The Unethical

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Fixed Assets - This type of assets indicate the infrastructural facilities and properties required by the organisation. Fixed assets are the assets which bring profits in the long span of time. The investments decisions in this type of assets are technically referred as "Capital Budgeting Decisions" and generally concerned with the following - How one should select the fixed assets which are actually needed by the business or fulfill the business purpose?\ What are the methods or modes of analysis of the type of investments to be done in this type of assets? Incase of uncertainity and risk, how one should make a decision to invest in Fixed assets? Current assets: - Assets that are generated over during the operations and are capable of converting into the form of cash or getting utilised within the short period of time,lets say one year. The type of investments decisions which are made so as to invest in Current assests are technica

Current assets Managements - Working Capital Management   These are the assets that are generated during the course of operation and are capable of converting into cash benefits in a given span of time. It's the responsibility of the finance department to ensure that company has sufficient funds to invest in the current assets otherwise it will hamper the ongoing business operations and may obstruct production. Therefore the department should not block funds in un-necessary activities and should ensure optimal utilization of resources and funds

All the profits that were earned by the organisation on the basis of business performed by the organisation belongs to the owners of the organisation.   However in the case of "Corporate Organisation" shareholders are the owners of the company and so therefore are eligible for the profits in the form of dividends. So far there is no such rule or law that specifies the amount of the profits that should be shared by the way of dividends and how much should be retained by the company. A firm can do both- distribute a part profits and retain other for the ongoing expenses and planning so as to expand the business further and earn more profits. E.g.- A firm can distribute the 50% of profits and retain 50% of profits for the business operations. There are both pros and cons of dividends. Since announcing dividends can withdraw money from the business and hence may affect business operations. On the other hand if a firm do not announce the dividends then it can lose the

Fixed Assets Management - Capital Budgeting Decisions Fixed assets are like the properties, infrastructure facilities that are required by the business operations to complete successfully. A finance executive has to evaluate and decide on which fixed assets the company should invest so that company can perform all its current and proposed future functions. There are various techniques that are available and that can be used by the finance department to evaluate various proposals for the investments like - pay back period, Net Present Value, internal rate of interest, profitability index. Once the economic value of those fixed assets gets over than a proper depreciation policy should also be formulated.      

Broadly speaking one can categorize finance into 4 subcategories- Business Finance - It refers to all the business activities which are carried on to increase profits and wealth maximization. Corporation Finance - simply speaking it is very much a part of business finance and deals the practices, policies and problems of corporate enterprises. It studies all the financial actions performed by a company from the beginning to the end. Public Finance- It deals with the money managed by the government. Since government raises money through various sources like - Tax, Public Sector Utilities etc and usually it's a huge amount of money. However Govt enterprises don't operate on the general concept of profit making but they do have to accomplish certain social objectives and develop the nation. International Finance - It deals with the study of financial dealings/actions performed in between individuals/organizations

In ancient times the primary focus of the business is profit. They do business and earn money. But the term profit in itself has various meanings and can be explained in different ways in contrast to different situations. In today's business world one can not have the profits as the only and main goal of doing business. One can have different types of profits like- Short term & Long term profits Pre-tax and Post-tax profits and so on………. It should be noted that profits and risk go simultaneously, that is to earn more profits one must take more risks and find new business opportunities. So while doing business and planning for any decison it should   always be kept in mind that business decisions involves risk and uncertainty. Therefore its wiser to consider risk following any major course of action.   Year Company X Company Z 1 st Year - 45000 2 nd year -

Types of Firms 1-     Proprietary Firms 2-     Partnerships Firms 3-     Joint Stock Companies Partnerships Firms More than two firms but less than 20 persons come to and build a business and operate it. Each parent is the owner of the business and owns the profits/loses made in the proportion decided prior to setting up the business. This type of relationship is governed by the conditions laid down in Partnership Deed. Its easy & economical to operate. There are more resources to handle the complex issues and operations. At present the tax works out to be = 30%+ 10%+ +2%= 33.66% Expenditure allowed Can pay interest on the capital to the partners on the amount of capital put by them in the business at the rate of interest of 12% Firm can remunerate parents in the for of bonus. Salary commission etc provided partner takes part in the day-to-day operations of the firm and act as a working Partner. The remunerat

Types of Firms 1-     Proprietary Firms 2-     Partnerships Firms 3-     Joint Stock Companies   Joint Stock Companies Can raise lage amounts of funds as the number of owners can be unlimited. The total requirements of funds of the organisation is split into the units called as shares and each share carries a denomination value called as face value or nominal value. Anyone can participate by purchasing the shares and becomes the part owner that company to the extent of his shareholding. ·          They have a legal status and get registerd under companies act. These firms can be sued or be sued, can own assets but in no way the shareholders are liable for actions of company. ·          They have limited liability and hence the shareholders are liable to the extent of their shareholding in the company. ·          Segregation of management and ownership. Shareholders are the owners and directors are the managers who work for the owners and operate the firm and ea

Types of Firms 1-     Proprietary Firms 2-     Partnerships Firms 3-     Joint Stock Companies Proprietary Firms There is only one owner of the company called as "Proprietor". All the profits/loses were owned by the proprietor. These types of firms do not have a legal status and exists because the proprietor exists and will cease to exist once the proprietor cease to exists Since there is only one owner of the company therefore the capacity to raise funds and take complex decisions becomes limited. If there were loses then to meet those loses, a owner has to sell off his personal properties, since it's a unlimited liability firm. The income is always clubbed with the income of individuals and hence proprietor has to pay more taxes.

Since one cannot have profits as the sole goal, therefore a new generally accepted concept of creation of wealth come into force. It says that every business should focus on maximizing wealth and value of shares of the company by providing quality goods and playing a socially responsible role in the society. Thus as asset is valued on the basis of benefits it produces and not on the basis of its cost. E.g. a pen - it can cost around rs-5 only but can become handy in producing some of the best selling books and stories. Similarly one can judge the value of course of action on the basis of the benefits that action will produce. One can measure benefits in the terms of the cash flows that can be produced in the future by that action or asset Conclusion - Any action or asset that was taken based on the decision that works on the concept of wealth creation and which produces a stream of future benefits exceeding its costs should be accepted taking their uncertainty into considerati

What is a useful thing? Things that can be placed in a causal connection with the satisfaction of human needs we term useful things. If we can use or direct these things to fulfill the human satisfaction then we call them we call them goods. Moreover is a thing has to become a good then it must satisfy the follwing conditions- 1. It should be required or there must be a human need. 2. It must have certain properties that can be modified or utilised so as to fulfill the human need. 3. Human must possess the knowledge to use that good. 4. Human must posses enough power or resources to use that thing to the level of humna satisfaction. A thing can become good only when all of these four characters were present and will lose the value or the status of being a good when any of this character went missing.   Therefore there must be a relation that can be estabilished between the thing and humans and this relation depends upon the inherent property of the things and in the

It generally refers to the integration of the economic theory with business practices. Where economics provides the tools to explain the relationship between demand, supply, price, competition, etc. In total managerial economics applies this knowledge to the management of business.   Below are the definitions given by different experts- Prof , Spencer Sigelman – Managerial economics deals with "integration of economic theory with business practice for the purpose of facilitating decision making and forward planning by management.   Prof. Hague – ME is concerned with using logic of economics mathematics & statistics to provide effective ways of thinking about business decision problems.   Prof. Joel Dean – "The Purpose of ME is to show how economic analysis can be used in formulating business polices."   Based on above definitions we can conclude that – Economic theory provides the basis for the decision making process. Not only economic

As per Prof. Baumol - The three main contributions of economic theory to business economics are - Building analytical models which help in recognising the structure of managerial problems and eliminating the minor details which might hamper decision making and distracts from the main issue. ME can develop tools that may not directly apply to the issue but may enhance the abilities of Business analyst so that he can analyse the issue in much detail and provide a efficient solution. ME provides clarity in various concepts in the business analysis that enables managers to avoid conceptual pitfalls. Decision making in today's business involve a great amount of risk and uncertainty due to uncertain market forces like - policies, demand & supply, changing business environment, political changes etc. This uncertainty and risk in decision making can be greatly reduced if the business conditions and environment in which a business operates can

Where you can apply Managerial Economics?   The scope and application of ME is so wide that it encompasses each problem of the manager & firm. It can deal with demand analysis and forecasting, production function, cost analysis, inventory management and advertising price system. In broad terms you may apply ME as below -: Demand analysis & forecasting Production Function Cost Analysis Inventory Management Advertising/Promotion Pricing System Resource Allocation Capital Budgeting                 ……………and lots more. Demand analysis & forecasting – It analyses and provides a estimate of demand for products of a company. By this a manager can estimate a not only the current demand but can also estimate the future requirements so that he can allocate resources based on the planning. Production Function – Many resources have alternative resources that can be utilised in the same or way so as to yield the same result. The

It's a activity which is carried on with the intention of earning profits. If the operations of a typical manufacturing organisation are considered, it involves the purchasing of raw materials, processing the same with the help of various factors of production like labor and machinery, manufacturing the final product and selling the finished products in the market to earn profits. As per the dictionary - "The activity of providing goods and services involving financial and commercial and industrial aspects " Key areas of business - Finance, Marketing, Production