Designed to help the candidates appearing the Appendix 3, LDCE, 70% etc of Railway Accounts
Friday, April 3, 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.
****
Saturday, March 28, 2020
Indian Railways Vs Government of India
Tuesday, March 24, 2020
Marginal Costing for LDCE
Monday, March 23, 2020
Friday, March 20, 2020
Tuesday, February 25, 2020
SCR Group D to Group C examination question papers
Sunday, February 9, 2020
NIF - National Investments Fund
CRIF - Central Road & Infrastructure Fund
2020-21 Railway Budget financials
click for Statement of Railway receipts and Expenditure Budget 2020-21
SN
|
Receipts
|
Amount
(Rs. in Crores)
|
Percentage
|
SN
|
Expenditure
|
Amount
(Rs. in Crores)
|
Percentage
|
|
1
|
Coaching Earnings
|
67500
|
30 %
|
1
|
Ordinary Working Expenses
|
163157.17
|
75 %
|
|
2
|
Goods Earnings
|
147000
|
65 %
|
2
|
Appropriation to DRF
|
800
|
1 %
|
|
3
|
Sundry Earnings
|
11013
|
5 %
|
3
|
Appropriation to Pension Fund
|
53160
|
24 %
|
|
4
|
Gross Earnings (1+2+3)
|
225513
|
100 %
|
4
|
Gross Working Expenses (1+2+3)
|
217,117.17
|
100 %
|
|
5
|
Suspense
|
100
|
5
|
Suspense
|
- 404.17
|
|||
6
|
Gross Receipts (4+5)
|
225613
|
6
|
Gross Expenditure (4+5)
|
216713
|
|||
7
|
Misc Receipts
|
300
|
7
|
Misc. Expenditure
|
2700
|
|||
8
|
Total Receipts (6+7)
|
225913
|
8
|
Total Expenditure
|
219413
|
Zonal Railway
|
OR
|
Rank
|
Metro Railway, Kolkata
|
250.3
|
HIghest
|
Eastern Railway, Kolkata
|
171.1
|
Second Highest
|
East Coast Railway, Bhubaneswar
|
50.9
|
Lowest
|
South East Central Railway, Bilaspur
|
52.3
|
Second Lowest
|