutions, Industrial credit and Investment Corporation of India, Multi commodity Exchange, National commodities and derivatives Exchange, 8- T,F,F,T
a. Sales/ Net working Capital b. EBIT/Net working Capital
c. EBIT/ Capital Employed d. Net worth / Net working Capital
2. ROI (before tax) =
a. EBIDTA/Total assets b. EBIT (1- Tax rate)/ Capital employed
c. EBIT/ Capital employed d. PAT/Net assets
3. ROI (after tax) =
a. EBIDTA/Total assets b. EBIT (1- Tax rate)/ Capital employed
c. EBIT/ Capital employed d. PAT/Net assets
4. ROI (before tax & depreciation) =
a. EBIDTA/Total assets b. EBIT (1- Tax rate)/ Capital employed
c. EBIT/ Capital employed d. PAT/Net assets
5. P/E Ratio=_____________
6. EPS= _________________
7. Expand the following:
CRISIL ………………………………
ROCE ……………………………….
MFIs …………………………………
ICICI…………………………………
MCX………………………………..
NCDEX……………………………..
8. True/False
a. Profitability of the shareholders can be measured by EPS …………..
b. NPV of a financial decision is the sum of present value of cash inflows and
cash outflows…………..
c. Amortization is the measurement of depreciation of tangible goods……….
d. The change in profit due to change in sales is referred as operating leverage…
Answers: 1-a, 2-c, 3-b, 4-a, 5-Market price of share/EPS, 6-PAT/No. of shares, 7-Credit rating Information services of India Ltd., Return on capital employed, Micro finance Institutions, Industrial credit and Investment Corporation of India, Multi commodity Exchange, National commodities and derivatives Exchange, 8- T,F,F,T
Friday, August 10, 2007
FINANCE TERMS II
Compounding is a process of finding the future value of cash flow by applying the concept of compound interest.
General Equation of Compounding: F(n)=P(1+i)^n
Where (1+i)^n=Compound Value Factor, i=rate of interest, n=no. of years,
P= present value
Discounting is the process of calculating present value of cash flow.
Sinking Fund is a fund which is created out of fixed payments each period to accumulate to a future sum after a specified period. For eg. Company generally creates sinking funds to retire bonds (debentures) on maturity.
Gearing is the ratio of debt to equity, usually the relationship between long-term borrowings and shareholders' funds.
Goodwill is any surplus money paid to acquire a company that exceeds its net tangible assets value.
Reserve is the accumulated and retained difference between profits and losses year on year since the company's formation
Blue Chip is common stock of a nationally known company that has a long record of profit growth and dividend payment and a reputation for quality management, products, and services
PECULIAR FINANCIAL WORD
SLASH FUND
Money spent for payment towards the influential persons for the benefit of organization.
General Equation of Compounding: F(n)=P(1+i)^n
Where (1+i)^n=Compound Value Factor, i=rate of interest, n=no. of years,
P= present value
Discounting is the process of calculating present value of cash flow.
Sinking Fund is a fund which is created out of fixed payments each period to accumulate to a future sum after a specified period. For eg. Company generally creates sinking funds to retire bonds (debentures) on maturity.
Gearing is the ratio of debt to equity, usually the relationship between long-term borrowings and shareholders' funds.
Goodwill is any surplus money paid to acquire a company that exceeds its net tangible assets value.
Reserve is the accumulated and retained difference between profits and losses year on year since the company's formation
Blue Chip is common stock of a nationally known company that has a long record of profit growth and dividend payment and a reputation for quality management, products, and services
PECULIAR FINANCIAL WORD
SLASH FUND
Money spent for payment towards the influential persons for the benefit of organization.
FINANCE QUIZ No. 2
1. Which is correct about Preferred Stock?
a. It is reserved only for preferred customers or investors
b. It is always worth more than common stock
c. It always costs more than common stock
d. It has priority over common stock in the event of the dissolution of the company
e. It cannot be owned by full time employees of the company
2. Which bank offers a virtual temporary credit card for online purchases called NetSafe?
a. ICICI Bank
b. HSBC
c. HDFC
d. State Bank of India
3. Zero interest bonds are sold at:
a. discount
b. premium
c. fresh issue
d. accrual basis
4. Underwriting is guarantee for:
a. new issue market
b. marketability of shares
c. amount raised through equity
d. public issue
5. Name the term used for depreciating a Company’s intangible assets?
………………………….
6. Name the person who introduced the ‘Double Entry’ book keeping concept?
………………………….
7. What is an unusual service offered by Bank of Baroda at Tirupati?
……………………………
8. Expand
ULIP …………………………………………………………………..
FICCI ………………………………………………………………....
GBS …………………………………………………………………...
Answers: 1-d, 2-c, 3-a, 4-b, 5-Amortisation, 6-Lucas Piacoli, 7-Only bank in india which sells prasada, 8- Unit linked insurance Plan, federation of indian chamber of commerce and industries, Gross Budgetary Support.
a. It is reserved only for preferred customers or investors
b. It is always worth more than common stock
c. It always costs more than common stock
d. It has priority over common stock in the event of the dissolution of the company
e. It cannot be owned by full time employees of the company
2. Which bank offers a virtual temporary credit card for online purchases called NetSafe?
a. ICICI Bank
b. HSBC
c. HDFC
d. State Bank of India
3. Zero interest bonds are sold at:
a. discount
b. premium
c. fresh issue
d. accrual basis
4. Underwriting is guarantee for:
a. new issue market
b. marketability of shares
c. amount raised through equity
d. public issue
5. Name the term used for depreciating a Company’s intangible assets?
………………………….
6. Name the person who introduced the ‘Double Entry’ book keeping concept?
………………………….
7. What is an unusual service offered by Bank of Baroda at Tirupati?
……………………………
8. Expand
ULIP …………………………………………………………………..
FICCI ………………………………………………………………....
GBS …………………………………………………………………...
Answers: 1-d, 2-c, 3-a, 4-b, 5-Amortisation, 6-Lucas Piacoli, 7-Only bank in india which sells prasada, 8- Unit linked insurance Plan, federation of indian chamber of commerce and industries, Gross Budgetary Support.
Sunday, August 5, 2007
FINANCE TERMS I
Authorized capital is the maximum capital that a company is authorized to raise.
Issued capital is that part of the authorized capital which is offered by the company for being subscribed by members of the public or anybody.
Subscribed capital is that part of the issued capital which is subscribed (accepted) by the public.
Called up capital is a part of subscribed capital which has called up by the company for payment. For example, if 10,000 shares of Rs. 100 each have been subscribed by the public and of which Rs. 50 per share has been called up. Then the subscribed capital of the company works out to Rs. 1,000,000 of which the called up capital of the company is Rs. 5, 00,000.
Paid up capital refers to that part of the called up capital which has been actually paid by the shareholders. Some of the shareholders might have defaulted in paying the called up money. Such defaulted amount is called arrears. From the called up capital, calls in arrears is deducted to obtain the paid up capital.
Statutory Liquidity Ratio (SLR) is the percentage of total deposit a bank has to keep in approved securities.
Cash Reserve Ratio (CRR) is the percentage of its total deposit a bank has to keep with RBI in cash or near cash assets.
PECULIAR FINANCIAL WORD
ASSET TRIPPING:
buying a company to sell its assets.
Issued capital is that part of the authorized capital which is offered by the company for being subscribed by members of the public or anybody.
Subscribed capital is that part of the issued capital which is subscribed (accepted) by the public.
Called up capital is a part of subscribed capital which has called up by the company for payment. For example, if 10,000 shares of Rs. 100 each have been subscribed by the public and of which Rs. 50 per share has been called up. Then the subscribed capital of the company works out to Rs. 1,000,000 of which the called up capital of the company is Rs. 5, 00,000.
Paid up capital refers to that part of the called up capital which has been actually paid by the shareholders. Some of the shareholders might have defaulted in paying the called up money. Such defaulted amount is called arrears. From the called up capital, calls in arrears is deducted to obtain the paid up capital.
Statutory Liquidity Ratio (SLR) is the percentage of total deposit a bank has to keep in approved securities.
Cash Reserve Ratio (CRR) is the percentage of its total deposit a bank has to keep with RBI in cash or near cash assets.
PECULIAR FINANCIAL WORD
ASSET TRIPPING:
buying a company to sell its assets.
FINANCE QUIZ NO. 1
1.NASDAQ is acronym for
A. North American Share Dealers Association Quotes
B. National Association of Securities Dealers Automated Quotations
C. National All Stocks Dealers Automated Quotations
D. Network of Acquired Securities Distribution Application Quotations
2.The primary function of the Income Statement is to:
A) Show the company's value as of a given point in time
B) Determine if the company will have enough cash to operate properly
C) Determine taxes owed or not owed
D) Compare the company's assets against the company's liabilities
E) Measure the company's financial performance over a period of time
3.The primary function of the Balance Sheet is to:
A) Measure the company's performance over a period of time
B) Make sure that the company's assets and the company's liabilities "balance"
C) Determine taxes owed or not owed
D) Show the company's value as of a given point in time
4.The main three sections of the Cash Flow Statement are:
A) Cash from operating activities; cash from investing activities and cash from financing activities
B) Cash from operating activities; cash from sales and cash from administrative activities
C) Cash from assets; cash from liabilities and cash from equity
D) Cash from sales; cash from operations and cash from depreciation and amortization
E) Cash from customers; cash from shareholders and cash from miscellaneous sources
5.Which one of the following lists are the Current Liabilities of a company:
A) Accounts Payable, Notes Payable, Accrued Expenses AND Income Taxes Payable
B) Accounts Payable, Notes Payable, Accrued Expenses AND Prepaid Expenses
C) Accounts Payable, Notes Payable, Accrued Expenses BUT NOT Income Taxes Payable
D) Accounts Payable, Notes Payable, Income Taxes Payable BUT NOT Accrued Expenses
E) Accounts Payable, Notes Payable AND Prepaid Expenses
6.NSDL stands for
A. Network of Securities Depository Limited
B. Network of Stocks Directory Listing
C. National Stock Directory Limited
D. National Securities Depository Limited
Answeres:
1-B, 2-E, 3-D, 4-A, 5-A, 6-D
A. North American Share Dealers Association Quotes
B. National Association of Securities Dealers Automated Quotations
C. National All Stocks Dealers Automated Quotations
D. Network of Acquired Securities Distribution Application Quotations
2.The primary function of the Income Statement is to:
A) Show the company's value as of a given point in time
B) Determine if the company will have enough cash to operate properly
C) Determine taxes owed or not owed
D) Compare the company's assets against the company's liabilities
E) Measure the company's financial performance over a period of time
3.The primary function of the Balance Sheet is to:
A) Measure the company's performance over a period of time
B) Make sure that the company's assets and the company's liabilities "balance"
C) Determine taxes owed or not owed
D) Show the company's value as of a given point in time
4.The main three sections of the Cash Flow Statement are:
A) Cash from operating activities; cash from investing activities and cash from financing activities
B) Cash from operating activities; cash from sales and cash from administrative activities
C) Cash from assets; cash from liabilities and cash from equity
D) Cash from sales; cash from operations and cash from depreciation and amortization
E) Cash from customers; cash from shareholders and cash from miscellaneous sources
5.Which one of the following lists are the Current Liabilities of a company:
A) Accounts Payable, Notes Payable, Accrued Expenses AND Income Taxes Payable
B) Accounts Payable, Notes Payable, Accrued Expenses AND Prepaid Expenses
C) Accounts Payable, Notes Payable, Accrued Expenses BUT NOT Income Taxes Payable
D) Accounts Payable, Notes Payable, Income Taxes Payable BUT NOT Accrued Expenses
E) Accounts Payable, Notes Payable AND Prepaid Expenses
6.NSDL stands for
A. Network of Securities Depository Limited
B. Network of Stocks Directory Listing
C. National Stock Directory Limited
D. National Securities Depository Limited
Answeres:
1-B, 2-E, 3-D, 4-A, 5-A, 6-D
Wednesday, August 1, 2007
"Friends are always there to help you"
"May there always be work for your hands to do, may your purse always hold a coin or two. May the sun always shine on your windowpane, may a rainbow be certain to follow each rain. May the hand of a friend always be near you, may God fill your heart with gladness to cheer you."
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