financial_management_[www.accfile.com]

Recommendations

Info

206 Financial Management 11. IDBI July. 1984 IDBI – Rs. 1823.32 Million 12. Industrial Venture Capital Ltd. Sep. 1996 TN Venture fund Rs. 90 Million 13. International Venture Capital Management Ltd. Feb. 1996 Nandi Investment $ 30 Million 14. JF Electra Advisors India Ltd. Aug. 1995 JFE–$ 24 Million 15. Marigold Capital Services Ltd. Aug. 1995 MM fund Rs. 200 Million 16. Pathfinder Investment Company Ltd. Nov. 1993 Rs. 299.50 Million 17. Risk Capital and Investment Company Pvt. Ltd. Jan. 1998 Rs.1000 Million 18. SIDBI Apl. 1990 Rs. 600 Million 19. TDICI Ltd. Jan. 1998 Rs. 5500 Million and $ 75 Million 20. Kitven Aug. 1998 Rs. 18 Crore FACTORING Factoring is a service of financial nature involving the conversion of credit bills into cash. Accounts receivables, bills recoverables and other credit dues resulting from credit sales appear, in the books of accounts as book credits. Here the risk of credit, risk of credit worthiness of the debtor and as number of incidental and consequential risks are involved. These risks are taken by the factor which purchase these credit receivables without recourse and collects them when due. These balance-sheet items are replaced by cash received from the factoring agent. Factoring is also called “Invoice Agent” or purchase and discount of all “receivables”. Although these can be with recourse or without recourse, normally the risk is taken by the factoring agent. The discount rate includes the loss of interest, risk of credit and risk of loss of both principal and interest on the amount involved. Myths on Factoring Myth Factoring is nothing but bill discounting or bill finance Factoring reduces bankers business Fact Factoring and bill discounting are two different products tailored for two different markets. Factoring is meant for “Open account sales” and caters largely to a buyer’s market. Bill discounting is normally prevalent in a seller’s market. Factoring unlike bill discounting offers a continuous relationship. Factoring is not merely financing and includes a package of services like collection and followup of each invoice, credit insurance. MIS support etc., and improves the health of bank’s clients, improveds cash flow through factoring, increases production cycles and need for more working capital. Factoring essentially aims at replacing high cost market credit and not necessarily reduce bank finance. Contd....
Special Financing 207 Factoring is an high cost borrowing Comparable to interest rates of banks. (SSI – 13.50% to 15.75% Non-SSI 13.50% to 17.25%) Will to offer SBI’s PLR selectively) Factoring service charge is high Factoring is meant for manufacturing units only Factoring limits falls within MBBF/ Assessed Bank finance Service Charge is 0.1% to 0.3% only whereas in Bills discounting, the collection charge is 0.5% to 0.6%. Extended to all sectors namely Manufacturing, Trading and Services. Factoring is to be classified as other Current liability as per RBI guidelines and Factoring replaces market credit and not bank borrowings. History of the Early Factoring in Roman Factoring has not been documented as having been used by the Romans. However, the word ‘factoring’ has a Roman root. It is derived from the Latin verb ‘facio’ which can be translated as “he who does things”. In Roman times this referred to agent of a property owner, i.e., his business manager. Though the root word has nothing to do with the industry, as they attempt to help their clients through their financial problem. Factoring in United States Factoring arose in the United States during 19th century, as direct result of the inability of manufacturers to maintain constant and timely communications with their sales forces in the field. At that time, as the case today, the sales force was paid by communications. If all sales were at the risk of the manufacturer, the salesman had no incentive to exercise prudence in connection with whom to sell to on credit. On the other hand, the distant manufacturer was not in the position to make the credit risk on sales. The risk of defective or non-conforming merchandise remained with the manufacturer. The credit risk was now separated from disputes as to quality, workmanship and conformity of goods. Soon after, the salesman began to act as independent sales agencies. It was common for them to act for more than one manufacturer. Still later the sales function was separated from the credit function and “Traditional Factoring” as the people know, it had, at that point, developed in the United States. Factoring in India Banks provide generally bill collection and bill discounting and with recourse. They provide working capital finance based on these bills classified by amounts maturity wise. Such bills if accumulated in large quantities will burden the liquidity and solvency position of the company and reduces the credit limits from the banks. It is therefore felt necessary that the company assigns these book debts to a factor for taking them off from the balance sheet. This reduces the workload, increases the solvency and improves the liquidity position of the company.
Page 4 and 5:
Preface Financial Management is an
Page 6 and 7:
Contents • Increase the value of
Page 8 and 9:
Contents • Effects of under capit
Page 10 and 11:
Contents Modigliani and Miller’s
Page 12 and 13:
Contents • Average stock level 16
Page 14 and 15:
Contents • Operational result of
Page 16 and 17:
Contents Insurance Sector in India
Page 18 and 19:
2 Financial Management According to
Page 20 and 21:
4 Financial Management SCOPE OF FIN
Page 22 and 23:
6 Financial Management 3. Profit is
Page 24 and 25:
8 Financial Management Traditional
Page 26 and 27:
10 Financial Management Proper Use
Page 28 and 29:
12 Financial Management Financial S
Page 30 and 31:
14 Financial Management the operati
Page 32 and 33:
16 Financial Management Solution Co
Page 34 and 35:
18 Financial Management Exercise 3
Page 36 and 37:
20 Financial Management Solution Sc
Page 38 and 39:
22 Financial Management Solvency Ra
Page 40 and 41:
24 Financial Management Debtors Tur
Page 42 and 43:
26 Financial Management SOURCES OF
Page 44 and 45:
28 Financial Management SECURITY FI
Page 46 and 47:
30 Financial Management profit, the
Page 48 and 49:
32 Financial Management 2. Cumulati
Page 50 and 51:
34 Financial Management Features of
Page 52 and 53:
36 Financial Management financial y
Page 54 and 55:
38 Financial Management Short-term
Page 56 and 57:
This page intentionally left blank
Page 58 and 59:
42 Financial Management Character o
Page 60 and 61:
44 Financial Management • Excessi
Page 62 and 63:
Page 64 and 65:
48 Financial Management According t
Page 66 and 67:
50 Financial Management FACTORS DET
Page 68 and 69:
52 Financial Management -up to Rs.
Page 70 and 71:
54 Financial Management where V = S
Page 72 and 73:
56 Financial Management NI approach
Page 74 and 75:
58 Financial Management where I = I
Page 76 and 77:
60 Financial Management Company ‘
Page 78 and 79:
Page 80 and 81:
64 Financial Management MODEL QUEST
Page 82 and 83:
66 Financial Management According t
Page 84 and 85:
68 Financial Management Importance
Page 86 and 87:
70 Financial Management (b) If the
Page 88 and 89:
72 Financial Management Cost of Deb
Page 90 and 91:
74 Financial Management Cost of deb
Page 92 and 93:
76 Financial Management = 1,60,000
Page 94 and 95:
78 Financial Management W p = Perce
Page 96 and 97:
Page 98 and 99:
82 Financial Management You are req
Page 100 and 101:
84 Financial Management Leverage Fi
Page 102 and 103:
86 Financial Management Operating l
Page 104 and 105:
88 Financial Management Financial l
Page 106 and 107:
90 Financial Management Where, DR=
Page 108 and 109:
92 Financial Management Capital str
Page 110 and 111:
94 Financial Management WCL = Perce
Page 112 and 113:
96 Financial Management EBT 1,400 1
Page 114 and 115:
98 Financial Management 14. The fol
Page 116 and 117:
100 Financial Management Dividend C
Page 118 and 119:
102 Financial Management P 1 can be
Page 120 and 121:
104 Financial Management Calculatio
Page 122 and 123:
106 Financial Management (b) Number
Page 124 and 125:
108 Financial Management Where, P =
Page 126 and 127:
110 Financial Management As per Wal
Page 128 and 129:
112 Financial Management Gordon’s
Page 130 and 131:
114 Financial Management C. If payo
Page 132 and 133:
116 Financial Management TYPES OF D
Page 134 and 135:
Page 136 and 137:
120 Financial Management It is clea
Page 138 and 139:
122 Financial Management 7. Perform
Page 140 and 141:
124 Financial Management Solution P
Page 142 and 143:
126 Financial Management 5 20,000 1
Page 144 and 145:
128 Financial Management Net Presen
Page 146 and 147:
130 Financial Management 3 65000 0.
Page 148 and 149:
132 Financial Management Base facto
Page 150 and 151:
134 Financial Management Project B
Page 152 and 153:
136 Financial Management Solution I
Page 154 and 155:
138 Financial Management Solution C
Page 156 and 157:
140 Financial Management Cash inflo
Page 158 and 159:
142 Financial Management = 2386500
Page 160 and 161:
144 Financial Management As the pro
Page 162 and 163:
146 Financial Management 12. From t
Page 164 and 165:
Page 166 and 167:
150 Financial Management Capital Fi
Page 168 and 169:
152 Financial Management Working Ca
Page 170 and 171:
154 Financial Management NEEDS OF W
Page 172 and 173:
156 Financial Management 5. Credit
Page 174 and 175: 158 Financial Management Period Cov
Page 176 and 177: 160 Financial Management 2. Moderat
Page 178 and 179: 162 Financial Management Conservati
Page 180 and 181: This page intentionally left blank
Page 182 and 183: 166 Financial Management A proper p
Page 184 and 185: 168 Financial Management Minimum Le
Page 186 and 187: 170 Financial Management Ordering c
Page 188 and 189: 172 Financial Management This analy
Page 190: (A) First in First out Method FIFO
Page 194 and 195: 176 Financial Management 3. Specula
Page 196 and 197: 178 Financial Management Opportunit
Page 198 and 199: 180 Financial Management 1. Sales L
Page 200 and 201: 182 Financial Management Percentage
Page 202 and 203: 184 Financial Management Solution S
Page 206 and 207: 188 Financial Management (iv) (v) H
Page 208 and 209: 190 Financial Management (c) Work-i
Page 212 and 213: 194 Financial Management Working Da
Page 214 and 215: 196 Financial Management (d) Lag in
Page 216 and 217: 198 Financial Management 13. On 1 A
Page 218 and 219: 200 Financial Management According
Page 220 and 221: 202 Financial Management 7. Domesti
Page 222 and 223: 204 Financial Management • Unit T
Page 226 and 227: 208 Financial Management In 1998 a
Page 228 and 229: 210 Financial Management The follow
Page 230 and 231: 212 Financial Management 4. FDI in
Page 232 and 233: 214 Financial Management (b) SEBI s
Page 234 and 235: 216 Financial Management Bank of Ba
Page 236 and 237: 218 Financial Management BB FB P4 I
Page 238 and 239: 220 Financial Management (Rs. in cr
Page 240 and 241: 222 Financial Management Types of M
Page 242 and 243: 224 Financial Management MODEL QUES
Page 244 and 245: 226 Financial Management Financial
Page 246 and 247: 228 Financial Management State Bank
Page 248 and 249: 230 Financial Management • Global
Page 250 and 251: 232 Financial Management Capital In
Page 252 and 253: 234 Financial Management Subsidies
Page 254 and 255: 236 Financial Management financial
Page 256 and 257: 238 Financial Management Functions
Page 258 and 259: 240 Financial Management • Touris
Page 260 and 261: 242 Financial Management During the
Page 262 and 263: 244 Financial Management Management
Page 264 and 265: 246 Financial Management Financial
Page 266 and 267: 248 Financial Management The second
Page 268 and 269: 250 Financial Management 12. Bhuban
Page 270 and 271: 252 Financial Management Group A an
Page 272 and 273: 254 Financial Management The number
Page 274 and 275:
256 Financial Management Depreciati
Page 276 and 277:
258 Financial Management A well-org
Page 278 and 279:
260 Financial Management Intermedia
Page 280 and 281:
262 Financial Management Venture Ca
Page 282:
264 Financial Management Non-Bankin
show all

financial_management_[www.accfile.com]

Create successful ePaper yourself

Delete template?

Save as template?