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Showing posts with label LDCE. Show all posts
Showing posts with label LDCE. Show all posts
Monday, April 27, 2020
Wednesday, April 22, 2020
Wednesday, April 1, 2020
Cash Flow Statement - Management Accounting for LDCE
Cash Flow Statement - Management Accounting for LDCE
«
Meaning: A statement
which discloses the changes in Cash position between two periods (usually 31st
March of previous year to 31st March of current year)
« Example: A Balance sheet shows a cash balance as on 31.03.2019 at Rs. 5 lakhs, while the same position as on 31.03.2020 at Rs. 6 lakhs. That means cash inflows during the year 2019-20 is Rs.1 lakh.
« The statement also outlines the reasons for such cash inflows or cash outflows, which in turn helps to analyze the functioning of Business.
« It is an important tool in the hands of Business Management.
«
Components of Cash are 1. Cash on Hand 2.
Cash at Bank 3. Short term,
highly liquid investments that are readily convertible into cash.
Advantages:
1. Efficient in Cash Management - Helps how much cash will be available at a particular point of time to meet the day to day obligations.
2. Helps in internal financial management.
3. Discloses the movement of cash during the financial year. Understanding and analysis of what are the sources & applications of cash.
4. Past years cash flow statement is used as an estimate for next year's cash flow.
5. Shows the success / failure of cash management.
6. Comparison between two firms.
7. Analysis of relationship between profitability and net cash flow.
Limitations
1. Cash flow statement cannot serve the purpose of Profit and Loss Account. Because later covers both cash items and non cash items, whereas former covers only cash items.
2. Cash flow statement can't replace the Fund flow statement. The later one is reflecting the complete financial picture than the former one.
3. Cash balance as per Cash flow statement cannot represent the real liquid position of the firm, because of postponing of purchases & other payments.
4. Very difficult to define the term "Cash". whether the items like cheques, stamps, postal orders etc are comes under purview of cash or not.
()()()()()()
Working Capital Management Accounting for LDCE
Working Capital Management
Accounting for LDCE
1991 LDCE SCR - 5 marks
ü
Meaning: Represents the amount of funds required to
finance " the day to day activities".
ü Excess of Current Assets over Current Liabilities.
ü It should be ideal/sufficient. That means neither more nor less to the correct requirements of working capital.
ü Shortage - Difficult to manage day to day activities/payments.
ü Surplus - Capital will be blocked / unutilized.
ü So it should be sufficient to meet current obligations ( not long term obligations)
ü The difference between Gross Working Capital and Net Working Capital is "Current Liabilities". Total sum of all current assets is called Gross Working Capital. The difference between Current Assets & Current Liabilities is called Net Working capital.
&&&&
ROCE - Management Accounting for LDCE
ROCE - Management Accounting for LDCE
· Full form is Return On Capital Employed
· It is most important Ratio among all the Financial Ratios
·
ROCE = Return /Capital
Employed x 100
· Expressed in Percentage. Example Return is 200 rupees against the capital 2000 rupees employed. ROCE is 200/2000 x 100 = 10 %.
· Return = Net Profit + or - Non Trading adjustments + Interest on Long term debts + Provision for tax - Interest/Dividend from non trade investments
· Capital Employed = Equity share capital + Reserves & Surpluses + Preference share capital + Debentures & other long term loan - Misc Expenditure & loss - Non trade investments.
ROCE in Indian Railways
· Para 511 of Indian Railway Finance & Administrate Code mentions Return on Capital.
·
Return on Capital =
Percentage of Revenue Surplus/Net Receipts to Capital at charge and Investments
from Capital Fund.
· Revenue Surplus/Net Receipts = Total Revenue Receipts - Total Revenue Expenditure
· Since element of Dividends is not there (from 2017-18 onwards due to merger of Railway Budget with General Budget), the Net Receipts and the Revenue Surplus are one and same.
· Total Revenue Receipts = Gross Earnings (X, Y & Z) minus Suspense
· Total Revenue Expenditure = Gross Working Expenses ( OWE + Appropriation to DRF & Pension Fund) minus Suspense.
****
Tuesday, March 24, 2020
Marginal Costing for LDCE
Marginal Costing
·
Total cost + Profit = Sales
·
Total Cost = Variable
Cost + Fixed Cost
·
So, Variable Cost
+ Fixed Cost + Profit = Sales
·
Sales = Variable Cost + (Fixed
Cost + Profit)
·
Contribution = (Fixed Cost + Profit)
·
Sales - Variable Cost = Contribution
·
I.e., S - V = (F + P)
or
·
S - V = C
or
·
C = S - V
·
Contribution = Sales - Variable Cost
·
Contribution = (Fixed Cost + Profit)
·
(Fixed Cost + Profit) = Sales - Variable Cost
·
Profit Volume Ratio (PV Ratio) = Contribution
/ Sales
·
BEP - Break Even Point = Where No Profit or No
loss.
·
BEP - Break Even
Point = Fixed Cost / P V Ratio
Problem:
Sales - Rs. 100,
Variable Cost - Rs. 80, Fixed
cost - Rs. 10. Find the Sales at Break
Even Point
Answer:
Contribution = Sales - Variable Cost
C = Rs. 100 - Rs. 80 = Rs. 20
PV Ratio = Contribution / Sales = Rs. 20/ Rs.100 = 0.20
BEP = Fixed Cost / PV Ratio
BEP Sales = Rs.10 /0.20
= Rs. 50
To Prove:
If Sales is Rs. 100,
Variable Cost is Rs. 80
If Sales is Rs. 50, Variable Cost is ? = 50/100 x 80 = Rs. 40
Contribution = Sales -
Variable Cost Rs. 50 - Rs. 40
= Rs. 10
In Break Even Point, Contribution equals Fixed Cost. Here too Contribution (Rs. 10) and Fixed Cost
(Rs.10) are equal. That means No Profit or No loss at Sales Rs. 50.
***
Thursday, February 6, 2020
Thursday, November 21, 2019
Monday, September 23, 2019
Friday, August 30, 2019
Friday, July 5, 2019
English Vocabulary
Learn English Vocabulary with the help of the Editorial of The
Hindu Newspaper
for aspiring LDCE candidates
Linkfor Analysis of Vocabulary in The Hindu Editorials
04.07.2019
1.
Hiatus (Noun) - Pause,
break, interval
If the party and its coalition survive the current turmoil it will still
be only hiatus.
2. Stem from (Verb) - emerge from, originate from
The BJP’s confidence in winning the by-polls stems from its spectacular showing in the Lok
Sabha elections.
3.
Wait in the wings (Phrase) - Ready to do something or to be used at the appropriate
time
The BJP is not just waiting in the wings;
it is actively trying to reenact a script it has perfected over a decade and
more.
4.
Horse-trading (noun) - Hard and shrewd bargaining especially in
politics
With two MLAs of the Congress resigning from the Karnataka Assembly, it
is clear that horse-trading to pull down the
State government is under way.
5.
Manoeuvre (Verb) -
Manage, organize, arrange (something tactfully)
At 105 seats in the 224-strong house, it was eight short of a simple
majority and began plans to manoeuvre its way to
power.
6.
The time is ripe (phrase) – An appropriate or convenient time has come.
The BJP appears to be convinced that the time is
ripe for a strike, both because of its success in the parliamentary
election and the disenchantment in the Congress over the alliance with the
JD(S).
7.
Pay the price (phrase) - To go
through the unpleasant outcome of something which you have done earlier.
The congress is lacking in these aspects and is paying
a heavy price.
8.
Rout (Noun) - Defeat
The party still enjoys significant public support in Karnataka, as was
demonstrated in the local body election weeks after its rout in the Lok Sabha election.
02.07.2019
Other than deepening the existing fault-lines in its own State and rendering the situation even more
volatile, it is unclear what the Nagaland government hopes to achieve through the exercise.
- demography (noun) – the
statistical study/structure of populations, especially human beings.
But
the Assam experience shows that in the complex demographies of the Northeastern
States, it may not turn out that way.
When
such is the situation on the ground, in an already
volatile region where the Armed Forces (Special Powers) Act is routinely
extended, it is best that Nagaland proceeds with caution in this enterprise.
Emotive political issues cannot be allowed to drive
the compiling of a registry of citizens.
Bangladesh
has repeatedly suggested that the process going on in Assam is “an internal
matter” of India, implying that there is no deportation possibility here.
While
it would mean convenience, privacy
and ease for people belonging to the upper strata who have easy access to
healthcare facilities anytime, for those living in conditions of vulnerability
and lack access to health care, self-help becomes the primary, timely and
reliable form of care.
One of the reasons why people
shy away from getting tested for HIV is stigma and discrimination.
What
has changed is the deluge of new diagnostics,
devices and drugs that are transforming the way common people access care, when
and where they need them.
01.07.2019
1. Plurilateral
ü bilateral
- involving two parties / countries
ü multilateral
- among more parties / countries
ü plurilateral
- among limited parties / countries with a particular interest (between more
than two countries, but not a great many, which would be multilateral.
"The
countries that make up the G-20(19 nations and the European Union) account for
85% of the World's nominal GDP, and each pressing issues it wishes to discuss
with other members on bilateral, plurilateral and multilateral
levels."
2. Fugitive
ü Fugitive (n) : [ fyoo-ji-tiv
]
A
person who is fleeing, from prosecution, intolerable circumstances,
etc. A
runaway. Example:
A fugitive from justice.
"Mr. Modi raised several Indian
concerns at the G-20 deliberations, including the need for cooperation on
dealing with serious economic offenders and fugitives, as well as climate
change funding. This found its way into the final declaration."
3. Grandstanding
ü Grandstanding (verb
intransitive)
to conduct oneself or perform showily or ostentatiously in
an attempt to impress onlookers.
"The G-20 is an important platform to
discuss pressing issues, and it must not be detracted from its original purpose
of promoting sustainable growth and financial stability by grandstanding by one or two
members."
4. Modicum - Noun [ mod-i-kuh m, moh-di-
]
ü a moderate or small amount,
little bit, particle..
Example:
He hasn't even a modicum of common sense.
"While the mandated investment in
government securities will ensure a modicum of liquidity, the reduction in sectoral concentration will
discipline funds and force them to diversify their risks."
|+_)(*&^%$#@!~
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