...IFAC Board Exposure Draft November 2012 Comments due: February 28, 2013 Professional Accountants in Business International Good Practice Guidance Project and Investment Appraisal for Sustainable Value Creation IFAC’s mission is to serve the public interest by: contributing to the development of high-quality standards and guidance; facilitating the adoption and implementation of high-quality standards and guidance; contributing to the development of strong professional accountancy organizations and accounting firms and to high-quality practices by professional accountants, and promoting the value of professional accountants worldwide; and speaking out on public interest issues. The PAIB Committee serves IFAC member bodies and professional accountants worldwide who work in commerce, industry, financial services, education, and the public and not-for-profit sectors. Its aim is to promote and contribute to the value of professional accountants in business. To achieve this objective, its activities focus on: increasing awareness of the important roles professional accountants play in creating, enabling, preserving, and reporting value for organizations and their stakeholders; and supporting member organizations in enhancing the competence of their members through development and sharing of good practices and ideas. Copyright © November 2012 by the International Federation of Accountants (IFAC). For copyright, trademark, and permissions information, please see page...
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...Islamabad Campus, Pakistan 2010 Online at http://mpra.ub.uni-muenchen.de/32685/ MPRA Paper No. 32685, posted 15. August 2012 01:05 UTC World Applied Sciences Journal 9 (9): 997-1002, 2010 ISSN 1818-4952 Financial Management Practices and Their Impact on Organizational Performance 1 Babar Zaheer Butt, 2Ahmed Imran Hunjra and 2Kashif-Ur-Rehman 1 2 Foundation University, Rawalpindi, Pakistan Iqra University Islamabad Campus, Pakistan Abstract: This study measures the relationship between organizational performance and financial management practices like capital structure decision, dividend policy, investment appraisal techniques, working capital management and financial performance assessment in Pakistani corporate sector. Sample of the study consisted of forty companies operating in Pakistan, related to different sectors and listed at Karachi Stock Exchange. The finance executives and financial analysts of the companies responded to questionnaire that identified through company profiles and references. The questionnaires were self administered to collect the data from respondents. The results show a positive and significant relationship between financial management practices and organizational performance in Pakistani corporate sector. Key words: Corporate sector % Financial management practices % Karachi stock exchange % Organizational performance INTRODUCTION The corporate sector plays a vital role in the economic outlook of any country. Financial literature suggests...
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...corporate banking and the risks faced by the Banking Industry in India. * To familiarise the students with the new Banking Practices and Processes including new banking technologies. * To familiarise the students with the legal and regulatory framework for banks in India. * To equip the students with the tools and techniques used in interpreting and evaluating the performance, profitability, productivity, and efficiency of the Commercial Banks. * To equip the students with the in-depth knowledge of Bank Financial Management Process including Treasury, Investment, Asset Liability Management & Risk Management. * To equip the students with the in-depth knowledge and skills in Credit Analysis & Appraisal Processes relating to the banks’ lending decisions like Working Capital Financing, Term Loan & Project Financing, Domestic & International Trade Finance including Export-Import Finance, BG (LG) & LC, Retail Asset Financing like Home Loans, Car Loans, Educational Loans, Gold Loans, Loans ag. Securities, Personal and Credit Card Loans. * To understand and appreciate customer-focused banking, integrated risk management like interest-rate risk, liquidity risk, market risk,...
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...MBA7001 Accounting for Decision-Makers Week 6 Lecture – Capital Investment Appraisal Slide 10.2 Chapter 10 Making capital investment decisions LEARNING OUTCOMES CHAPTER 10: Investment Appraisal Methods You should be able to: Explain the nature and importance of investment decision making First hour – 23.11.11 Identify the four main investment appraisal methods found in practice •Payback •ARR Use each method to reach a decision on a particular investment opportunity Discuss the attributes of each of the methods 1 Atrill and McLaney, Accounting and Finance for Non-Specialists, 7th Edition, © Pearson Education Limited 2011 Investment Appraisal Investment appraisal methods used in practice Investment appraisal – the process of appraising the potential investment projects. Assessment of the level of expected returns earned for the level of expenditure made. Estimates of future costs and benefits over the project’s life. 3 • Every business would like to do everything • But it all costs • Capital expenditure on new projects or purchases (fixed assets) needs to be planned • Capital is always rationed Scenario: • Your business wishes to expand its product line • It is considering Products A and B but it can only afford to do one. • How does it decide? What main factors affect the investment decision • How much will it cost ? Investment appraisal methods used in practice • How much will I get back ? • When will I get the income ? • 4 main techniques available ranging from ...
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...article is the last in a series of three, and looks at the theory, advantages, and disadvantages of the CAPM. The first article, published in the January 2008 issue of student accountant introduced the CAPM and its components, showed how the model can be used to estimate the cost of equity, and introduced the asset beta formula. The second article, published in the April 2008 issue, looked at applying the CAPM to calculate a project-specific discount rate to use in investment appraisal. CAPM FORMULA The linear relationship between the return required on an investment (whether in stock market securities or in business operations) and its systematic risk is represented by the CAPM formula, which is given in the Paper F9 Formulae Sheet: E(ri) = Rf + βi(E(rm) - Rf) E(ri) = return required on financial asset i Rf = risk-free rate of return βi = beta value for financial asset i E(rm) = average return on the capital market The CAPM is an important area of financial management. In fact, it has even been suggested that finance only became ‘a fully-fledged, scientific discipline’ when William Sharpe published his derivation of the CAPM in 19861. CAPM ASSUMPTIONS The CAPM is often criticised as being unrealistic because of the assumptions on which it is based, so it is important to be aware of these assumptions and the reasons why they are criticised. The assumptions are as follows2: Investors hold diversified portfolios This assumption means that investors will only require a return for...
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...UNDER GUIDANCE OF MS. ARPITA SHARMA AMITY BUSINESS SCHOOL AMITY UNIVERSITY RAJASTHAN 2010-2012 Acknowledgement Achieving A Milestone For Any Person Is Extremely Difficult. However, There Are Motivations Which Come Across The Curvaceous Path Like Twinkling Stars And Make Our Task Easier. An Opportunity Has Been Given To Me By Rajasthan Sate Industrial Development And Investment Corporation Limited. Jaipur For Summer Training In The Field Of Finance For The Period From 6 june 2011 To 21th July 2011 (45 Days) I Would Also Like To Express My Special Gratitude To Mr. P.M. Jain For Giving His Precious Time For Guiding Me And Help Me In Bringing Out The Work In The Present Shape And Sharing A Valuable Knowledge Which Help Me In Building The Future Edge Of My Career. Also I would Like To Thanks Mr. A.K Jahalani (Agm –Appraisal), Mr. Suneet Mathur (Osd-Infra/Finance), Mr. V.B.Mathur (Agm-F&R), Mr.A.C. Chhabra(Sr.Dgm-Finance), Mr.R.K.Limba(Dgm-Appraisal),Mr.P.K. Sharma(Dgm),Mr. Vishal Dixit, Anoop Kumar Mathur(Dgm-Pid). Unger The Supervision Of Sir Krishan Goyal Sipriya (Dgm(Finance)) Thanks To Sir For Giving Valuable Input Time To Time In The Course Of My Training Programme. My heartiest gratitude extends to my Guide Ms.ARPITA SHARMA who has helped me in every aspect of my work. I would like to express my profound sense of gratitude to the Vice-Chancellor Dr. Raj Sing. The greatest credit goes to the blessings bestowed upon me by Almighty God without...
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...Abstract Purpose: The purpose of this report is to study the HR Policies and practices in Stock broking Firms in Investment financial Sector. Methodology: in this study, we intended to assess the HR policies and practices in stock broking companies. Primary data based on three stock broking firms and secondary data based on 10 research paper were analyzed to assess HR policies and practices by stock broking firms. For this study, many factors are consider for further analyzed like recruitment, selection, induction, learning & development, performance appraisal, career progression, rewards, employee recreation. The sample analysis analyzed is constituted of stock broking companies listed on the one of the stock exchange in India. Findings: In stock broking firms, they are used pre-define structure for recruitment and selection. They are also followed all the HR practices and policies which applicable in finance industry as well as other industry. Research limitation: This report is only focused on one sector (investment) and in investment sector only considered 3 stock broking firms for this study. Most of head of the HR manager were in Mumbai, so the collected of the data from subordinate HR managers or rather HR executives. Introduction: HRM contributes to organizational performance in different ways: through sound functional basics, through effective realignment when the external environment changes; and by building an organizational context to that the...
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...Project appraisal techniques are used to evaluate possible investment opportunities and to determine which of these opportunities will generate the best return to the firm’s shareholders. Therefore, it is vital for the firm if they wish to continue receiving funds from shareholders to employ the best techniques available when analysing which investment opportunities will give the best return. There are two types of project appraisal techniques: non-discounted cash flows and discounted cash flows. The Net Present Value and internal rate of return, examples of discounted cash flows, are in use in many large corporations and regarded as more effective than the traditional techniques of payback and accounting rate of return. In this paper, I will examine the use of the Net Present Value, and the provisions it makes for specific cases, such as unequal lives and mutually exclusive projects. Then I will conclude with the technique that has been proved the best for investment appraisal through the analysis and comparison of project appraisal techniques. The Net Present Value (NPV) method is used by 75% of firms when deciding on investment projects. The reasons for its wide use is that firstly, the NPV rule takes into account the time value of money, meaning that it recognises that a pound today is worth more than a pound tomorrow as the pound today can be invested to start earning interest immediately. Secondly, NPV depends solely on the forecasted cash flows from the project...
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...misapplication of capital investment appraisal techniques Colin Drury Professor, University of Huddersfield, Huddersfield, UK Mike Tayles Lecturer, University of Bradford, Bradford, UK Surveys of capital budgeting practices in the UK and USA reveal a trend towards the increased use of more sophisticated investment appraisals requiring the application of discounted cash flow (DCF) techniques. Several writers, however, have claimed that companies are underinvesting because they misapply or misinterpret DCF techniques. Such claims have been made on the basis of observations in only a few companies, or anecdotal evidence, without any supporting statistical evidence. Reports on a recent survey conducted by the authors which suggests that many UK firms are guilty of misapplying DCF techniques. Also provides evidence relating to some issues that have not been thoroughly examined in previous studies, namely the impact of company size and the relative importance that firms attach to different investment appraisal techniques. An examination of the surveys of capital budgeting practices that have been undertaken during the past 20 years in both the UK and USA reveals a trend towards a continuing increase in the use of more sophisticated capital budgeting techniques. In a longitudinal survey of capital budgeting practices of large UK companies between 1975 and 1992 Pike (1996) reported a substantial increase in the usage of discounted cash flow (DCF) and risk appraisal techniques. In 1975 32...
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...Questions for Banks Finance Job 1. 2. 3. 4. 5. 6. 7. What do mean by a Bank, what kind of business a bank is doing? How banks earn profit? What are the product and services offered by a bank? What assets and liability products of a bank? What is net interest margin (NIM)? What deposit mobilization? Why these days the mobilizations are going down? What are the factors effecting deposit mobilization of a bank? What is RBI Credit Policy and how RBI control money supply and interest rate (definition and importance of CRR, SLR, Repo rate, Reverse Repo rate and Bank rate). What are the Securities qualify for SLR requirement of a bank? What is Open Market Operation (OMO) of RBI? What is base rate of a bank, how it is different from BPLR (Banks Prime Lending Rate). What is Credit rating and how it helps banks in credit appraisal of company. What is the process of the credit rating? If client approaches you for a project loan than how you are going to assess the credit worthiness of the client (important ratios use for credit appraisal) dead services coverage ratio, interest coverage ratio, etc. If you are working with a bank then are the important ratios for credit appraisal? What are your strengths weakness for your banking jobs? Do your SWOT analysis for a bank job. What are the main functional areas in a bank for finance professionals (treasury related jobs, risk management, credit appraisal, loans indication, merchant banking). What is IRR, how it is used for project appraisal by a bank?...
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...Baby and me Health&Beauty Spa Services Business Plan 2014 Baby and Me Health-Beauty Spa services London Phone: 02033248641 Mobile:07849282187 e-mail:infobaby_me@yahoo.com 1 Table of Contents 1.Executive Summary 2.Sources of Finance 2.1 Sources of finance 2.2 Importance of Sources of finance 2.3 Capital required for business 2.4 Advantages and disadvantages of finance 2.5 Start-up 2.6 Cash flow 2.7 Sales Forecast 6 7 8 9 9 12 13 3. Return Investment 3.1 Investment Appraisal 3.2 Importance of Investment Appraisal 3.3 Advantages and Disadvantages 3.4 Calculation of Return on Investment 14 14 15 16 4.Financial Planning 4.1 Successful business 4.2 Importance of financial planning 4.3 Price 4.4 Fixed cost and Variable cost 4.5 Break even analysis 17 18 19 20 20 5.Financial Documents 5.1 Importance of financial documents 5.2 Profit and Loss account 5.3 Balance sheet 5.4 Profit and loss 5.4 Ratios 5.5 Conclusion Reference List 2 21 22 24 24 25 25 1. Executive Summary Baby and Me is a start-up business, planned to begin commerce In June 2014 as a sole trader enterprise owned by Oktavianti. The business leads up to be the first mother-to-be spa or salon in Bedford Square, London City. With services and products offered in an exclusive combination, I believe that the market share will grow quickly. Baby and Me supplies clients with a relaxing and recovering environment where all of their soul and...
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...Bangladeshi SME’s growth. Unfortunately the issue seems to be as unresolved as it always has been. Though the majority of the issues are with the SMEs themselves, the banks and non-banking financial institutions (NBFI) also have major issues in designing financial products for the SMEs. Banks and NBFIs always play a major role in our country’s economy. The number of branches of private bank and NBFI is increasing day by day. As the number is increasing, the competitive environment is making the firms to be more aggressive, innovative and diversified. As a NBFI, United Leasing Company (ULC) was established in 1989 by reputed foreign and local institutions in collaboration with IDA. The objective was to create an Institution that will cater to the investment needs of our economy. As the competition is rising in the market, so ULC is also going through some changes of processes. They have introduced a department for analyzing clients before financing named Credit Department for all types of financing including small, medium and corporate enterprise financing. This internship report is about the credit approval process for Small Enterprise Financing in ULC. 1.2 Origin of the report Now a day, education is not just limited to books and classrooms. In today’s world, education is the tool to understand the real world and apply knowledge for the betterment of the society as well as business. From education the theoretical knowledge is obtained from courses of study, which is only the half way...
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...Consultant of the Michel Chang Date - 15th May, 2013 Subject -Financial analysis of the investment proposals by investment appraisal tools and giving suggestions and recommendations. I am going report the suggestion of acceptable investment with NPV method to you as a consultant of Michel Chang. For Beer Chang, 0 (15000) × 1 = (15000) PVIFA (r=10%) n 1-10 3000 × 6.145 = 18435 10 1500 × 0.386 = 579 NPV = 4014 For EduCare, 0 (10,000) × 1 = (10000) 1 (500) × 0.909 = (454.5) 2 1500 ×0.826 = 1239 3 2500 × 0.751 = 1877.5 4 3500 × 0.683 = 2390.5 5 4500 × 0.621 = 2794.5 6 5500 × 0.564 = 3102 7 6000 × 0.513 = 3078 8 5400 × 0.467 = 2521.8 9 4400 × 0.424 = 1865.6 10 2000 × 0.386 = 772 9186.4 Due to NPV method, the final results show that both investments show positive answer and are possible. Comment and Suggestion I can tell Both Beer Chang Project and EduCare are acceptable based on these calculations with NPV method. But we cannot do both of them at the same time. We have to choose the most possible project. According to this calculation, EduCare can make more profit more than Beer Chang can get. This is the fact, why we have to choose EduCare Service. 1. Investment Appraisal Methods There are four types of Investment Appraisal methods. They are- 1. NPV (Net Present Value) 2. PBP (Pay Back Period) 3...
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...KENYATTA UNIVERSITY OPEN LEARNING PROGRAMME DEPARTMENT OF ACCOUNTING AND FINANCE UNIT CODE: BAC 502: UNIT TITLE: FINANCIAL MANAGEMENT Course Lecturer: F. Abdul LESSON ONE INTRODUCTION 1.1. What is Financial Management Financial management can be defined as the management of the finances of an organisation in order to achieve the financial objectives of the organization. The usual assumption in financial management for the private sector is that the objectives for the company is to maximize shareholders wealth. 1.2. Financial Planning The financial manager will need to plan to ensure that enough funding is available at the right time to meet the needs of the organisation for short, medium and long-term capital. a) b) 1.3. In the short-term, funds may be needed to pay for purchases of inventory, or to smooth out changes in receivables, payables and cash: the financial manager is here ensuring that working capital requirements are met. In the medium or long term, the organisation may have planned purchase of fixed assets such as plant and equipment, for which the financial manager must ensure that funding is available. Financial Management decisions The financial management decisions relate to investment, financing and dividends. The management of risk must also be considered. Investments in assets must be financed somehow. Financial management is also concerned with the management of short-term funds and with how funds can be raised over the long term. The retention...
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...sales cloud offers sales force automation opportunities in the market including data storage, retrieval and customer prospecting information including sales leads, progress and forecasts. The service cloud enables firms to address customer service and support needs including mailing and telephone communication services to customers. Lastly, the Marketing cloud offers crucial customer information needed to target certain customer demographics such as favorite sites visited. The Community cloud offers firms a platform to engage specific customer categories using apps. Lastly, the analytics cloud helps firms to deploy sales marketing and service operations using data gathered though apps. Historical and Pro-Forma Financial Statements (Yahoo Finance, 2015) | 2015 | 2014 | 2013 | 2016[est] | Total Revenue | 5,373,586 | 4,071,003 | 3,050,195 | 7,132,457.05 | Cost of Revenue | 1,289,270 | 968,428 | 683,579 | 1,771,459.72 | Gross Profit | 4,084,316 | 3,102,575 | 2,366,616 | 5,365,572.17 | Operating Expenses | | | | - | Research Development | 792,917 | 623,798 | 429,479 | 1,079,780.36 | Selling General and Administrative | 3,437,032 | 2,764,851 | 2,047,847 | 2,417,535.61 | Non Recurring | - | - | - | | Others | - | -...
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