Accounting Equation.pptx
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The accounting equation states that a company's total assets are equal to the sum of its liabilities and shareholders' equity, providing a foundational relationship between a company's assets, what it owes, and the ownership interest of its shareholders. Assets represent valuable items owned, liabilities are amounts owed to others, and shareholders' equity is the residual claim on assets after deducting liabilities. The accounting equation ensures the balance sheet balances by requiring equal debits and credits.
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In single line it is impossible to explain/understand, you need to understand the total concept
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Assets = Liabilities + Capital
or
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decreases
on the left-hand side.
When two sides are put together in T form, the left-hand side is called the ‘debit side’ and the
right hand side is ‘credit side’. When in an account a record is made on the debit or left-hand
side, one says that one has debited that account; similary to record an amount on the right-hand
side is to credit it.
From the above, the following rules can be obtained:
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loss account,balance sheet, notes to accounts etc).
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Double entry system of book-keeping has emerged in the process of evolution of various
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or
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The document discusses key accounting concepts and principles. It defines accounting as identifying, measuring, recording and communicating financial information. The main components of the accounting process are recording transactions, summarizing data, reporting to stakeholders, and analyzing results. Accounting serves both internal users like management and owners as well as external users like investors, lenders, suppliers, customers, tax authorities, auditors, and the public. Accounting concepts provide fundamental rules and assumptions for preparing financial statements according to standards.
Capital Budgeting.pptx
a process that businesses use to evaluate potential major projects or investments
We shall learn about Capital Budgeting and all the details related to it in this article:
What is Capital Budgeting in detail
Features of capital budgeting
Understanding capital budgeting and how it works
Techniques/Methods of capital budgeting with Examples
Process of capital budgeting
Factors affecting capital budgeting
Objectives
Limitations of capital budgeting
WEIGHTED AVERAGE COST OF CAPITAL (WACC).pptx
Weighted average cost of capital (WACC) is the average cost of all sources of capital for a company, weighted by their respective proportions. It is calculated by taking the cost of each capital source (debt, preferred stock, common equity, retained earnings), multiplying each by its proportional weight, and summing the results. Weights can be based on either book values from the balance sheet or market values from current stock prices. The WACC formula sums the weighted costs to obtain an overall cost of capital for the company.
finance startup.pptx
Startup financing is used by entrepreneurs to fund their businesses, most commonly for working capital, technology, hiring, and marketing. While entrepreneurs often think of bank loans first, banks are rarely the best source of funding for startups. Instead, innovative sources of non-bank financing include personal savings, personal credit lines, funding from family and friends, peer-to-peer lending, crowdfunding, microloans, vendor financing, and purchase order financing. These alternative sources provide startups with important capital when they need funding.
Cost of Equity Capital.pptx
The document discusses various approaches to calculating the cost of equity capital, which is the minimum rate of return investors require to maintain the market price of a share. It describes the dividend price, dividend price plus growth, earnings price, and realized yield approaches. Formulas are provided for each approach and examples are worked out, such as calculating the cost of equity using the dividend price approach for a company paying a 25% dividend and the earnings price approach for a firm considering a capital expenditure.
Corporate Finance.pptx
Corporate finance refers to planning, developing and controlling the capital structure of a business to increase organizational value and profit through optimal decisions on investments, finances and dividends. It focuses on acquiring, managing and allocating financial resources such as capital to meet the funding needs of a business. The key functions of corporate finance include investment decisions, financing decisions, and dividend decisions which are interrelated and aim to maximize shareholder wealth.
UNIT 1 FINANCIAL CREDIT RISK ANALYTICS (1).pptx
Credit analysis is the process of evaluating the creditworthiness of a business or organization. It involves analyzing financial statements, cash flows, collateral, and other factors to assess the entity's ability to repay debt. The key aspects of creditworthiness evaluated are capacity, character, capital, cash flow, collateral, conditions, and control. The credit analysis process involves collecting information on the loan, business, and risks. The information is then analyzed to make a decision on the loan request and design an appropriate loan structure. Credit analysis is important for lenders to evaluate default risk and for investors to assess a debt issuer's ability to meet obligations.
TRADING OF SECURITY.pptx
This document discusses different types of corporate financing - preference capital, equity capital, debentures, and bonds.
Preference capital is a hybrid form that has characteristics of both equity and debt. It increases a firm's creditworthiness but is more expensive than debt. Equity capital refers to ownership shares in a company. It provides no guaranteed returns and dilutes ownership but does not require repayment.
Debentures are debt instruments issued by companies as evidence of loans to the public. They have a fixed interest rate and are paid back before equity holders in liquidation. Debentures can be secured against assets or unsecured. They may also be redeemable or irredeemable.
Various types of Credit Facility.pptx
This document discusses various types of credit facilities available from banks and financial institutions. It outlines two main categories: fund-based credit, which involves a direct outflow of funds to borrowers, such as loans, cash credits, and overdrafts; and non-fund based credit, where there is no direct outflow of funds but banks provide guarantees or letters of credit to third parties on behalf of borrowers. Specific fund-based facilities discussed include term loans, demand loans, cash credits, overdrafts, and packing credits. Non-fund based facilities covered are letters of credit, bank guarantees, buyer's credits, and supplier's credits.
risk and return.pptx
This document discusses risk and return from an investment perspective. It defines risk as the probability of getting a return less than expected, which can arise from unexpected changes in dividends, interest rates or stock prices. Risk is categorized as either systematic, stemming from broader economic and market forces outside an investor's control, or unsystematic, which is specific to a particular company. Systematic risk includes market risk, interest rate risk and purchasing power risk. Unsystematic risk includes business risk, related to company-specific operations, and financial risk, regarding a company's capital structure. Standard deviation is presented as a quantitative measure of risk, assessing the dispersion of returns around the expected mean return.
CORPORATE SOCIAL RESPONSIBILITY ACCOUNTING ppt.pptx
This document provides an introduction to corporate social responsibility accounting. It defines social accounting as assessing and reporting on a company's environmental and social impacts. Social accounting goes beyond financial performance to consider how organizations affect society and the environment. The document outlines several definitions of social accounting from accounting bodies and scholars. It also lists features and benefits of social accounting, such as fulfilling social obligations, improving employee motivation, and enhancing a firm's public image. Finally, it distinguishes three main types of social accounting: environmental accounting, sustainability accounting, and national accounting.
RATIO ANALYSIS.pptx
Ratio analysis is a quantitative method of analyzing financial statements to assess a company's liquidity, turnover, solvency, and profitability. It involves calculating key financial ratios and comparing them over time and against industry benchmarks. Common ratios include current ratio, quick ratio, debt-to-equity ratio, profit margin, and return on assets. Ratio analysis provides valuable insights into a company's financial health and performance.
WORKING CAPITAL MANAGEMENT.pptx
This document discusses working capital management and provides definitions and concepts related to working capital. It defines working capital as the amount of cash used to run day-to-day business operations. There are two concepts of working capital: gross working capital, which refers to total current assets, and net working capital, which is current assets minus current liabilities. Current assets that are considered include cash, debtors, inventory, and more. Current liabilities include bills payable, creditors, loans, and other short-term obligations. The document also discusses the importance of working capital, types of working capital, factors that influence working capital needs, and methods for estimating working capital requirements including the operating cycle method and balance sheet method.
sapm (2).pptx
Fundamental analysis attempts to predict a security's intrinsic value by analyzing external factors that influence a company. This document discusses economic analysis, which is one part of fundamental analysis. Economic analysis studies macroeconomic factors like GDP, fiscal policy, monetary policy, trade balances, and exchange rates to understand their impact on companies and market prices. A strong economy with growing GDP, supportive fiscal/monetary policies, and stable currency rates is generally beneficial for companies and stock prices.
credit analysis process.pptx
Credit analysis is a process used by banks and financial institutions to evaluate potential borrowers. It involves collecting information about the borrower's identity, finances, repayment ability, and integrity. The institution then analyzes the accuracy of the information and makes a decision. Key steps include information collection, verification, and assessing the borrower's character, capacity to repay, capital, business conditions, and available collateral through a 5 C's model. Proper loan documentation and pricing are also important parts of the process.
ACCOUNTING USER.pptx
The document discusses the various users of accounting information both internal and external to an organization. Internal users include owners/shareholders, management, and employees who use accounting data to evaluate financial health, profitability, and business decisions. External users such as creditors, investors, tax authorities, consumers, researchers, competitors, media, regulatory agencies, government, auditors, and the public also rely on accounting information for purposes such as assessing credit risk, investment decisions, tax assessments, price evaluations, research analyses, competitive analyses, economic reporting, ensuring compliance, forming audit opinions, and monitoring economic trends.
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- 1. ACCOUNTING EQUATION PRESENTED BY: Vikash Barnwal Assistant Professor Kashi Institute of Technology
- 2. The accounting equation states that a company's total assets are equal to the sum of its liabilities and its shareholders' equity. This straightforward relationship between assets, liabilities, and equity is considered to be the foundation of the double- entry accounting system. The accounting equation ensures that the balance sheet remains balanced. That is, each entry made on the debit side has a corresponding entry (or coverage) on the credit side.
- 3. ANALYSIS OF TRANSACTION Assets: the acceptable meaning of assets is the valuable things owned by firm. Expenditure for acquiring these valuable articles for use in the business is also termed as assets. The assets are acquired for constant future use. They are not meant of sale. It increase the profit earning capacity of the business. Some of the assets are as follow: (i) Cash in hand (ii) Cash at Bank (iii) Sundry Debtor or Book debts (iv) Bills Receivable (v) Investment (vi) Closing stock (vii) Land Building (viii) Plant and Machinery (ix) Equipment and Tools (x) Furniture fittings (xi) Patent, Trademark etc. (xii) Goodwill (xiii) Prepaid Expense (xiv) Accrued income
- 4. LIABILITIES A liability is something a person or company owes, usually a sum of money. Liabilities are settled over time through the transfer of economic benefits including money, goods, or services. Certain external liabilities are as under: (i) Creditors of goods- sundry creditors and bills payable (ii) Creditors for expenses:- (a) Outstanding salary (b) Unpaid wages (c) Rent due but not paid (iii) Other Liabilities: (a) Bank overdraft (b) Bank Loan (c) Partner`s loan (d) Loan from Financial institution i.e IFCI, IDBI etc (e) Employees providend fund (f) workmen`s compensation fund
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- 6. ACCOUNTING EQUATION Capital + Liabilities= Assets Liabilities = Assets – Capital Capital = Assets – Liabilities Assets – Liabilities - capital= Zero