Final Accounts

AFTERSCHO☺OL
– DEVELOPING CHANGE MAKERS CENTRE FOR SOCIAL ENTREPRENEURSHIP PGPSE PROGRAMME – World’ Most Comprehensive programme in social entrepreneurship & spiritual entrepreneurship OPEN FOR ALL FREE FOR ALL

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Final Accounts
Dr. T.K. Jain.

AFTERSCHO☺OL
Centre for social entrepreneurship Bikaner M: 9414430763 tkjainbkn@yahoo.co.in www.afterschool.tk, www.afterschoool.tk
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What is commonsize statement?
• When you treat the total assets as 100 and find each asset / liability as % , it is called common size balance sheet. • Similarly, when you treat net sale as 100 and find each income or expenses as %, it is called common size profit and loss statement. • Common size statements allow you to udertake analysis of the statements and compare them.

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COMMONSIZE STATEMENT

• SEE THE MICROSOFT BALANCE SHEET FO

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Commonsize statement
• Analyse for wipro tcs and infosys

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Trend analysis
• Here we take the base year figures as 100 and try to find out the values for the next year and try to interpret the change / trend.

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DU PONT ANALYSIS
• • • • • ROI WHICH IS OUTCOME OF : Net profit ratio * capital turnover Net profit ratio = net profit / sales Capital turnover ratio = sales / capital

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The basic equation…
• Assets = Liabilities • If there will be increase in assets, there will also be an increase in liabilities. • The net impact of each accouting transaction should result in Assets = liabilities

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Example:
• If there is increase in capital, what must happen? • Suppose capital increases by Rs. 10000, there is increase in liabilities by 10000. thus with this there should also be increase in assets. Thus we have to find out another item (from assets side), which should increase simultaneously.
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How do you denote them?
• Assets are denoted as debits and liabilities are denoted as credits (credit means confidence, and someone will give you money only if he has confidence on your business).

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Three rules…
• Real account (assets) • Debit what comes in (because it is an asset). • Credit what goes out (because asset is reducing) • Personal account (account of firms and individuals) • Debit the person to whom we have given something • Credit the person from whom we have taken something (as hemay increase or liability or reduce our asset)
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Fundamentals…
• Nominal account (income and expenditures) • Debit all expenses • Credit all income

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Assets…
• • • • • • Liquidity order (cash first and goodwill last) Permance order (goodwill first and cash last) Freehold land : (it is never depreciated) Leasehold land ( it is depreciated) Building Plant and machinery (includes installation charge, second hand machine repair – before installation, increasing capacity, ) • Tools, spares • Furniture and fixtures • Vehicle
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Intangible assets…
• • • • • • Computer software Copyright Trademark Knowhow Goodwill R&D

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Fictitious assets…
• Preliminary expenses • Expenses

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Current assets…
• • • • • • • • • • Cash Bank Bill receivable Debtors ( proper classification) Stock (FIFO & weighted average) Short term investmnetns (upto 1 years) Prepaid expenses Earned income Loans and advances (to staff, Deferred tax
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Other assets…
• Capital work in progress • Investments (more than 1 year)

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LIABILITY ..
• SHARE CAPITAL (authorised, issued,subscribed,, paidup) • Reserve and surplus (capital reserve, general, redemption reserve, revaluation reserve) + capital subsidy • Preference share (only redeemable are allowed) convertible are allowed • Security received • Debentures
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Reserves / provisions
• Provision is for specific purpose • Reserve is general – can be used for other purpose • Provision is charged to P & L acccount • Reseve is appropriation of profit

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Loans…
• Secured • Unsecured

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Current liabilities …
• • • • • Creditos Bill payable Bank overdraft Outstanding expenses Deferred tax

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Contingent assets / liabilities…
• As a note below balance sheet • Only contingent liabilities are shown in note. • Contingent assets are not shown. • Example: any pending law suit etc.

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About AFTERSCHO☺OL
• PGPSE - World’s most comprehensive programme on social entrepreneurship – after class 12th • Flexible – fast changing to meet the requirements • Admission open throughout the year • Complete support from beginning to the end – from idea generation to making the project viable.
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Branches of AFTERSCHO☺OL
• PGPSE programme is open all over the world as free online programme. • Those who complete PSPSE have the freedom to start branches of AFTERSCHO☺OL • A few branches have already started one such branch is at KOTA (Rajasthan).

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Workshop on social entrepreneurship
• We conduct workshop on social entrepreneurship – all over India and out of India also - in school, college, club, association or any such place - just send us a call and we will come to conduct the workshop on social entrepreeurship. • These workshops are great moments of learning, sharing, and commitments.
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FREE ONLINE PROGRAMME
• AFTERSCHO☺OL is absolutely free programme available online – any person can join it. The programme has four components : • 1. case studies – writing and analysing – using latest tools of management • 2. articles / reports writing & presentation of them in conferences / seminars • 3. Study material / books / ebooks / audio / audio visual material to support the study • 4. business plan preparation and presentations of those plans in conferences / seminars
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100% placement / entrepreneurship
• AFTERSCHO☺OL has the record of 100% placement / entrepreneurship till date • Be assured of a bright career – if you join AFTERSCHO☺OL

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Pursue professional courses along with PGPSE
• AFTERSCHO☺OL permits you to pursue distance education based professional / vocational courses and gives you support for that also. Many students are doing CA / CS/ ICWA / CMA / FRM / CFP / CFA and other courses along with PGPSE. • Come and join AFTERSCHO☺OL

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