Statement of Changes in Equity (Sample)

                                                                                  XYZ Company
                                                                        Statement of Changes in Equity
                                                                            For the year ended 20XX

	Share Capital	Share Premium	General Reserve	Sinking Fund	Accu. OCI	Retained Earnings
Balance b/d	X	X	X	X	X	X
Add: Net income						X
Transfer to General reserve			X			(X)
Comprehensive income					X
Balance c/d	X	X	X	X	X	X

Read More

Difference between Recognized and Un-Recognized Provident Fund.

Recognized Provident Fund:- A Provident Fund which is recognized by an income tax commissioner is called a Recognized Provident Fund.

Un-Recognized Provident Fund:- A Provident Fund which is not recognized by an income tax commissioner is called an Un-Recognized Provident Fund.

Read More

Difference between Contributory and Non Contributory Provident fund.

Contributory Provident Fund:- A contributory Provident Fund is one Where employee and Employer both contributes the same amount to the Provident Fund. A certain percentage is deducted from the basic salary of an employee and the same amount is deposited to the Provident Fund by the employer.

Non Contributory Provident fund:- A Non Contributory Provident fund is one where only employee contributes to his/her provident fund.

Read More

Statement of Cash Flows (Sample)

                                       XYZ Company
                                       Statement of Cash Flows
                                       For the Year ended 20XX

Cash flows from operating activities:
Net income	XX
Adjustments to reconcile net income
Add: Depreciation on building	X
Add: Depreciation on equipment	X
Add: Amortized of bond discount	X
Add: Loss on sale of securities	X
Add: Loss on sale of equipment	X
Less: Gain on sale of marketable securities	(X)
Cash from operating activities before working capital changes
Increase in accounts receivable (net)	(X)
Decrease in inventory	X
Increase in prepaid insurance	(X)
Decrease in accounts payable	(X)
Increase in misc. expense payable	X
Decrease in un-earned revenue	(X)
Increase in tax payable	X
Decrease in deferred income tax liability	(X)
Net cash provided from operating activities	X
Cash flows from investing activities:
Sale of equipment	X
Purchase of equipment	(X)
Overhauling of equipment	(X)
Sale of marketable securities	X
Net cash used by investing activities	X
Cash flows from financing activities:
Payment of notes payable (Long-term)	(X)
Sale of treasury stock	X
Sale of common stock	X
Dividend paid	(X)
Net cash flows from financing activities	X
Net increase in cash	X
Cash at beginning of year	X
Cash at end of year	X

Read More

Financial Statements that a company needs to disclose.

A Company needs to disclose the following Financial Statements:-

(i) Statement of Financial Position / Balance sheet.
(ii) Statement of Comprehensive Income / Income Statement.
(iii) Statement of Changes in Equity.
(iv) Statement of Cash Flows.

Read More

Levered Firm and Unlevered Firm

Levered Firm :- A  firm that uses a percentage of debts in its capital structure to finance its business is called a Levered Firm. It uses Equity and Debts for doing business.

Unlevered Firm :- A  firm that does not use debts in its capital structure to finance its business is called an Unlevered Firm. It does not use loans for doing business. It depends on Equity funds only.

Read More

Capital Budgeting Techniques.

The following techniques are used in Capital Budgeting :-
1) Pay Back Period (PBP).
2) Discounted Pay Back Period (DPBP).
3) Net present Value (NPV).
4) Internal Rate of Return (IRR).
5) Modified Internal Rate of Return (MIRR).
6) Profitability Index (PI).
7) Accounting / Average Rate of Return (ARR).

Read More

What are the five R's in material management.

There are five R's in material management. Each R stand for -

i) Right Time.

ii) Right Place.

iii) Right Price.

iv) Right Quantity and

v) Right Quality.

Read More

Types of Inventories.

For Manufacturing Business :-
Manufacturing firms purchase the raw materials and convert the raw materials into finished goods. So they have three types of inventories. Which are -

(i) Raw materials.
(ii) Work In Process. and
(iii) Finished goods.

For a Merchandising Business :-
Merchandising Firms are engaged in a business where they purchase goods and sell them again. They do only buy and sell, they do not make the product. They have only one inventory which is simply called inventories.

Read More

Which Inventory method Results tax gain when the price of raw materials is high.

Last In First Out (LIFO) is the inventory method that creates tax gain when raw material price is increasing day by day. It works in the following way :-
In LIFO we issue materials at the latest entered price, that means materials entered last should be issued first. So in that way materials at high price issued first. This will increase Cost Of Goods Sold (CGS/COGS) and decrease Gross Profit which leads to a Tax reduction.

Read More

Some Basic Assumptions for Financial Calculations.

1 Year = 360 Days.
1 Year = 52 Weeks.
1 Year = 4 Quarter (Each 3 months makes a Quarter).
1 Year = 12 Months.

For Interest Disbursements Calculation:-
10% interest means the interest of BDT 100 is BDT 10 for One year.
Yearly means one time in a year.
Semi annual means two times in a Year.
Quarterly means four times in a year.

Read More

What are the sources of Finance.

Generally there are two sources of finance in a business, Which are - Internal and External.

Internal Sources:-
i) Owner's Capital.
ii) Retained Earnings.
iii) Reserve and Surplus.
iv) Accrued expenses.
v) Provident Fund.

External Sources:- 
i) Loans From Commercial Banks
ii) Loans from insurance Companies.
iii) Loans from Finance Companies.
iv) Leasing Companies.
v) Bond / Debenture Issue.

 

Read More

Items in a Balance Sheet (Sample)

                     XYZ Company
                     Balance Sheet
                    As at XX-XX-20XX

ASSETS	BDT
Non-current assets
Property, plant and equipment (Net)	X
Investment	X
Total non-current assets	X
Current assets
Inventories	X
Trade and other receivables	X
Cash and cash equivalents	X
Total current assets	XX
Total assets	XXX
EQUITY AND LIABILITIES
Capital and reserves	X
Ordinary share capital	X
Share premium	X
Revaluation reserve	X
Retained earnings	X
Total capital and reserve	XX
Non-current liabilities
Interest-bearing borrowings	X
Current liabilities
Trade and other payables	X
Provisions	X
Accruals	X
T ax liability	X
Total current liabilities	XX
Total equity and liabilities	XXX

Read More

Income Statement Sample

This is a sample Income statement, company name and all the figures are Imaginary.

                      XYZ Company

                   Income Statement

              For the year ended 20XX 

         Particulars                               BDT               BDT

Sales ----------------------------------------------------------------- 100

Less: Sales Return------------------------------02

         Sales discount----------------------------01---------------03

Sales (Net)------------------------------------------------------------97

Less: Cost of goods sold---------------------------------------30

_________________________________________________________________

Gross Profit-----------------------------------------------------------67

Less: Operating Expenses:

        Administrative Expenses:

        Office Salaries------------------------------01

        Insurance Expense-----------------------01

        Utility Expense-----------------------------01

        Depreciation of Office Building--------01

        Depreciation of Office Furniture-------01

        Depreciation of Office Equipment-----01

        Miscellaneous Office Expense--------01

        Office supplies Expense----------------01-----------------08

        Selling and Marketing Expenses:

        Sales salaries and commissions--------01

        Depreciation on Sales equipment-------01

        Traveling Expense----------------------------01

        Advertising Expense-------------------------01

        Entertainment Expense--------------------01

        Telephone Expense--------------------------01-------------06

_____________________________________________________________________

Income from Operations:--------------------------------------53

Other Revenues and Gains:

        Dividend Income-----------------------------02

        Rent Income----------------------------------01

        Interest Income------------------------------02--------------05

______________________________________________________________________

Other Expenses and losses:

        Interest on Bonds------------------------------02

        Interest on Notes------------------------------01------------03

_______________________________________________________________________

Income before Tax:------------------------------------------------55

       Income Tax-------------------------------------------------------20

________________________________________________________________________

Net Income: ----------------------------------------------------------35

       

Read More

Calulation of Earning Per Share (EPS).

Earning Per Share (EPS) :- EPS is calculated by the following way-

Dividing Earnings available to common stockholders by No. of Common Share outstanding.

EPS= Earnings available to common stockholders/No. of Common Share outstanding

Where,

 Earnings available to common stockholders = Net Income - dividend on Preference share.
 No. of Common Share outstanding = Total Share Issued - Treasury Shares.

Example:- XYZ a company has 1,10,000 issued common shares. During the year the company's net income is BDT 10,00,000 and pays BDT 2,00,000 as dividend on Preference shares. It has 15,000 shares as treasury stock. Calculate Earning Per Share.

Solution:-

EPS = BDT(10,00,000-2,00,000)/95,000
       = BDT 8.421

Read More

Post Graduate Diploma (PGD) On Business Studies in Bangladesh.

Bangladesh Institute of Management (BIM) offers Post Graduate Diploma (PGD) courses on various subjects in Bangladesh, It is an Institution under Ministry of Industries. It offers Post Graduate Diploma (PGD) on:-

• Human Resource Management (PGDHRM).
• Industrial Management (PGDIM).
• Financial Management (PGDFM).
• Marketing Management (PGDMM).
• Computer Science (PGDCS).

Read More

Some Acronym and Abbreviation in Business Studies (Bangladesh Context).

ABBD- Association of Bankers Bangladesh Limited.
ACA- Associate Chartered Accountant.
ACMA- Associate Cost and Management Accountant.
ACS- Associate Company Secretary.
BAB- Bangladesh Accreditation Board.
BDT- Bangladeshi Taka.
BO Account- Beneficiary Owners Account.
BGMEA- Bangladesh Garment Manufactures and Exporters Association.
BKMEA- Bangladesh Knitwear Manufacturers and Exporters Association.
BOI- Board Of Investment.
BSEC- Bangladesh Securities and Exchange Commission.
BEPZA- Bangladesh Export Processing Zone Authority.
BIM- Bangladesh Institute of Management.
BIBM- Bangladesh Institute of Bank Management.
BB- Bangladesh Bank.
BIWTA- Bangladesh Inland Water Transport Authority.
CDBL- Central Depository Bangladesh Limited.
CRAB- Credit Rating Agency of Bangladesh Ltd.
CSE- Chittagong Stock Exchange.
DC- Deputy Commissioner.
DSE- Dhaka Stock Exchange.
ECNEC- Executive Committee of National Economic Council.
EPZ- Export Processing Zone.
EPB- Export Promotion Bureau.
FBCCI- Federation of Bangladesh Chambers of Commerce and Industry.
FCA- Fellow Chartered Accountant.
FCMA- Fellow Cost and Management Accountant.

FCS- Fellow Company Secretary.
ICB- Investment Corporation of Bangladesh.
ICAB- Institute of Chartered Accountants of Bangladesh.
ICMAB- Institute of Cost and Management Accountants of Bangladesh.
ICSB- Institute of Chartered Secretaries of Bangladesh.
ITP- Income Tax Practitioner.
ITO- Income Tax Ordinance.
JV- Joint Venture.
MFI- Micro Finance Institution.
NBFI- Non Bank Financial Institutions.
NBR- National Board of Revenue.
NRB- Non Resident Bangladeshi.
NGO- Non Government Organization.
PPP- Public Private Partnership.
RJSC- Registrar of Joint Stock Companies.
RDCD- Rural Development and Cooperative Division.
SCB- State owned Commercial Banks.
SME- Small and Medium Enterprise.
TB- Treasury Bill.
TIN- Taxpayer's Identification Number.
VAT- Value Added Tax.
 

Read More

Business Laws in Bangladesh.

Some of the Laws that are regulating business in Bangladesh are given below:-

• The Banking Companies Act, 1991.
• The Bills of Lading Act, 1856.
• The Bangladesh Labor Code, 2006.
• The Bangladesh Small and Cottage Industries Corporation Act, 1957.
• The Bangladesh Standards and Testing Institution Ordinance, 1985.
• The Custom Act, 1969.
• The Companies Act, 1994.
• The Contract Act, 1872.
• The Consumer-Right Protection Act, 2009.
• The Depository Act, 1999.
• The EPZ Workers Association and Industrial Relations Act, 2004.
• The Financial Institutions Act, 1993.
• The Imports Exports (Control) Act, 1950.
• The Income Tax Ordinance, 1984.
• The Money Laundering Prevention Act, 2009.
• The Negotiable Instruments Act, 1881.
• The Partnership Act, 1932.
• The Securities Act, 1920.
• The Securities and Exchange Ordinance, 1969.
• The Value Added Tax Act, 1991.

Read More

Chartered Secretaries Education in Bangladesh.

The Institute Of Chartered Secretaries Of Bangladesh (ICSB) is the only professional body in the field of corporate sectaries education in Bangladesh. It is established under the Chartered Sectaries Act 2010. One who successfully complete the prescribed course is Preliminary called ACS and finally FCS.

Read More

Professional Accounting courses in Bangladesh.

We have two Professional Accounting bodies in Bangladesh under Ministry of Commerce. One is - The Institute of Cost and Management Accountants of Bangladesh (ICMAB) and another one is - The Institute of Chartered Accountants of Bangladesh (ICAB). A Qualified person from ICMAB is called a Cost and Management Accountant and a qualified person from ICAB is called a Chartered Accountant.

Read More

Some Acronym and Abbreviation in Business Studies (Accounting).

AI-Advanced Income Tax. 
AOA- Articles Of Association.
ABC- Activity Based Costing.
AY- Accounting Year / Assessment Year.
BS- Balance Sheet.
BOM- Bill Of Material.

CA- Current Asset.
CL- Current Liability.

COGS/CGS- Cost Of Goods Sold.
EOQ- Economic Order Quantity.
EAT- Earning After Tax.

EBT- Earning Before Tax.
EBIT- Earning Before Interest And Tax.
FA- Fixed Asset.

FIFO- First In First Out.
FC- Fixed Cost.
FY- Financial Year.
GP- Gross Profit.

IAS- International Accounting Standard.
IS- Income Statement.
IY- Income Year.
JIT- Just In Time.

LIFO- Last in First Out.
MOA- Memorandum Of Association.
NAV- Net Asset Value.
NI- Net Income.
NP- Net Profit.
NOI- Net Operating Income.
NRV- Net Realizable Value.
OD- Over Draft.
PPE- Plant Property Equipment.
POS- Point Of Sale.
SLM- Straight Line Method (Method of Depreciation)
SE- Shareholders Equity.
VAT- Value Added Tax.
VC- Variable Cost.
WIP- Work In Process.
WDV- Written Down Value.

Read More

Some Acronym and Abbreviation in Business Studies (Finance).

ARR- Average Rate Of Return/ Accounting Rate Of Return.
APR- Annual Percentage Rate. / Absolute Priority Rule.
APT- Arbitrage Pricing Theory.
APV- Adjusted Present Value.
APP- Average Payment Period.

ACP- Average Collection Period.
ACH- Automated Clearing House.
ATM- Automated Teller Machine.
BEP- Breaking Even Point.
BV- Book Value.
CML- Capital Market Line.
CAR- Cumulative Abnormal Return.
CBT- Chicago Board of Trade.
CM- Contribution Margin.
CP- Commercial Paper.
CRR- Cash Reserve Ratio.
CCC- Cash Conversion Cycle.
CD- Certificate Of Deposit.

CAPM- Capital Asset Pricing Model.
CFA- Certified Financial Analyst.
CFO- Chief Financial Officer.
DD- Demand Draft.
DDM- Dividend Discount Model.
DOT- Designated Order Turnaround.
DPBP- Discounted Pay Back Period.
DOL- Degree Of Operating Leverage.
DFL- Degree Of Financial Leverage.
DCL- Degree Of Combined Leverage.
DCF- Discounted Cash Flow.
EVA- Economic Value added.
EAY- Effective Annual Yield.
EAC- Equivalent Annual Cost.
EFT- Electronic Fund Transfer.
EBDT- Earning Before Depreciation And Tax.
EBITDA- Earning Before Interest, Tax, Depreciation and Amortization.
EMI- Effective Monthly Installment.
EMH- Efficient Market Hypothesis.
EAR- Effective Annual Rate.
EPS- Earning Per Share.
EFN- External Financing Needed.
FM- Financial Management.
FC- Foreign Currency.
FLM- Financial Leverage Multiplier.
FCF- Free Cash Flow.
FDI- Foreign Direct Investment.
FV- Future Value.
FVA- Future Value Annuity. 
FTE- Flow To Equity.
GDP- Gross Domestic Product.
GNP- Gross National Product.
IFE- International Fisher Effect.
IRA- Individual Retirement Account.
IRP- Interest Rate Parity.
IRS- Internal Revenue Service.
IRR- Internal Rate Of Return.
IPO- Initial Public Offering.
IOS- Investment Opportunity Schedule.
LC- Letter Of Credit.
LCF- Levered Cash Flow.
LLC- Limited Liability Company.
LBO- Leveraged Buyouts.
LIBOR- London Inter Bank Offered Rate.
MRP- Materials Requirement Planning.
MOE- Mergers Of Equals.
MOM- Middle Of Month.
MIRR-  Modified Internal Rate Of Return.
MACRS- Modified Accelerated Cost Recovery System.
MV-  Market Value.
NNP- Net National Product. 
NAL- Net Advantages of Leasing.
NPV- Net Present Value.
NWC- Net Working Capital.
OCF- Operating Cash Flow.
OC- Operating Cost / Operating Cycle.
OTC- Over The Counter.
PBP- Pay Back Period.
PO- Pay Order.
PI- Profitability Index.
P/E- Price/Earning.
P/E- Price Earning.
PV- Present Value.
PVA- Present Value Annuity.
RADR- Risk Adjusted Discount Rate.
ROI- Return On Investment.
ROE- Return On Equity.
ROA- Return On Asset.
SAIR- Stated Annual Interest Rate.
SEC- Securities and Exchange Commission.
SLR- Statutory Liquidity Ratio.

SML- Security Market Line.
SWIFT- Society for Worldwide Interbank Financial Telecommunications.
TRACE- Trade Report And Compliance Engine.
TVM- Time Value Of Money.
WACC- Weighted Average Cost Of Capital.
WC- Working Capital.
YTM- Yield To Maturity.
ZBA- Zero Balance Account.

Read More