Tracking Financial Performance Standards of ... - Sa-Dhan

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Tracking Financial Performance Standards of Microfinance InstitutionsTermFranchiseFraudFunds StatementFungibilityGeneral ExpenseGeneral LedgerGoing ConcernGoing Concern ConceptGoodwillDefinitionLegal arrangement whereby the owner of a trade name, franchisor, contractswith a party that wants to use the name on a non-exclusive basis to sell goodsor services, franchisee. Frequently, the franchise agreement grants strictsupervisory powers to the franchisor over the franchisee which, nevertheless,is an independent business.Willful misrepresentation by one person of a fact inflicting damage on anotherperson.The statement of changes in financial position.The quality of money that makes one individual specimen indistinguishablefrom another. Anything used as money (gold, shells, bank notes) must havethis quality. The fungibility of money makes it difficult for lenders to ensurethat borrowers use the loan funds in the way lenders wish; one way they try toget round "misuse of funds" is to lend in kind. Often a person will borrowmoney for one stated purpose, but the effect of the loan is to finance anotheractivity. Say, for example, that I intend to improve my house using savings butsomeone offers me a home improvement loan on attractive terms. The effectof the loan is not to increase quality of the housing stock, as the lender intended,but to enable me to undertake some other activity I could not otherwise havefinanced buying a motorcycle, taking a holiday, or perhaps partying everynight. Micro finance lenders such as donors and NGOs tend to dislike thisbecause (a) they don't think poor people should use their limited incomes onsuch things, and (b) it reduces the funds available for lending to other potentialclients or beneficiaries.Expense incurred in the general operation of a business. Expenses related to(1) running a firm's office or (2) any other operating activities that do notinvolve the sale of merchandise. Also called administrative expenses.Collection of all asset, liability, owners’ equity, revenue, and expense accounts.A ledger containing the financial statement accounts. The principal ledger,when used in conjunction with subsidiary ledgers that contains all of thebalance sheet and income statement accounts.Assumption that a business can remain in operation long enough for all of itscurrent plans to be carried out.The concept that assumes that a business entity has a reasonable expectationof continuing in business at a profit for an indefinite period of time.Premium paid in the acquisition of an entity over the fair value of its identifiabletangible and intangible assets less liabilities assumed. An intangible asset madeup of such factors as an excellent reputation, a fine location, a superior productline, or outstanding management skills. Used to give a partner a greater capitalcredit than the amount of assets invested. An intangible asset that adds valueto the worth of a company; for example, the reputation of its products, services,or personnel. Listed in the assets category (sometimes as "Investments andsundry assets") on the statement of financial position.126
Glossary of Financial TermsTermGoverning DocumentsGranteeGrantorGuaranteed LoanGuarantyHistorical CostHorizontal AnalysisImprovementIncomeIncome from OperationsIncome StatementIndependent Auditors' ReportIndirect ExpenseIndirect LaborInflationInformal Finance SystemOfficial legal documents that dictate how an entity is operated. The governingdocuments of a corporation include articles of incorporation and Bylaws; apartnership includes the partnership agreement; a trust includes the trustagreement or trust indenture; and an LLC includes the Articles of organizationand operating agreement.Person to whom property is transferred.(1) Person who transfers property. (2) Person who creates a trust.A pledge to cover the payment of debt or to perform some obligation if theperson liable fails to perform. When a third party guarantees a loan, it promisesto pay in the event of a default by the borrower.Legal arrangement involving a promise by one person to perform theobligations of a second person to a third person, in the event the secondperson fails to perform.Original cost of an asset to an entity.DefinitionThe comparison of each item in a company's financial statements in the currentperiod with the same item from a previous accounting period or periods. Thepercentage analysis of increases and decreases in corresponding items incomparative financial statements.Expenditure directed to a particular asset to improve its performance or usefullife.Inflow of revenue during a period of time. (See Net Income.)Gross profit minus operating expenses. Also called operating income. Theexcess of gross profit over total operating expenses.Summary of the effect of revenues and expenses over a period of time. Asummary of a business's revenue and expenses for a specific period of time,such as a month or a year. Other terms used to describe the income statementare earnings statement, operating statement, statement of operations, and profitand loss statement.A report accompanying financial statements, which chartered accountants(CPAs) express an opinion as to the fairness of the statements.An expense of operating a business that is not associated with a specificdepartment; an expense that benefits an entire business and would continueto exist even if a specific department were eliminated.The cost of those employees who work in the company, but not on the productitself. Example - Accountants not working in the credit programA period when prices in general are rising and the purchasing power of thecurrency (dollar or rupee or pound sterling) is declining."Informal" refers to types of institutions. Most community-based financialinstitutions are formal organizations, although they are not normally targetedfor a particular purpose. While every group exhibits some degree of formality,the term "informal" is used principally to describe traditional systems of savingsand loans.127
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TECHNICAL TOOL SERIES 1TRACKING FIN
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INTRODUCTION TOMICROFINANCE STANDAR
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5. PERFORMANCE STANDARDS - CONCEPT,
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ACKNOWLEDGMENTSThe need of the oper
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Tracking Financial Performance Stan
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Page 138 and 139: REFERENCESBarrel, Margaret, Michael
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Tracking Financial Performance Standards of ... - Sa-Dhan

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