Very Useful Ratio analysis

		FORMULAS	IMPACT IF	IMPACT IF
			HIGH	LOW
	I. LIQUIDITY RATIOS	To know the Unit's ability to meet the short term liabilities
	1. CURRENT RATIO	Current Assets	High level of Inventory/ book	Unable to pay
		/Current Liabilities	debts	Creditors
	2. QUICK RATIO	(Current Assets –	Idle Funds	Strain on Liquidity
		Inventory- prepaid
		expenses) /
		Current Liabilities )
	GROSS WORKING	Total Current Assets (TCA)
	CAPITAL (NWC)
	NET WORKING CAPITAL	Current Assets – Current Liabilities
	(NWC)
	WORKING CAPITAL GAP	Current Assets – Current Liabilities other than Bank borrowings (short)
	(WCG)
	II. SOLVENCY	To measure the relationship between borrower's owned funds and
	(LEVERAGE) RATIOS	borrowed funds.
		Indicates size of stake, stability and degree of solvency.
	NET WORTH (NW)	Capital + Reserves + Profits or - Loss
	TANGIBLE NET	Net worth –
	WORTH(TNW)	Intangible Assets
	ADJUSSTED TANGIBLE	Tangible Net Worth –	IMPACT IF	IMPACT IF
	NET WORTH (ATNW)	Investments in	HIGH	LOW
		Subsidiary and
		affiliates
	1. TOL/TNW	Total Out Side	Higher ratio indicates increased	Low is good and
		Liabilities	dependence on borrowings and	too much low is
		(Total liabilities – Net	other liabilities.	alos not good. It
		worth) /		indicates
		Tangible Net Worth	Low Stake	Unable to get
				Credit
	2. TOL/ATNW	Total Out Side
			Over Trading	High Capital
		Liabilities
				gearing
		(Total liabilities – Net
				Conservating
		worth) /
				Management
		Adjusted TNW
	3. DEBT-EQUITY RATIO	Long Term	Indicates the proportion of	Anything below 2
		Loans/Net Worth	owners’ stake to that of the	is normally
			outsiders, in the long term	considered good.
			sources of the company.
			Anything over 2 is not normally
			considered good.
	4. GROSS DSCR	Net Profit +	Debt can be serviced faster	Repayment
		Depreciation + Int.	( Repayment capacity of loan is	obligations strains
		On T/L /	good)	resources
		T/L Installment + Int.
		On T/L
	5. NET DSCR	Net Profit + Depreciation (Cash accruals) /
		T/L Installment

		FORMULAS	IMPACT IF	IMPACT IF
			HIGH	LOW
	III. ACTIVITY RATIOS	Measures the Unit's efficiency in turning its inventory into sales and
		efficiency with which the debtors are turned over into cash.
	1. Inventory Turnover Ratio	Cost of Sales/	Brisk Sales	Obsolete Stock
	(times)	Average Inventory		Market Problem
		(Opening Stock +		Poor Demand
		Closing Stock/2 =
		Avg. Inventory)
	2. Inventory Velocity	Average Inventory/	Higher the figure, the slower is the turnaround of
	(Holding level) in Days	Cost of Sales(Cost of	current asset and in general higher the risk
		good sold) x 365
	3. Debtors Turnover Ratio	Net Credit Sales /	Cautious trading	Unable to collect
	(times)	Avg. Trade Debtors		debt
	4. Debtors Velocity	Avg. Trade	indicates the number of days	The company has
	(Holding level) (Debt	Debtors/Net Credit	credit given by the company as	an efficient
	Collection period) in Days	Salesx365	on the date of the balance sheet.	collection
			A high figure indicates sales on	mechanism
			easy terms.	Prompt payment
			Unable to collect debt	by customers
				The company is
				able to dictate
				terms due to good
				quality of its
				product.
	5. Creditors Turnover Ratio	Net Credit Purchases/	Poor Management	Unable to pay the
	(times)	Avg. Trade Creditors	Demand Product	creditors
	6. Creditors Velocity	Average Creditors/	Indicates number of days credit	the company is
	(Holding level) in days	Net Credit Purchases	received by the company, as on	adequate funds to
		X 365	the date of the balance sheet.	meet the Creditors
				Creditors are not
			Unable to pay the creditors or	allowing more time
				it is also called poor
			creditors are allowing more time
				management.
			due to its good financial	Demand Product
			reputation
	7.Holding level for Raw	Avg.RM Inventory/	To know the holding period (no. Of days of Raw
	Materials	Cost of RM	Materials, SIP and FG in an Operating Cycle. ( Efficiency in
		consumed x 365	maintenance of Inventory)
		RM Consumed =	The nature and availability of raw materials should be
			examined to correctly interpret the ratio.
		(Op.RM + RM
			High days indicates
		Purchases – Clg. RM)
			a) indiscreet buying b) presence of unsaleable stocks
			seasonal stocking
	8.Holding level for Stock in	Avg.SIP Inventory/ Cost of Production x 365
	process
	9.Holding level for  F.G.	Avg.F.G. Inventory/ Cost of Sales x 365

		FORMULAS	IMPACT IF	IMPACT IF
			HIGH	LOW
	IV.PROFITABILITY	To assess a Unit's ability to generate earnings
	RATIOS
	1. PBDIT	Profit before
		Depreciation, Interest
		and Tax
	2.PBDIT/INT (Interest	PBDIT/Interest	Int. Servicing capacity is good	Int. Servicing
	Coverage Ratio - ICR)			capacity is low.
	3.PAT/NET SALES %	Profit after tax/ Net	Profit % is good. Indicates	Indicates operating
		Sales x 100	operating efficiency	inefficiency

 

	PROFITABILITY RATIOS	FORMULAS	IMPACT IF	IMPACT IF
			HIGH	LOW
	4.PAT/Net Worth	Profit after tax/ Net	the owner’s funds have invested	the owner’s funds
		worth	profitably.	have
			To be compared with the ratio in	been not invested
				profitably.
			similar units.
	5. Expenses/Sales %	Operating	Trend for the company over a	Indicates efficiency
		Expenses/Sales x 100	period is to be examined.	As years go by
			If high it indicates Operating	sales should
			inefficiency.	increase without a
				corresponding
				increase in
				expenses
	6. Retained Profit/PAT %	Retained Profit/	Indicates prudence of the managers in conserving
		Profit after Tax x 100	financial resources and long term strategies of the
			unit.
	7. PBDIT/Total Assets	Profit before	This ratio is a measure of gross profitability or gross
		Dep+Int+Tax/ Total	return from the activity of the company. A
		Assets	percentage of more than 10 is considered healthy
			whereas below 2 is considered risky.
	8.OPM %( OP/NS %)	Operating Profit/ Net Efficiency in operating the unit		Low performance
		sales x 100	Should be comparable with	in operating
			similar industries
	9.PBT/Net Sales%	Profit before Tax/	Indicates operating efficiency	indicates operating
		Net Sales x 100		inefficiency
	10.Cash Accruals	PAT ( Net Profit) +
		Depreciation
	11.Net sales to Total	Net Sales /	Efficient utilization of assets	Idle/underutilized
	Tangible Assets (times)	(Total Assets –		assets
		Intangible Assets)
	12.PBT to Total Tangible	Profit before Tax/
	Assets (%)	(Total Assets –
		Intangible Assets)
	13.Interest/Cost of sales	Interest/ Cost of	Interest burden is more	Interest burden is
		Sales		less

	PROFITABILITY RATIOS	FORMULAS	IMPACT IF	IMPACT IF
			HIGH	LOW
	14.ROE% ( Return on	PAT*100 / Net worth
	Equity)	(Owners' funds)	Efficient utilization of assets	Idle/underutilized
				assets or Heavy
				Capital investment
	14.ROI% ( Return on	PBIT *100 / Debt +
	Investment)	Equity
	15.ROCE or ROA (Return	PBDIT *100/ (Total
	on capital employed or	Assets - Intangible
	Return on Assets)	Assets)
	V. STOCK EXCHANGE RATIOS (EFFICIENCY RATIOS)
	Ratio	Formula	Impact
	1. EPS (Earning per Share)	PAT/No. Of Shares	Indicates to what extent income is available per
			share, to pay dividend.
	2. Price Earning Ratio (P/E	Market Price per
	Ratio)	Share /
		Earning Per
		Share(EPS)
	3. Earning- Yield Rate	Earning Per Share	Assesses annual income accruing from the share
		(EPS)/	investment
		Market Price per
		Share
	4. Payout Ratio (Earnings -	PAT/ Total Dividend	Indicates the dividend paid to the net income.
	cover Ratio)	Paid
	5. Dividend-yield Rate	Dividend per	Enables comparison of Dividend policy and yield
		Share/Market price
		of Shares x 100

QUICK RATIOs

S.No.	Ratio	Formula
1	CURRENT RATIO	Current Assets /Current Liabilities
2	QUICK RATIO	(Current Assets – Inventory- prepaid expenses) /
		Current Liabilities )
3	NET WORKING CAPITAL	Current Assets – Current Liabilities
	(NWC)
4	TANGIBLE NET	Net worth – Intangible Assets
	WORTH(TNW)
5	ADJUSSTED TANGIBLE	Tangible Net Worth – Investments in Subsidiary and
	NET WORTH (ATNW)	affiliates
6	TOL/TNW	Total Out Side Liabilities
		(Total liabilities – Net worth) /
		Tangible Net Worth
7	TOL/ATNW	Total Out Side Liabilities
		(Total liabilities – Net worth) /
		Adjusted TNW
8	DEBT-EQUITY RATIO	Long Term Loans/Net Worth
9	GROSS DSCR	Net Profit + Depreciation + Int. On T/L /
		T/L Installment + Int. On T/L
10	NET DSCR	Net Profit + Depreciation (Cash accruals) /
		T/L Installment
11	Inventory Velocity	Average Inventory/
	(Holding level) in Days	Cost of Sales(Cost of good sold) x 365
12	Debtors Velocity (Holding	Avg. Trade Debtors/Net Credit Salesx365
	level) in Days
13	Creditors Velocity (Holding	Average Creditors/
	level) in days	Net Credit Purchases X 365
14	Holding level for Raw	Avg.RM Inventory/
	Materials	Cost of RM consumed x 365
		RM Consumed = (Op.RM + RM Purchases – Clg. RM)
15	Holding level for Stock in	Avg.SIP Inventory/ Cost of Production x 365
	process
16	Holding level for  F.G.	Avg.F.G. Inventory/ Cost of Sales x 365
17	Operating Cycle Period	(Invertory days + Debtors days – Creditors days)
18	Interest Coverage Ratio	PBDIT/INT

BREXIT

BREXIT
The European Union - often known as the EU - is an economic and political partnership involving 28 European countries. It began after World War Two to foster economic co-operation, with the idea that countries which trade together were more likely to avoid going to war with each other.It has since grown to become a "single market" allowing goods and people to move around, basically as if the member states were one country. It has its own currency, the euro, which is used by 19 of the member countries, its own parliament and it now sets rules in a wide range of areas including on the environment, transport, consumer rights and even things such as mobile phone charges.
Brexit is derived from two words: Britain and Exit indicating the exit of Britain from European Union. In June 2016, Britain voted in favour of a referendum to exit the European Union.For the UK to leave the EU it had to invoke Article 50 of the Lisbon Treaty which gives the two sides two years to agree the terms of the split. Theresa May triggered this process on 29 March, 2017, meaning the UK is scheduled to leave at 11pm UK time on Friday, 29 March 2019.
The main point of having a deal between the UK and the EU is to ensure as smooth as possible an exit from the EU for businesses and individuals - and to allow time for the two sides to hammer out a permanent trading relationship. If no deal is finalized, it will be called no-deal Brexit

Jaiib/caiib 2020 schedule

*Notification for JAIIB/CAIIB Registration - May/June 2020*
---------------------------------------------------------
*JAIIB - REGISTRATION FEES*
----------------------------------------------------------       
From 24.02.2020 to 01.03.2020 - Normal Exam fees
From 02.03.2020 to 15.03.2020 - Normal Exam fees plus Rs 100/-
From 16.03.2020 to 22.03.2020 - Normal Exam fees plus Rs 200/-

*JAIIB : EXAM DATES*
-------------------------------------
03-05-2020 - Principles & Practices of Banking
10-05-2020 - Accounting & Finance for Bankers
17-05-2020 - Legal & Regulatory Aspects of Banking

*CAIIB - REGISTRATION FEES*
-----------------------------------------------------
From 01.04.2020 to 07.04.2020 - Normal Exam fees
From 08.04.2020 to 21.04.2020 - Normal Exam fees plus Rs 100/-
From 22.04.2020 to 30.04.2020 - Normal Exam fees plus Rs 200/-

*CAIIB - EXAM DATES*
--------------------------------------
07-06-2020 - Advanced Bank Management
14-06-2020 - Bank Financial Management
21-06-2020 - Elective Paper

Budget 2020

*Budget 2020 key highlights*

* GST bring synergy in logistics sector (20% time reduction)
* 60 lakhs new taxpayers added via GST introduction
* New simplified GST returns from April 2020
* FDI elevated during period 2014-2019 to $284bn
* Central government debt reduced to 48.7% of GDP in 2019
* 16 points action plan for agricultural & irrigation sector under aspirational India
* New Education Policy will be announced soon
* ECB and FDI will open in education sector
* Degree level full fledged online programs to be started
* National Police University & Forensic university is proposed to be set up
* INR 99,300 cr proposed for education sector
* Investment clearance cell to be set up to facilitate investments and to provide advisory at State as well as Centre level
* 5 new smart cities to be developed
* Move to develop each district an export hub
* INR 27,300 cr for promotion of industry & commerce
* National logistics policy to be released soon
* Digital refund of duties to exporter
* Setting up of solar panels on barren lands
* More Tejas types train to be introduced to connect iconic cities
* 100 more Airports to be developed by 2024
* Proposed to states to replace old electric meters to the smart pre-paid electric meters. This will give flexibility to consumer to choose service provider.
* INR 22,000 cr proposed for power & renewal energy sector
* Private sectors to built data centre parks throughout the country, policy may come soon
* INR 6,000 cr proposed for 'Bharat Net'
* Funding for ideation and start up
* INR 28,600 cr proposed in this budget specific to women
* Proposed to set up Indian Institute of Heritage & culture as a deemed university
* 5 Archeological sites would be developed as iconic sites with onsite museums
* Setting up of Tribal Museum in Ranchi, Jharkhand
* INR 2,500 cr proposed for development of Tourism sector
* Taxpayer's charter to be a part of statute to build confidence/trust
* Government will ensure that citizens need not worry about tax harassment. There is a debate on building criminal liabilites for civil acts. Companies Act will be amended to correct this
* India to host G20 presidency in 2022; INR 100 cr allocated for preparation
* Robust mechanism is in place to monitor health of all scheduled banks
* Insurance cover for deposits increased from INR 1 lakh to 5 lakh
* Universal pension coverage with auto enrollment to be introduced (through PFRDI) to every person
* Invoice financing by NBFCs to MSME sector - Amendments to be made in Factoring Act
* Certain amendments to be made in SARFESI Act
* Non residents can invest in certain Government securities
* Liquidity constraints of NBFCs & HFCs will be addressed - Government has taken steps from last year
* International Buillion exchange to be setup in GIFT IFSC
* LIC initial public offer will come to list on stock exchange; Government will sell part of its holding

*Part-B - Tax Proposals*

* Personal income tax - proposed to bring new income-tax regime for individual Taxpayer's
New slab rate (without exemption)
10% - income  5 - 7.5 lakhs
15% - 7.5 - 10 lakhs
20% - 10 - 12.5 lakhs
25% - 12.5 - 15 lakhs
30% - Above 15 lakhs

Income upto 5 lakhs no tax, says FM

* if individual ears income of 15 lakhs then tax would be 1.95 lakh vis-a-vis 2.73 lakhs as earlier

* New scheme of individual tax rates is optional
* FM says - reviewed all existing income tax exemptions and removed 70 of them in new regime and will review remaining and rationalize
* Propose to remove DDT and dividend would be taxable in the hands of shareholders; removal of cascading effect of dividend distributed by holding to subsidiary (25k cr revenues forgone on account of DDT abolishion)
* Concessional tax rate for electricity/power generation companies
* 100% tax exemption on new investment by foreign funds in infrastructure sector by 2024 with a minimum lock in period of 3 years
* ESOPs given by startups to employees currently taxed as perquisites; deffering of tax payment by employees to 5 years
* Increase in turnover limit from 25 cr to 100 cr for startups
* Deduction can be claimed by startups upto 10 years
* Tax audit turnover threshold limit increased from 1 cr to 5 cr
*  Concessional 5% withholding tax has been extended  to municipal bonds. Cooperatives are taxed at 30 percent now. Cooperatives can choose a 22 percent tax with 10 percent surcharge and 4 percent cess with no exemptions.
* Complete online registration of charitable institutions
* Faceless appeals on the line of faceless assessment
* Vivad se Vishwas Scheme introduced - New direct tax dispute settlement scheme
* More than 4.83 lakhs cases pending at various forums
* Taxpayer's need to pay only disputed amount of tax (no penalty be charged) by March 2020; scheme will be available till June 2020 but some additional payment to made in-addition to tax
* CBDT to adopt Taxpayer's charter
* PAN shall be instantly allotted on the basis of Aadhar without any filling up of form
* Personal interface with tax administrators will be at minimum level
* GST reforms will continue including a simplified return-filling form. FM says, refund has been simplified and has been fully automated.