FIN_FOR_NON_FIN_PPT.ppt - FUNDAMENTAL ANALYSIS FOR...

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FUNDAMENTAL ANALYSIS FOR COMPETITIVE ADVANTAGE
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FINANCE FOR NON-FINANCE EXECUTIVES Presentation by: Vaishali Apte Management Consultant 2
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3 BUSINESS ENTITY CONCEPT Separate entity concept treats a business as distinct and completely separate from the owners Business stands apart from other organizations as separate economic unit Necessary to record the business transactions separately to distinguish it from the owner's personal transactions The best example here concerns that of the sole trader or one man business: in this situation you may have the sole trader taking money by way of 'drawings': money for his own personal use. Despite it being his business and apparently his money, there are still two aspects to the transaction: the business is 'giving' money and the individual is 'receiving' money. Affairs of the individuals behind a business must be kept separate from the affairs of the business itself
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Business Structures 4 Business Partnership Closely held Company Proprietary Public Ltd. Private Ltd. Publicly held
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Types of Business Organizations Proprietary business Single owner of the business No difference between the obligations of the business and the obligations of the individual Partnership firm Two or more owners of the business No difference between the obligations of the business and the obligations of the individuals 5
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Types of Business Organizations Company Artificial person, created by law Perpetual existence Obligations of the company are separate from those of promoters and management. Private limited company Not more than 50 members Shares are not freely transferable No invitation to public for subscription Public limited company Closely held public limited company Publicly held public limited company 6
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Types of Business Organizations Closely held public limited company Not a listed company No invitation to public for subscription. Publicly held public limited company A listed company Held by large number of shareholders Shareholder have limited liability in limited companies 7
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Stakeholders in the business Investors - Equity holders / owners Debt providers including debenture holders, banks and financial institutions Suppliers Distributors and retailers Employees Customers Government Society 8
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Annual Reports Auditors Report Profit and loss account Balance sheet Cash flow statement Qualification of auditors Directors Report 9
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10 Financial Statements At the end of an accounting period, the business accounts for its activities by producing three main financial statements: Profit & Loss Statement Cash Flow Statement Balance Sheet Statement
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Balance sheet A Financial statement that summarizes a company's assets, liabilities and shareholders' equity at a specific point in time.
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  • Fall '19
  • Balance Sheet, Generally Accepted Accounting Principles

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