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.
Friday, August 10, 2007
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
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