Financialstatement is largely a relationship among various financial factor in abusiness as disclosed by single set of statement and study of trend disclose ina series of statement. There arecertain investing and financing transaction which do not involve cash or cashequivalents are called non cash transaction. Debenture isan acknowledge ment of debt taken by the company under its common seal andconstituting a contract for payment of principal sum on specific date andpayment of interest at fixed rate till the principal sum is repaid The goodswhich remain unsold at the end of accounting tear is known as consignment stock.consignment stock is calculated to determine the current profit or loss fromconsignment if it does not calculated the firm does not show show true profitor loss. Profitabilitymeans the ability of the firm to earn profit..the main aim of the business isto earn profit. The profit not only keeps the business running but also helps in its development and expansion . the owner anticipate return for the capital employed ,employees depend on their wages. Followingratios calculated under it 1- On the basis of sales Gross profit ratio. Net profit ratio Operating expenseratio.. 2..on the basis of investment Earning per share.. Return on capitalemployed.. Liquidy ratio-liquidty means the ability of the firm to meet out its current liabilities out ofcurrent assets.liquidity ratio is calculated to calculate the short term solvency of the enterprise,creditors byexamine comes to know about the liquidity position of enterprise for securityof their loan to the firm. Following ratio are calculated under it 1.current ratio 2.quick ratio 3.absolute liquid ratio q.what is goodwill?When valuation of goodwill takes place? Answer – goodwill is a thing about which easy to describe butdifficult to define ,it is the benefit or advantage of good name reputation andconnection of business.it is that attractive force which brings in customer andhelps in increasing profit. Need of valuation of goodwill. Goodwill can be valued in following circumstances. 1.on admission of new partner 2.on retirement of old partner. 3.on death of existing partner. 4.on amalgamation of two firms 5.when a firm is converted in to company
Posted on: Thu, 16 Oct 2014 05:17:52 +0000
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