B.R.

S
The statement in which the bank reconciliation is done is called B.R.S
[OR] The statement in which we do bank reconciliation is done is called
B.R.S B.R.S a Complete and satisfactory explanation for the difference
between Cash book balance and pass book balance and helps to
equalize cash book balance to pass book balance.
MINORITY INTEREST
1. A significant but non-controlling ownership of less than 50% of a
company's voting shares by either an investor or another company.
2. A non-current liability that can be found on a parent company's
balance sheet that represents the proportion of its subsidiaries owned
by minority shareholders.
In accounting terms, if a company owns a minority interest in another
company but only has a minority passive position (i.e. it is unable to
exert influence), then all that is recorded from this investment are the
dividends received from the minority interest. If the company has a
minority active position (i.e. it is able to exert influence), then both
dividends and a percent of income are recorded on the company's
books.
Example :If ABC Corp. owns 90% of XYZ Inc., which is a $100 million
company, on ABC Corp.'s balance sheet, there would be a $10 million
liability in minority interest account to represent the 10% of XYZ Inc.
that ABC Corp does not own.
Depreciation
An expense that is supposed to reflect the loss in value of a fixed
asset. For
Example, if a machine will completely wear out after ten year's use,
the cost of the machine is charged as an expense over the tenyear life
rather than all at once, when the machine is purchased. Straight line
depreciation charges the same amount to expense each year.
Accelerated depreciation charges more to expense in early years, less
in later years.
Depreciation is an accounting expense. In real life, the fixed asset may
grow in value or it may become worthless long before the depreciation
period ends.
Working Capital :
which can be use to conduct day to day activities of the business is
working capital [To run without disturbances]

FORFEITED SHARE
A share in a company that the owner loses (forfeits) by failing to meet
the purchase requirements. Requirements may include paying any
allotment or call money owed, or avoiding selling or transferring shares
during a restricted period. When a share is forfeited, the shareholder
no longer owes any remaining balance, surrenders any potential
capital gain on the shares and the shares become the property of the
issuing company. The issuing company can re-issue forfeited shares at
par, a premium or a discount as determined by the board of directors.

VARIABLE COST
A corporate expense that varies with production output. Variable costs
are those costs that vary depending on a company's production
volume; they rise as production increases and fall as production
decreases. Variable costs differ from fixed costs such as rent,
advertising, insurance and office supplies, which tend to remain the
same regardless of production output. Fixed costs and variable costs
comprise total cost.

Reserves
1. It is created by debiting the profit and loss appropriation account.
2. It is created to meet an unknown liability, or to strengthen the
financial position of the company or for equalization of dividends etc.
3. A reserve is created only when there is profit in the business.
4. It can be distributed among shareholders as dividend.
5. The reserve is created without taking into consideration the actual
amount required except in the case of redemption of debentures when
a definite sum is set aside.
6. Creation of reserve depends upon the financial policy of the
business and discretion of its management.

7. It is usually shown on the liability side of the balance sheet as it is

not a specific reserve.
Provisions
1. It is created by debiting the profit and loss account.
2. It is created to meet a known liability or a specific contingency, e.g..
provision for bad and doubtful debts, or provision for depreciation etc.
3. A provision is created irrespective of whether there is profit or loss in
the business.
4. It is not available for distribution as dividend among shareholders.
5. A provision is made for a definite amount and, therefore, a definite
sum is set aside every year to meet the known contingency.
6. Making of a provision is a must to meet known liability or
contingency.
7. The provision is generally shown on the assets side of the balance
sheet.

Current ratio and Quick ratio

1. The current ratio is a financial ratio that investors and analysts use to
examine the liquidity of a company and its ability to pay short-term
liabilities (debt and payables) with its short-term assets (cash,
inventory, receivables). The current ratio is calculated by dividing
current assets by current liabilities.
2. The quick ratio, on the other hand, is a liquidity indicator that filters
the current ratio by measuring the amount of the most liquid current
assets there are to cover current liabilities (you can think of the
quick part as meaning assets that can be liquidated fast). The
quick ratio, also called the acid-test ratio, is calculated by adding
cash & equivalents, marketable investments and accounts
receivables, and dividing that sum by current liabilities.
3. The main difference between the current ratio and the quick ratio is that the latter
offers a more conservative view of the companys ability to meets its short-term

liabilities with its short-term assets because it does not include inventory and other
current assets that are more difficult to liquidate (i.e., turn into cash). By excluding
inventory (and other less liquid assets) the quick ratio focuses on the companys more
liquid assets.
Investment objective
Safety, Growth of capital, Income,
Tax Minimization, Marketability, and liquidity
Capital Budgeting
It is the process by which the firm decides which long-term
investments to make. Capital Budgeting projects, i.e., potential longterm investments, are expected to generate cash flows over several
years. The decision to accept or reject a Capital Budgeting project
depends on an analysis of the cash flows generated by the project and
its cost. The following three Capital Budgeting decision rules will be
presented:
Payback Period
Net Present Value (NPV)
Internal Rate of Return (IRR)

RATIO ANALYSIS
Quantitative analysis of information contained in a companys financial
statements. Ratio analysis is based on line items in financial
statements like the balance sheet, income statement and cash flow
statement; the ratios of one item or a combination of items - to
another item or combination are then calculated. Ratio analysis is used
to evaluate various aspects of a companys operating and financial
performance such as its efficiency, liquidity, profitability and solvency.
The trend of these ratios over time is studied to check whether they
are improving or deteriorating. Ratios are also compared across
different companies in the same sector to see how they stack up, and
to get an idea of comparative valuations. Ratio analysis is a
cornerstone of fundamental analysis.

Amortization

Usually refers to spreading an intangible asset's cost over that asset's

useful life. For example, a patent on a piece of medical equipment
usually has a life of 17 years. The cost involved with creating the
medical equipment is spread out over the life of the patent, with each
portion being recorded as an expense on the company's income
statement.
Depreciation, on the other hand, refers to prorating a tangible
asset's cost over that asset's life. For example, an office building can
be used for a number of years before it becomes run down and is sold.
The cost of the building is spread out over the predicted life of the
building, with a portion of the cost being expensed each accounting
year.

COST OF CAPITAL'
The cost of funds used for financing a business. Cost of capital depends
on the mode of financing used it refers to the cost of equity if the
business is financed solely through equity, or to the cost of debt if it is
financed solely through debt. Many companies use a combination of
debt and equity to finance their businesses, and for such companies,
their overall cost of capital is derived from a weighted average of all
capital sources, widely known as the weighted average cost of capital
(WACC). Since the cost of capital represents a hurdle rate that a
company must overcome before it can generate value, it is extensively
used in the capital budgeting process to determine whether the
company should proceed with a project.

Operating Expenses
Operating expenses are the costs a business incurs as part of its
regular business activities, not including the cost of goods sold. These
costs include administrative expenses such as office supplies and
salaries for administrative personnel. Commissions and advertising are
examples of sales expenses. You also have general operating expenses
such as rent and utilities.

Non-Operating Expenses
Some business expenditures are incurred for reasons that dont involve
normal business operations. One example of a non-operating expense
is interest on borrowed money. Non-operating expenses also include
one-time or unusual costs. The expenditure required for a business
reorganization or to pay expenses due t a lawsuit are examples.
Charges for obsolescence of equipment or currency exchange are also
non-operating expenses.

Operating Income
Operating income is operating revenues less operating expenses and
depreciation. A company generates operating revenues from the goods
and services it provides to its customers. Operating expenses are tied
to the production, sale and delivery of these goods and services and
include associated overhead and administrative expenses. Operating
income excludes interest payments and income taxes. Operating
income is also called operating profit. It is sometimes referred to as
EBIT -- earnings before interest and taxes -- but EBIT occasionally
includes non-operating items such as asset sales.
Non-Operating Income
Non-operating income is revenues and expenses generated by a
business that does not derive from ordinary business operations. Nonoperating income includes regularly occurring items such as interest
expense and income taxes. Interest expense shows the impact of a
company's debt structure on the income statement, and income taxes
can vary if the company has tax credits or prior net operating losses.
Non-operating income also includes nonrecurring items such as the
gain or loss from selling a large asset or subsidiary.

CONTINGENT LIABILITY
A potential obligation that may be incurred depending on the outcome
of a future event. A contingent liability is one where the outcome of an
existing situation is uncertain, and this uncertainty will be resolved by
a future event. A contingent liability is recorded in the books of

accounts only if the contingency is probable and the amount of the

liability can be estimated.

A holding company
It is a company or firm that owns other companies' outstanding stock.
The term usually refers to a company that does not produce goods or
services itself; rather, its purpose is to own shares of
other companies to form a corporate group. A parent corporation,
limited liability company or limited partnership that owns enough
voting stock in another company to control its policies and
management.
SUBSIDIARY
A company whose voting stock is more than 50% controlled by another
company, usually referred to as the parent company or holding
company. A subsidiary is a company that is partly or completely owned
by another company that holds a controlling interest in the subsidiary
company.
ASSOCIATE COMPANY
A corporation whose parent company possesses only a minority stake
in the ownership of the corporation. An associate company is partly
owned by another company or group of companies. The parent
company or companies do not consolidate the associate company's
financial statements. The parent company typically owns 20 to 50% of
the voting shares; if more than 50% of the shares are owned by a
parent company, it creates a subsidiary (where the parent company
consolidates the financial statements).

MERGERS AND ACQUISITIONS - M&A

A general term used to refer to the consolidation of companies. A

merger is a combination of two companies to form a new company,
while an acquisition is the purchase of one company by another in
which no new company is formed.
Gross national product (GNP) is the market value of all
the products and services produced in one year by labour and property
supplied by the citizens of a country.
An economic statistic that includes GDP, plus any income earned by
residents from overseas investments, minus income earned within the
domestic economy by overseas residents.

DEBTORS, RECEIVABLES TURNOVER RATIO

An accounting measure used to quantify a firm's effectiveness in
extending credit as well as collecting debts. The receivables turnover
ratio is an activity ratio, measuring how efficiently a firm uses
its assets.
Formula:

ACCOUNTS PAYABLE TURNOVER RATIO'

A short-term liquidity measure used to quantify the rate at which a
company pays off its suppliers. Accounts payable turnover ratio is
calculated by taking the total purchases made from suppliers and
dividing it by the average accounts payable amount during the same
period.

DERIVATIVE
A security whose price is dependent upon or derived from one or more
underlying assets. The derivative itself is merely a contract between

two or more parties. Its value is determined by fluctuations in the

underlying asset. The most common underlying assets include stocks,
bonds, commodities, currencies, interest rates and market indexes.
Most derivatives are characterized by high leverage.

A financial statement
(Or financial report) is a formal record of the financial activities of a
business, person, or other entity. Relevant financial information is
presented in a structured manner and in a form easy to understand.
They typically include basic financial statements, accompanied by
a management discussion and analysis:[1]
1. A balance sheet, also referred to as a statement of financial
position, reports on a company's assets, liabilities, and equity at
a given point in time.
2. An income statement, also known as a statement of
comprehensive income, statement of revenue &
expense, P&L or profit and loss report, reports on a
company's income, expenses, and profits over a period of time. A
profit and loss statement provides information on the operation
of the enterprise. These include sales and the various expenses
incurred during the stated period.
3. A statement of cash flows reports on a company's cash flow
activities, particularly its
operating, investing and financing activities.

DRs (Depositary Receipts)

A depositary receipt is a negotiable financial instrument issued by a
bank to represent a foreign company's publicly traded securities. The
depositary receipt trades on a local stock exchange, such as the New
York Stock Exchange (NYSE) in the U.S., but represents an interest in a
company that is headquartered outside of the United States. A
depositary receipt traded in Germany would represent a non-German
company.

A DR can be sponsored or unsponsored. The sponsored variety is

issued with the knowledge and cooperation of the underlying foreign
company. With this cooperation, a sponsored DR usually lets the
owners have the same rights normally given to the stockholders in the
home country, such as voting rights. An unsponsored DR may not have
the same voting rights.

ADRs (American Depositary Receipt)

An American Depositary Receipt (ADR) is a negotiable certificate
issued by a U.S. bank representing a specified number of shares in a
foreign (i.e. non-U.S.) stock that is traded on a U.S. exchange. ADRs are
denominated in U.S. dollars, with the underlying security held by a U.S.
financial institution overseas. ADRs help to reduce administration and
duty costs that would otherwise be levied on each transaction.

GDRs (Global Depositary Receipt)

Beyond the ADR, there is a second category of DR. A Global Depositary
Receipt (GDR) represents a bank certificate issued in more than one
country for shares in a foreign company. The shares are held by a
foreign branch of an international bank. The shares trade as domestic
shares, but are offered for sale globally through the various bank
branches. The term GDR is used throughout the globe and designates
any foreign firm that trades on an exchange outside its home country.

Fictitious Asset

Capital Lease

Operating Lease

Lease
criteria Ownershi
p

Ownership of the asset

might be transferred to
the lessee at the end of
the lease term.

Ownership is retained by the

lessor during and after the
lease term.

Lease
criteria Bargain
Purchase
Option

The lease contains a

bargain purchase option
to buy the equipment at
less than fair market
value.

The lease cannot contain a

bargain purchase option.

The lease term equals or

Lease
exceeds 75% of the
criteria asset's estimated useful
Term
life

The lease term is less than 75

percent of the estimated
economic life of the equipment

Asset created by an accounting entry (and included under assets in

the balance sheet) that has no tangible existence or
realizable value but represents actual cash expenditure. The purpose
of creating a fictitious asset is to account for expenses (such as
those incurred in starting a business) that cannot be placed under any
normal account heading. Fictitious assets are written off as soon as
possible against the firm's earnings.

Capital Redemption reserve

A fund which exists both on the financial statements of a company and
also as part of the company's internal accounts. A business with
a capital redemption reserve fund is legally mandated by the
U.S. Securities and Exchange Commission to make
capital redemptions for certain transactions acting as
a hedge against capital reductions.

SHARE PREMIUM ACCOUNT'

Usually found on the balance sheet, this is the account to which the
amount of money paid (or promised to be paid) by a shareholder for a
share is credited to, only if the shareholder paid more than the cost of
the share.

Public Company And Private Company

Privately-held companies are - no surprise here - privately held. This
means that, in most cases, the company is owned by the company's
founders, management or a group of private investors. A public
company, on the other hand, is a company that has sold a portion of
itself to the public via an initial public offering of some of its stock,
meaning shareholders have claim to part of the company's assets and
profits.

Accounting Concepts
a. Separate Entity Concept
b. Going Concern Concept
c. Money Measurement Concept
d. Cost Concept
e. Dual Aspect Concept
f. Periodic Matching of Cost and Revenue Concept
g. Realization Concept
Accounting Conventions
a. Convention of Conservatism
b. Convention of Full Disclosure
c. Convention of Consistency
d. Convention of Materiality
Accounting Principles
a. Cost Principle
b. Revenue Principle

c. Matching Principle
d. Objectivity Principle
e. Consistency Principle
f. Full Disclosure Principle
g. Conservatism Principle
h. Materiality Principle
i. Uniformity and Comparability Principle.
STOCK SPLIT
A corporate action in which a company divides its existing shares into
multiple shares. Although the number of shares outstanding increases
by a specific multiple, the total dollar value of the shares remains the
same compared to pre-split amounts, because the split did not add any
real value. The most common split ratios are 2-for-1 or 3-for-1, which
means that the stockholder will have two or three shares for every
share held earlier.
Also known as a "forward stock split."
First, a split is usually undertaken when the stock price is quite high,
making it pricey for investors to acquire a standard board lot of 100
shares. If XYZ Corp.'s shares were worth $100 each, an investor would
need to purchase $10,000 to own 100 shares. If each share was worth
$50, the investor would only need to pay $5,000 to own 100 shares.

INITIAL PUBLIC OFFERING - IPO

The first sale of stock by a private company to the public. IPOs are
often issued by smaller, younger companies seeking the capital to
expand, but can also be done by large privately owned companies
looking to become publicly traded.
In an IPO, the issuer obtains the assistance of an underwriting firm,
which helps it determine what type of security to issue (common or
preferred), the best offering price and the time to bring it to
market.Also referred to as a "public offering."

Stock Valuation
In financial markets, stock valuation is the method of calculating
theoretical values of companies and their stocks. The main use of
these methods is to predict future market prices, or more generally,
potential market prices, and thus to profit from price movement
stocks that are judged undervalued (with respect to their theoretical
value) are bought, while stocks that are judged overvalued are sold, in
the expectation that undervalued stocks will, on the whole, rise in
value, while overvalued stocks will, on the whole, fall.

AMALGAMATION
The combination of one or more companies into a new entity. An
amalgamation is distinct from a merger because neither of the
combining companies survives as a legal entity. Rather, a completely
new entity is formed to house the combined assets and liabilities of
both companies.

Net asset value (NAV)

It is the value of an entity's assets minus the value of its liabilities,
often in relation to open-end or mutual funds, since shares of such
funds registered with the U.S. Securities and Exchange Commission are
redeemed at their net asset value. This may also be the same as
the book value or the equity value of a business. Net asset value may
represent the value of the total equity, or it may be divided by the
number of shares outstanding held by investors, thereby representing
the net asset value per share.

BRIDGE FINANCING'

In investment banking terms, it is a method of financing used by

companies before their IPO, to obtain necessary cash for the
maintenance of operations. Bridge financing is designed to cover
expenses associated with the IPO and is typically short-term in nature.
Once the IPO is complete, the cash raised from the offering will
immediately payoff the loan liability.

A mutual fund
It is a professionally-managed trust that pools the savings of many
investors and invests them in securities like stocks, bonds, short-term
money market instruments and commodities such as precious metals.
Investors in a mutual fund have a common financial goal and their
money is invested in different asset classes in accordance with the
funds investment objective. Investments in mutual funds entail
comparatively small amounts, giving retail investors the advantage of
having finance professionals control their money even if it is a few
thousand rupees.
Based on the maturity period
Open-ended Fund
An open-ended fund is a fund that is available for subscription and can
be redeemed on a continuous basis. It is available for subscription
throughout the year and investors can buy and sell units at NAV related
prices. These funds do not have a fixed maturity date. The key feature
of an open-ended fund is liquidity.
Close-ended Fund
A close-ended fund is a fund that has a defined maturity period, e.g. 36 years. These funds are open for subscription for a specified period at
the time of initial launch. These funds are listed on a recognized stock
exchange.
Interval Funds
Interval funds combine the features of open-ended and close-ended
funds. These funds may trade on stock exchanges and are open for
sale or redemption at predetermined intervals on the prevailing NAV.
Based on investment objectives
Equity/Growth Funds
Equity/Growth funds invest a major part of its corpus in stocks and the

investment objective of these funds is long-term capital growth. When

you buy shares of an equity mutual fund, you effectively become a part
owner of each of the securities in your funds portfolio. Equity funds
invest minimum 65% of its corpus in equity and equity related
securities. These funds may invest in a wide range of industries or
focus on one or more industry sectors. These types of funds are
suitable for investors with a long-term outlook and higher risk appetite.
Debt/Income Funds
Debt/ Income funds generally invest in securities such as bonds,
corporate debentures, government securities (gilts) and money market
instruments. These funds invest minimum 65% of its corpus in fixed
income securities. By investing in debt instruments, these funds
provide low risk and stable income to investors with preservation of
capital. These funds tend to be less volatile than equity funds and
produce regular income. These funds are suitable for investors whose
main objective is safety of capital with moderate growth.
Balanced Funds
Balanced funds invest in both equities and fixed income instruments in
line with the pre-determined investment objective of the scheme.
These funds provide both stability of returns and capital appreciation to
investors. These funds with equal allocation to equities and fixed
income securities are ideal for investors looking for a combination of
income and moderate growth. They generally have an investment
pattern of investing around 60% in Equity and 40% in Debt
instruments.
Money Market/ Liquid Funds
Money market/ Liquid funds invest in safer short-term instruments such
as Treasury Bills, Certificates of Deposit and Commercial Paper for a
period of less than 91 days. The aim of Money Market /Liquid Funds is
to provide easy liquidity, preservation of capital and moderate income.
These funds are ideal for corporate and individual investors looking for
moderate returns on their surplus funds.
Gilt Funds
Gilt funds invest exclusively in government securities. Although these
funds carry no credit risk, they are associated with interest rate risk.
These funds are safer as they invest in government securities.
Some of the common types of mutual funds and what they typically
invest in:
Type of Fund

Typical Investment

Equity or Growth
Fund

Equities like stocks

Fixed Income Fund

Fixed income securities like government and

corporate bonds

Money Market Fund

Short-term fixed income securities like treasury

bills

Balanced Fund

A mix of equities and fixed income securities

Sector-specific Fund Sectors like IT, Pharma, Auto etc.

Index Fund

Equities or Fixed income securities chosen to

replicate a specific Index for example S&P CNX
Nifty

Fund of funds

Other mutual funds

Other Schemes
Tax-Saving (Equity linked Savings Schemes) Funds
Tax-saving schemes offer tax rebates to investors under specific
provisions of the Income Tax Act, 1961. These are growth-oriented
schemes and invest primarily in equities. Like an equity scheme, they
largely suit investors having a higher risk appetite and aim to generate
capital appreciation over medium to long term.
Index Funds
Index schemes replicate the performance of a particular index such as
the BSE Sensex or the S&P CNX Nifty. The portfolio of these schemes
consist of only those stocks that represent the index and the
weightage assigned to each stock is aligned to the stocks weightage
in the index. Hence, the returns from these funds are more or less
similar to those generated by the Index.
Sector-specific Funds
Sector-specific funds invest in the securities of only those sectors or
industries as specified in the Scheme Information Document. The
returns in these funds are dependent on the performance of the
respective sector/industries for example FMCG, Pharma, IT, etc. The
funds enable investors to diversify holdings among many companies
within an industry. Sector funds are riskier as their performance is
dependent on particular sectors although this also results in higher
returns generated by these funds.

Breakeven point
The amount of revenue from sales which exactly equals the amount of
Expense. Breakeven point is often expressed as the number of units
that must be sold to produce revenues exactly equal to expenses.
Sales above the breakeven point produce a profit; below produces a
loss.
Margin of safety (safety margin) is the difference between the intrinsic
value of a stock and its market price.
Another definition: In Break even analysis (accounting), margin of
safety is how much output or sales level can fall before a business
reaches its breakeven point.

Market capitalization
(or market cap) is the total value of the shares outstanding of
a publicly traded company; it is equal to the share price times the
number of shares outstanding.[2][3] As outstanding stock is bought and
sold in public markets, capitalization could be used as a proxy for the
public opinion of a company's net worth and is a determining factor in
some forms of stock valuation. If a company has 35 million shares
outstanding, each with a market value of $100, the company's market
capitalization is $3.5 billion (35,000,000 x $100 per share).

Economic order quantity

1.
(EOQ) is the order quantity that minimizes total inventory
holding costs and ordering costs.
2.
The Economic Order Quantity (EOQ) is the number of units that a
company should add to inventory with each order to minimize the total
costs of inventorysuch as holding costs, order costs, and shortage
costs. The EOQ is used as part of a continuous review inventory system
in which the level of inventory is monitored at all times and a fixed
quantity is ordered each time the inventory level reaches a specific
reorder point.

A Cash Flow Statement

It is a statement showing changes in cash position of the firm from one
period to another. It explains the inflows (receipts) and outflows
(disbursements) of cash over a period of time. The inflows of cash may
occur from sale of goods, sale of assets, receipts from debtors,
interest, dividend, rent, issue of new shares and debentures, raising of
loans, short-term borrowing, etc. The cash outflows may occur on
account of purchase of goods, purchase of assets, payment of loans
loss on operations, payment of tax and dividend, etc. Cash Flow
Statement comprises information on following 3 activities:
1. Operating Activities
2. Investing Activities
3. Financing Activities
1. Operating Activities: Operating activities include cash flows from all
standard business operations. Cash receipts from selling goods and
services represent the inflows. The revenues from interest and
dividends are also included here. The operational expenditures are
considered as outflows for this section. Although interest expenses
fall under this section but the dividends are not included .Dividends
are considered as a part of financing activity in financial accounting
terms.
2. Investing Activities: Investing activities include transactions with
assets, marketable securities and credit instruments. The sale of
property, plant and equipment or marketable securities is a cash
inflow. Purchasing property, plant and equipment or marketable
securities are considered as cash outflows. Loans made to borrowers
for long-term use is another cash outflow. Collections from these
loans, however, are cash inflows.
3. Financing Activities: Financing activities on the statement of cash
flows are much more defined in nature. The receipts come from
borrowing money or issuing stock. The outflows occur when a
company repays loans, purchases treasury stock or pays dividends
to stockholders. As the case with other activities on the statement
of cash flows depend on activities rather than actual general ledger
accounts.
Funds Flow Statement states the changes in the working capital of
the business in relation to the operations in one time period.
The main components of Working Capital are:
Current Assets
1. Cash
2. Receivables

3. Inventory
Current Liabilities
1. Payables
Table of Difference between Funds Flow Statement and Cash Flow
Statement
Basis of Funds Flow Statement
Cash Flow Statement
Differenc
e
1. Basis of Funds flow statement is Cash flow statement is based
Analysis based on broader concept on narrow concept i.e. cash,
i.e. working capital.
which is only one of the
elements of working capital.
2. Source
Funds flow statement tells Cash flow statement stars
about the various sources with the opening balance of
from where the funds cash and reaches to the
generated with various closing balance of cash by
uses to which they are proceeding through sources
put.
and uses.
3. Usage
Funds flow statement is Cash flow statement is useful
more useful in assessing in understanding the shortthe long-range financial term phenomena affecting
strategy.
the liquidity of the business.
4. Schedule In funds flow statement In
cash
flow
statement
of
changes in current assets changes in current assets and
Changes and current liabilities are current liabilities are shown in
in
shown
through
the the cash flow statement
Working schedule of changes in itself.
Capital
working capital.
5. End
Funds
flow
statement Cash flow statement shows
Result
shows the causes of the causes the changes in
changes in net working cash.
capital.
6. Principal Funds flow statement is in In cash flow statement data
of
alignment
with
the obtained on accrual basis are
Accounti accrual
basis
of converted into cash basis.
ng
accounting.

ZERO-BASED BUDGETING - ZBB'

A method of budgeting in which all expenses must be justified for each
new period. Zero-based budgeting starts from a "zero base" and every
function within an organization is analyzed for its needs and costs.

Budgets are then built around what is needed for the upcoming period,
regardless of whether the budget is higher or lower than the previous
one.

Memorandum of Association
It is the document that governs the relationship between the company
and the outside. The memorandum of association gives the company's
name, names of its members (shareholders) and number
of shares held by them, and location of its registered office. It
also states the company's (1) objectives, (2) amount of authorized
share capital, (3) whether liability of its members is limited by shares
or by guaranty, and (4) what type of contracts the company is allowed
to enter into. Almost all of its provisions (except those mandated
by corporate legislation) can be altered by the company's members by
following the prescribed procedures. The memorandum is a public
document and may be inspected by anyone, usually at the
public office where it is lodged.

Article of Association
Defines the responsibilities of the directors, the kind of business to be
undertaken, and
the means by which the shareholders exert control over the board of
directors.
Memorandum and articles are public documents. They are inter-linked
and require to be registered for the formation of a company. Where
there is any ambiguity or where the memorandum is silent on any
point, the articles may serve to explain or supplement the
memorandum. Beyond this, the two documents have nothing in
common and differ from one another in the following respects:
1. Memorandum of association is the charter of the company and
defines the scope of its activities. Articles of association of the
company is a document which regulates the internal management of
the company. These are the rules made by the company for carrying
out the objects of the company as set out in the memorandum.

2. Memorandum of association defines the relation of the company

with the rights of the members of the company interest and also
establishes the relationship of the company with the members.
3. Memorandum of association cannot be altered except in the manner
and to the extent provided by the act, whereas the articles being only
the byelaws of the company can be altered by a special resolution.
4. Memorandum is a supreme document of the company whereas
articles are subordinate to the memorandum. They cannot alter or
control the memorandum.
5. Every company must have its own memorandum. But a company
limited by shares need not register its articles. In such a case table A
applies.
6. A company cannot depart from the provisions contained in its
memorandum, and if it does, it would be ultra-vires the company.
Anything done against the provisions of articles, but which is intra-vires
the memorandum, can be ratified.

Goodwill
In accounting, the difference between what a company pays when it
buys the assets of another company and the book value of those
assets. Sometimes, real goodwill is involved a company's good
reputation, the loyalty of its customers, and so on. Sometimes,
goodwill is an overpayment.
Bombay Stock Exchange (BSE) is an Indian stock exchange located
at Mumbai, Maharashtra, India. Established in 1875 and is considered
to be one of Asias fastest stock exchanges, with a speed of 200
microseconds and one of Indias leading exchange groups and one of
the oldest stock exchanges in South Asia region. More than 5,000
companies are listed on BSE, making it the world's top exchange in
terms of listed members. The companies listed on BSE Ltd. command a
total market capitalization of USD 1.6 trillion as of June 2014.[1] It is also
one of the worlds top twenty stock exchanges by market
capitalization.
The National Stock Exchange of India Ltd. (NSE) (Hindi:
Rashtriya hare Bzar) is an Indian stock exchange located
atMumbai, Maharashtra, India. National Stock Exchange (NSE) was
established in 1992 as a demutualised electronic exchange. NSE
provides a modern, fully automated screen-based trading system, with
over two lakh trading terminals, through which investors in every nook
and corner of India can trade.

NSE has a market capitalization of more than US$1.4 trillion making it

one of the worlds top twenty stock exchanges by market capitalization

Recurring expense, an ongoing (continual) expenditure

Costs which the party pays at closing but will continue to occur or be
repeated after the escrow closes as a cost of maintaining the property.
o
Fire Insurance Premium
o
Homeowners Association Dues
o
Real Property Taxes
o
Interest on the New Loa
Non-Recurring Costs
Costs which are charged ONE TIME ONLY as an expense of closing the
transaction.
An entry that appears on a company's financial statements for a onetime expense that is unlikely to happen again. A nonrecurring charge is
a one-time charge for an unpredictable event.
Title
o
o
o

Company Expenses such as:

Title Insurance Premiums
Recording Fees
Endorsements to Title Policies

The Sensex
It is an "index". What is an index? An index is basically an indicator. It
gives you a general idea about whether most of the stocks have gone
up or most of the stocks have gone down.
The Sensex is an indicator of all the major companies of the BSE.
The Nifty is an indicator of all the major companies of the NSE.
If the Sensex goes up, it means that the prices of the stocks of most of
the major companies on the BSE have gone up. If the Sensex goes
down, this tells you that the stock price of most of the major stocks on
the BSE have gone down.
Just like the Sensex represents the top stocks of the BSE, the Nifty
represents the top stocks of the NSE.

Debt Mutual Funds mainly invest in a mix of debt or fixed income

securities such as Treasury Bills, Government Securities, Corporate
Bonds, Money Market instruments and other debt securities of different
time horizons. Generally, debt securities have a fixed maturity date &
pay a fixed rate of interest.
The returns of a debt mutual fund comprises of
Interest income

Capital appreciation / depreciation in the value of the security

due to changes in market dynamics
There is a wide range of fixed income or Debt Mutual Funds available
to suit the needs of different investors, based on their:

Investment horizon

Ability to bear risk

Types of Debt mutual fund
Liquid Funds / Money Market Funds
Ultra Short Term Funds
Floating Rate Funds
Short Term & Medium Term Income Funds
Income Funds, Gilt Funds and other dynamically managed debt funds
Income funds
Gilt Funds
Dynamic Bond Funds
Corporate Bond Funds
Close Ended Debt Funds
Fixed Maturity Plans (FMPs)
Hybrid Funds
Monthly Income Plans (MIPs)
Capital Protection Oriented Funds
Multiple Yield Funds
Intrinsic value
In finance, intrinsic value refers to the value of a
company, stock, currency or product determined through fundamental
analysis without reference to its market value.[1] It is also frequently
called fundamental value. It is ordinarily calculated by summing
the discounted future income generated by the asset to obtain
the present value. It is worthy to note that this term may have different
meanings for different assets.
INTRINSIC VALUE'

1. The actual value of a company or an asset based on an underlying

perception of its true value including all aspects of the business, in
terms of both tangible and intangible factors. This value may or may
not be the same as the current market value. Value investors use a
variety of analytical techniques in order to estimate the intrinsic value
of securities in hopes of finding investments where the true value of
the investment exceeds its current market value.

DEFERRED INCOME TAX'

A liability recorded on the balance sheet that results from income
already earned and recognized for accounting, but not tax, purposes.
Also, differences between tax laws and accounting methods can result
in a temporary difference in the amount of income tax payable by a
company. This difference is recorded as deferred income tax.
EXPLAINS 'DEFERRED INCOME TAX'
In other words, this would mean that income has been realized, but the
tax on that income has not.
For example, let's say that the amount of tax that a business should
pay is $100,000, but due to tax laws, the amount actually payable for
this fiscal year is $85,000. The additional $15,000 would be a deferred
income tax liability that the company would need to pay later on.

Primary Market :
Securities are offered to public for subscription
Purpose of Raising capital or fund
Primary Market - Definition:
The primary markets deal with the trading of newly issued securities.
The corporations, governments and companies issue securities like
stocks and bonds when they need to raise capital. The investors can

purchase the stocks or bonds issued by the companies.

Money thus earned from the selling of securities goes directly to the
issuing company. The primary markets are also called New Issue
Market (NIM). Initial Public Offering is a typical method of issuing
security in the primary market. The functioning of the primary market
is crucial for both the capital market and economy as it is the place
where the capital formation takes place.

Secondary Market
Already existing securities are traded
Purpose of capital appreciation
Secondary Market - Definition:
The secondary market is that part of the capital market that deals with
the securities that are already issued in the primary market.
The investors who purchase the newly issued securities in the primary
market sell them in the secondary market. The secondary market
needs to be transparent and highly liquid in nature as it deals with the
already issued securities. In the secondary market, the value of a
particular stock also varies from that of the face value. The resale
value of the securities in the secondary market is dependent on the
fluctuating interest rates.

A letter of credit
It is a document from a bank guaranteeing that a seller will
receive payment in full as long as certain delivery conditions have
been met.
A letter from a bank guaranteeing that a buyer's payment to a seller
will be received on time and for the correct amount. In the event that

the buyer is unable to make payment on the purchase, the bank will be
required to cover the full or remaining amount of the purchase.
Letters of credit are often used in international transactions to ensure
that payment will be received. Due to the nature of international
dealings including factors such as distance, differing laws in each
country and difficulty in knowing each party personally, the use of
letters of credit has become a very important aspect of international
trade. The bank also acts on behalf of the buyer (holder of letter of
credit) by ensuring that the supplier will not be paid until the bank
receives a confirmation that the goods have been shipped.

Statutory liquidity ratio (SLR) is the Indian government term

for reserve requirement that the commercial banks in India require to
maintain in the form of gold or government approved securities before
providing credit to the customers. Statutory Liquidity Ratio is
determined and maintained by Reserve Bank of India in order to
control the expansion of bank credit.

CRR
or cash reserve ratio is the minimum proportion / percentage of a
bank's deposits to be held in the form of cash. Banks actually don't
hold these as cash with themselves, but deposit the same with RBI /
currency chests, which is considered equivalent to holding cash with
themselves.
When a bank's deposits increase by Rs. 100 crore, and considering the
present cash reserve ratio of 6%, bank will have to hold additional Rs.
6 crore with RBI and will be able to use only Rs. 94 crore for
investments and lending. Therefore, higher the CRR, lower the amount
that banks can lend. Thus RBI can control the liquidity by changing the
CRR i.e. increase CRR to reduce the lendable amount and vice-versa.
SLR

or statutory liquidity ratio is the minimum percentage of deposits that

a bank has to maintain in form of gold, cash or other approved
securities. It is the ratio of liquid assets (cash and approved securities)
to the demand and term liabilities / deposits.
Factoring is a financial transaction and a type of debtor finance in
which a business sells its accounts receivable (i.e., invoices) to a third
party (called factor) at a discount.[1][2][3][4] A Business will
sometimes Factor its Receivable Assets to meet its present and
immediate Cash needs.[5] [6] Forfaiting is a Factoring arrangement used
in International Trade Finance by Exporters who wish to sell
their receivables to a forfeiter.
Short-term, non-bank financing of accounts-receivable. It is of four
main types: (1) In maturity factoring (also called service factoring),
the factor maintains the seller's sales ledger, controls credit, follows up
on the payments, and pays the amount (after deducting a commission)
of each invoice as it falls due, whether or not the payment was
collected. (2) In finance factoring, the factor (called the financing
factor) advances funds to a producer or a manufacturing firm, on
the security of produce or goods that will be produced or manufactured
utilizing those funds. (3) In discount factoring (also called service plus
finance factoring) the factor advances a percentage (usually between
70 to 85 percent of the value of accounts receivable) to the seller on
a non-recourse basis and assumes the full responsibility of collecting
the debts. (4) In undisclosed factoring, a factor buys the goods from
a primary party (producer, manufacturer, or seller) and then appoints
the same party as its agent to resell those goods and to collect the
payments. This arrangement prevents the disclosure that goods are
being sold under a factoring agreement.

Bond valuation
is the determination of the fair price of a bond. As with any security or
capital investment, the theoretical fair value of a bond is the present
value of the stream of cash flows it is expected to generate. Hence, the

value of a bond is obtained by discounting the bond's expected cash

flows to the present using an appropriate discount rate.
The fundamental principle of bond valuation is that the bond's value is
equal to the present value of its expected (future) cash flows. The
valuation process involves the following three steps:
1. Estimate the expected cash flows.
2. Determine the appropriate interest rate or interest rates that should
be used to discount the cash flows.
3. Calculate the present value of the expected cash flows found in step
one by using the interest rate or interest rates determined in step two.

COMMERCIAL PAPER'
An unsecured, short-term debt instrument issued by a corporation,
typically for the financing of accounts receivable, inventories and
meeting short-term liabilities. Maturities on commercial paper rarely
range any longer than 270 days. The debt is usually issued at a
discount, reflecting prevailing market interest rates.
Commercial paper, in the global financial market, is
an unsecured promissory note with a fixed maturity of no more than
270 days.
Commercial paper is a money-market security issued (sold) by
large corporations to obtain funds to meet short-term debt obligations
(for example, payroll), and is backed only by an issuing bank or
corporation's promise to pay the face amount on the maturity date
specified on the note.

Operating leverage
A measurement of the degree to which a firm or project incurs a
combination of fixed and variable costs.
1. A business that makes few sales, with each sale providing a very
high gross margin, is said to be highly leveraged. A business that
makes many sales, with each sale contributing a very slight margin, is

said to be less leveraged. As the volume of sales in a business

increases, each new sale contributes less to fixed costs and more to
profitability.
2. A business that has a higher proportion of fixed costs and a lower
proportion of variable costs is said to have used more operating
leverage. Those businesses with lower fixed costs and higher variable
costs are said to employ less operating leverage.
The debt/equity ratio also depends on the industry in which the
company operates. For example, capital-intensive industries such as
auto manufacturing tend to have a debt/equity ratio above 2, while
personal computer companies have a debt/equity of under 0.5.

SUNK COST'
A cost that has already been incurred and thus cannot be recovered. A
sunk cost differs from other, future costs that a business may face,
such as inventory costs or R&D expenses, because it has already
happened. Sunk costs are independent of any event that may occur in
the future.

FIRST IN, FIRST OUT - FIFO'

An asset-management and valuation method in which the assets
produced or acquired first are sold, used or disposed of first. FIFO may
be used by a individual or a corporation.

Commercial paper, in the global financial market, is

an unsecured promissory note with a fixed maturity of no more than
270 days.
Commercial paper is a money-market security issued (sold) by
large corporations to obtain funds to meet short-term debt obligations
(for example, payroll), and is backed only by an issuing bank or
corporation's promise to pay the face amount on the maturity date
specified on the note.

A cash credit is a short-term cash loan to a company. A bank provides

this type of funding, but only after the required security is given to
secure the loan. Once a security for repayment has been given, the
business that receives the loan can continuously draw from the bank
up to a certain specified amount.
Overdraft
An overdraft occurs when money is withdrawn from a bank account
and the available balance goes below zero. In this situation the account
is said to be "overdrawn". If there is a prior agreement with the
account provider for an overdraft, and the amount overdrawn is within
the authorized overdraft limit, then interest is normally charged at the
agreed rate. If the negative balance exceeds the agreed terms,
then additional fees may be charged and higher interest rates may
apply.
An extension of credit from a lending institution when an account
reaches zero. An overdraft allows the individual to continue
withdrawing money even if the account has no funds in it. Basically the
bank allows people to borrow a set amount of money.

SEMI-VARIABLE COST'
A cost composed of a mixture of fixed and variable components. Costs
are fixed for a set level of production or consumption, becoming
variable after the level is exceeded. The fixed cost element shall be a
part of the cost that needs to be paid irrespective of the level of
activity achieved by the entity. On the other hand the variable
component of the cost is payable proportionate to the level of activity.
The primary market is the part of the capital market that deals with
issuing of new securities. Companies, governments or public sector
institutions can obtain funds through the sale of a new stock or bond
issues through primary market. Primary markets are facilitated by
underwriting groups, which consist of investment banks that will set a
beginning price range for a given security and then oversee its sale
directly to investors.
Earnings per share (EPS) is the monetary value of earnings per
each outstanding share of a company's common stock.

Earnings per share (basic formula)

Earnings per share (net income formula)

Earnings per share (continuing operations formula)

Earnings per share serves as an indicator of a company's profitability.

Difference

1. Status

2. Return on
Investment

3. Repayment
4. Right to
Participate

5. Liquidation

6. Security

Share
Debenture
Shares are ownership
securities. The holders of Debentures are creditor ship
shares are the owners of securities. Debenture holders are
a company.
creditors of a company.
Dividend is paid on
shares by the company.
The rate of dividend is
Interest is paid on debentures at a
not fixed.
fixed rate.
Equity shares capital is
not to be returned back The amount of debentures is paid
except in the case of
back to debenture-holders after a
liquidation.
fixed time.
Shareholders have a right
to participate in the
Debenture holders cant participate
affairs of the company.
in the affairs of the company.
Equity shares get the
refund only when all
Debenture holders get payment in
liabilities have been paid priority as compared to all the
off.
creditors.
Shareholders being
owners, have to bear
Debentures are usually secured by
maximum risk.
a fixed or floating charge.

Prospectus
A formal legal document, which is required by and filed with the
Securities and Exchange Commission, that provides details about an
investment offering for sale to the public. A prospectus should contain
the facts that an investor needs to make an informed investment
decision.
A prospectus, in finance, is a disclosure document that describes a
financial security for potential buyers. It commonly provides investors
with material information about mutual funds, stocks, bonds and
other investments, such as a description of the company's
business, financial statements, biographies of officers and directors,
detailed information about their compensation, any litigation that is
taking place, a list of material properties and any other material
information. In the context of an individual securities offering, such as
an initial public offering, a prospectus is distributed
by underwriters or brokerages to potential investors.

Difference between preference share and equity share

1.Rate Of Dividend
The rate of dividend on equity shares may vary from year to year
depending upon the availability of profit. Preference share holders
are paid dividend at a fixed rate.
2. Arrears Of Dividend
Equity shareholders can not get the arrears of past dividend.
Cumulative preference share holders can get the arrears of past
dividend.
3. Redemption
Equity shares can not be redeemed except, under a scheme
involving reduction of capital. Preference shares can be redeemed
as provided by the articles and terms of issue.

4. Voting
Equity shareholders enjoy voting rights. Preference shareholders
do not have the right to participate in the management of the
company.
5. Payment Of Dividend
Payment of dividend to equity share is made only after paying
to preference shares. Preference shares have a preferential right to
receive dividend before equity share
DIVIDEND YIELD'
A financial ratio that shows how much a company pays out
in dividends each year relative to its share price. In the absence of
any capital gains, the dividend yield is the return on investment for a
stock. Dividend yield is calculated as follows:

SWEAT EQUITY'
Contribution to a project or enterprise in the form of effort and toil.
Sweat equity is the ownership interest, or increase in value, that is
created as a direct result of hard work by the owner(s). It is the
preferred mode of building equity for cash-strapped entrepreneurs in
their start-up ventures, since they may be unable to contribute much
financial capital to their enterprise. In the context of real estate, sweat
equity refers to value-enhancing improvements made by homeowners
themselves to their properties. The term is probably derived from the
fact that such equity is considered to be generated from the "sweat of
one's brow."
CASH PROFIT is profit after tax plus depreciation.

PROXY'
1. An agent legally authorized to act on behalf of another
party. Shareholdersnot attending a company's annual meeting may
choose to vote their shares by proxy by allowing someone else to
cast votes on their behalf.
2. Management often encourages shareholders to vote by proxy so
that ownership interests are fully represented even if shareholders
are unable to attend the company's annual meetings in person.

BOOK VALUE PER COMMON SHARE'

A measure used by owners of common shares in a firm to determine
the level of safety associated with each individual share after all debts
are paid accordingly.

Formula:

BOOK VALUE'
Book value is the accounting value of a firm. It has two main uses:
1. It is the total value of the company's assets that shareholders would
theoretically receive if a company were liquidated.
2. By being compared to the company's market value, the book value
can indicate whether a stock is under- or overpriced.
3. In personal finance, the book value of an investment is the price
paid for a security or debt investment. When a stock is sold, the selling
price less the book value is the capital gain (or loss) from the
investment.

b
Hypothecation is a way of creating a charge against the security of
movable assets, which is much similar to pledge.(example purchasing
a bike from bank loan). The possession and the ownership remains with
the borrower.Since the possession remains with the borrower, he may,
at any time either create a subsequent charge by way of pledge over
same goods or may sell them. In such cases, the rights of the pledgee
usually supercedes the rights of the person in whose favour the goods
were hypothecated, if the fact of existence of such a charge is not
known to the subsequent pledgee..
Pledge
Pledge arises when the lender( pledgee) takes possession of either the
goods or bearer securities for extending a credit facility to the borrower
(pledgor). The pledgee can retain the possession of the goods until the
pledgor repays the entire debt amount and in case of a default, the
pledgee has the right to sell the goods in his possession and adjust its
proceeds towards the amount due.(example Jewel loan)
Mortgage
Mortgage is a type of charge related to immovable property.
Immovable property shall include land, benefits to arise out of land and
things attached to the earth or permanently fastened to anything
attached to the earth. It does not include standing timber, growing
crops or grass.
Differentiating between Mortgage and Reverse Mortgage
In a normal housing loan, where the property being purchased is
mortgaged to the lender, the borrower avails a loan to begin with and
at that point of time, his stake in the property purchased is low. As the
regular EMI is paid on due dates, the loan amount reduces and his
stake in the property increases.
However, in Reverse Mortgage, the position is exactly the reverse.
Under RML, the borrower initially retains a high stake in his property
and receives a regular cash flow. Over time, when the loan amount
increases, his stake in the property reduces.
Hypothecation in the investment markets
When an investor asks a broker to purchase securities on margin,
hypothecation can occur in two senses. The purchased assets can be
hypothecated so that, if the investor fails to keep upcredit repayments,
the broker can sell some of the securities.[1] The broker can also sell the

securities if they drop in value and the investor fails to respond to

a margin call.
Repo rate is the rate at which the central bank of a country (Reserve
Bank of India in case of India) lends money to commercial banks in the
event of any shortfall of funds. Repo rate is used by monetary
authorities to control inflation.
Description: In the event of inflation, central banks increase repo rate
as this acts as a disincentive for banks to borrow from the central bank.
This ultimately reduces the money supply in the economy and thus
helps in arresting inflation.
Reverse repo rate is the rate at which the central bank of a country
(Reserve Bank of India in case of India) borrows money from
commercial banks within the country. It is a monetary policy
instrument which can be used to control the money supply in the
country.
Description: An increase in the reverse repo rate will decrease the
money supply and vice-versa, other things remaining constant. An
increase in reverse repo rate means that commercial banks will get
more incentives to park their funds with the RBI, thereby decreasing
the supply of money in the market.

ASSET MANAGEMENT COMPANY - AMC'

A company that invests its clients' pooled fund into securities that
match its declared financial objectives. Asset management companies
provide investors with more diversification and investing options than
they would have by themselves.
Mutual funds, hedge funds and pension plans are all run by asset
management companies. These companies earn income by charging
service fees to their clients.

Operating profit
The profit earned from a firm's normal core business operations. This
value does not include any profit earned from the firm's investments

(such as earnings from firms in which the company has partial interest)
and the effects of interest and taxes.
Operating Profit = Operating Revenue - COGS - Operating Expenses Depreciation & Amortization
PREPAID EXPENSE'
A type of asset that arises on a balance sheet as a result of business
making payments for goods and services to be received in the near
future. While prepaid expenses are initially recorded as assets, their
value is expensed over time as the benefit is received onto the income
statement, because unlike conventional expenses, the business will
receive something of value in the near future.

General Reserve:.
1 General reserve is crated not for a specific purpose. It is created
. to strengthen the financial position of the business
2 It can be utilized for any purpose.
.
3 Dividend can be paid out of it if needed.
.
Specific Reserve:
1 It is created for some specific purpose. For example, debenture
. sinking fund is created for the purpose of repaying loan on
account of debenture.
2 It can be utilized only for the purpose for which it has been
. created. It cannot be utilized for other purposes.
3 Dividend cannot be paid out of it. But on fulfillment of the
. objective for which a fund has been created the fund will no
longer be required, when dividend may be paid out of it.
For example, on repayment of loan on account of debenture the
debenture sinking fund is not required. Then it is transferred to
general reserve fund. In other words the fund money is
distributable as dividend.