On Management

Over capitalisation when the business had more funds invested in the business than can be profitably employed Risk management is the process of identifying and minimising the potential cost of unfavourable events. Insurance Is a service offering protection against future possible loss as a result of some unfavourable event in the future. Budget is an expression of management plans in financial terms Profitability is a financial objective of the business and is concerned with the adequacy of profit Liquidity is a financial objective of a business and is concerned with being able to meet all cash obligations when they are due Growth is a financial objective and is concerned with increasing the size of the business Cash budget is a plan for cash receipts, cash payments and the resultant cash balance at certain points in time Targeted profit level should provide a reasonable return on the owners' investment - this means that the retur...

Financial Resources Resources which have a monetary value Financial Management is planning, organizing and controlling the acquisition and use of financial resources for the purposes of achieving organisational goals. Financing is the process of determining the appropriate forms and sources of finance Financing strategy is the determination of the type of finance used to purchase assets, and the resulting mix between equity, short term debt and long term debt Investment is the use of finance to acquire an asset which will yield a required return Investment strategy is the determination of the appropriate mix of a business's assets Asset Item of value which is owned by an organisation Accounts receivable (Short term/ current asset) - customer who owes the business money for buying goods/services on credit Inventory stock - Items manufactured or purchased by the business for sale to the customers Financial Intermedia...

Total Risk= Unique Risk + Market Risk The unique risk of a security represents that portion of its total risk which stems from firm specific factors like the development of anew product , a labor strike, or the emergence of a new competitor. Events of this nature primarily affect the specific firm and not all firms in general. Hence the unique risk of a stock can be washed away by combining it with other stocks. In diversified portfolio, unique risks of different stocks tend to cancel each other- a favorable development in one firm may offset an adverse happening in another and vice versa. Hence, unique risk is also referred to as diversifiable risk or unsystematic risk. The market risk of a stock represents that portion of its risk which is attributable to economy wide factors like growth rate of GNP, the level of government spending, money supply, interest rate structure and inflation rate. Since these factors affect all firms to a greater or lesser degree, investors c...

Context Adequate Resources Leadership and structure  Climate of trust Performance Evaluation and Reward Systems Composition Abilities of members Personality Allocating roles Diversity Size of teams Member flexibility Member preferences Work Design Autonomy Skill variety Task Identity Task significance Process Common Purpose Specific Goals Team efficacy Conflict Levels Social Loafing Courtesy Stephen P. Robbins

Debentures World over, a debenture is a debt security issued by a corporation that is not secured by specific assets, but rather by the general credit of the corporation. Stated assets secure a corporate bond, unlike a debenture. But in India these are used interchangeably. Bonds A bond is a promise in which the issuer agrees to pay a certain rate of interest, usually as a percentage of the bond's face value to the investor at specific periodicity over the life of the bond. Sometimes interest is also paid in the form of issuing the instrument at a discount to face value and subsequently redeeming it at par. Some bonds do not pay a fixed rate of interest but pay interest that is a mark-up on some benchmark rate . Typically bonds are issued by PSUs, Public Financial Institutions and Corporates. Another distinction is SLR (Statutory Liquidity Ratio) and non-SLR bonds. SLR bonds are those bonds which are approved securities by RBI which fall under the SLR limits of bank...

A host of external and often largely uncontrolled factors influence a firm's choice of direction and action and ultimately its organizational  structure and internal processes. These factors which constitute the external environment can be divided into two interrelated subcategories those in the remote environment and those in immediate operating environment. Remote environment  The remote environment is composed of a set  of forces that originate  beyond and usually irrespective of any single firm 's operating situation-- Economic Political  Social Technological Industry Economic Consideration It refers to the nature and direction of the economy in which the business operates Social Consideration This involves the beliefs ,values, attitudes, opinions , and lifestyles of those in a firm's external environment, as developed from their cultural,ecological,demographic,religious,educational and ethnic conditioning. Political Conditioning The di...

Comparison Between Bonus Issue and Stock Split Bonus Issue Stock Split The Par value of the stock remains constant The par value of the stock is reduced A part of the reserve is capitalised There is no capitalization of reserves The shareholders proportional ownership remains unchanged The shareholders proportional ownership remains unchanged The book  value per share, the earnings per share and the market price per share decline The book  value per share, the earnings per share and the market price per share decline The market price per share is brought within a more popular trading range The market price per share is brought within a more popular trading range