Current Ratio

Meaning:
This ratio compares the current assets with the current liabilities. It is also known as working capital ratio or solvency ratio. It is expressed in the form of pure ratio. E.g. 2:1 Formula:

Current assets
Current ratio = Current liabilities The current assets of a firm represents those assets which can be, in the ordinary course of business, converted into cash within a short period time, normally not exceeding one year. The current liabilities defined as liabilities which are short term maturing obligations to be met, as originally contemplated, with in a year. Current ratio (CR) is the ratio of total current assets (CA) to total current liabilities (CL). Current assets include cash and bank balances; inventory of raw materials, semi-finished and finished goods; marketable securities; debtors (net of provision for bad and doubtful debts); bills receivable; and prepaid expenses. Current liabilities consist of trade creditors, bills payable, bank credit, and provision for taxation, dividends payable and outstanding expenses. This ratio measures the liquidity of the current assets and the ability of a company to meet its short-term debt obligation.

CR measures the ability of the company to meet its CL, i.e., CA gets converted into cash in the operating cycle of the firm and provides the funds needed to pay for CL. The higher the current ratio, the greater the short-term solvency. This compares assets, which will become liquid within approximately twelve months with liabilities,

which will be due for payment in the same period and is intended to indicate whether there are sufficient short-term assets to meet the short- term liabilities. Recommended current ratio is 2: 1. Any ratio below indicates that the entity may face liquidity problem but also Ratio over 2: 1 as above indicates over trading, that is the entity is under utilizing its current assets.

Liquid Ratio:
Meaning: Liquid ratio is also known as acid test ratio or quick ratio. Liquid ratio compares the quick assets with the quick liabilities. It is expressed in the form of pure ratio. E.g. 1:1.

The term quick assets refer to current assets, which can be converted into, cash immediately or at a short notice without diminution of value.

Formula:
Quick assets Liquid ratio =

Quick liabilities Quick Ratio (QR) is the ratio between quick current assets (QA) and CL. QA refers to those current assets that can be converted into cash immediately without any value strength. QA includes cash and bank balances, short-term marketable securities,

and sundry debtors. Inventory and prepaid expenses are excluded since these cannot be turned into cash as and when required.

QR indicates the extent to which a company can pay its current liabilities without relying on the sale of inventory. This is a fairly stringent measure of liquidity because it is based on those current assets, which are highly liquid. Inventories are excluded from the numerator of this ratio because they are deemed the least liquid component of current assets. Generally, a quick ratio of 1:1 is considered good. One drawback of the quick ratio is that it ignores the timing of receipts and payments.

Cash Ratio:
Meaning:
This is also called as super quick ratio. This ratio considers only the absolute liquidity available with the firm.

Formula: Cash + Bank + Marketable securities Cash ratio =

Total current liabilities

Since cash and bank balances and short term marketable securities are the most liquid assets of a firm, financial analysts look at the cash ratio. If the super liquid assets are too much in relation to the current liabilities then it may affect the profitability of the firm.

Coverage ratio
A measure of a company's ability to meet its financial obligations. In broad terms, the higher the coverage ratio, the better the ability of the enterprise to fulfill its obligations to its lenders. The trend of coverage ratios over time is also studied by analysts and investors to ascertain the change in a company's financial position. Common coverage ratios include the interest coverage ratio, debt service coverage ratio and the asset coverage ratio.

Ratio
A ratio shows the relative sizes of two or more values. Ratios can be shown in different ways. Using the ":" to separate example values, or as a single number by dividing one value by the total. Example: if there is 1 boy and 3 girls you could write the ratio as:

1:3 (for every one boy there are 3 girls) 1/4 are boys and 3/4 are girls 0.25 are boys (by dividing 1 by 4) 25% are boys (0.25 as a percentage)

Definition: FIFO and LIFO Methods are accounting techniques used in managing inventory and financial matters involving the amount of money a company has tied up within inventory of produced goods, raw materials, parts, components, or feed stocks. These methods are used to manage assumptions of cost flows related to inventory, stock repurchases (if purchased at different prices), and various other accounting purposes. FIFO stands for first-in, first-out, meaning that the oldest inventory items are recorded as sold first but do not necessarily mean that the exact oldest physical object has been tracked and sold. LIFO stands for last-in, first-out, meaning that the most recently produced items are recorded as sold first. Since the 1970s, some U.S. companies shifted towards the use of LIFO, which reduces their income taxes in times of inflation, but with International Financial Reporting Standards banning the use of LIFO, more companies have gone back to FIFO. LIFO is only used in theU.S.[1]

Financial mgmt test next moday 8april 2013 1) Time value of mony 2) Internal ratio of return (iir ) a)NPV, Dis.rate, DCF.

Indian Financial System Code

From Wikipedia, the free encyclopedia

The Indian Financial System Code (IFSC) is an alphanumeric code that uniquely identifies a bank-branch participating in the two main electronic funds settlement systems in India: the real time gross settlement (RTGS) and the national electronic funds transfer (NEFT) systems.[1] This is an 11-character code with the first four alphabetic characters representing the bank, and the last six characters (usually numeric, but can be alphabetic) representing the branch. The fifth character is 0 (zero). IFSC is used by the NEFT & RTGS systems to route the messages to the destination banks/branches.[2]

IFSC Information
Bank-wise list of IFSCs is available with all the bank-branches participating in inter bank electronic funds transfer. A list of bank-branches participating in NEFT/RTGS and their IFSCs is available on the website of Reserve Bank of India.[3] All the banks have also been advised to print the IFSC of the branch on cheques issued by branches to their customers. For net banking customers many banks have enabled onl

Central bank

Reserve Bank of India

Public sector banksAllahabad Bank

Andhra Bank

Bank of Baroda

Bank of India

Bank of Maharashtra

Canara Bank

Central Bank of India

Corporation Bank

Dena Bank

IDBI Bank Indian Bank

Indian Overseas Bank

Oriental Bank of Commerce

Punjab & Sind Bank

Punjab National Bank

State Bank of Bikaner & Jaipur

State Bank of Hyderabad State Bank of India

State Bank of Mysore

State Bank of Patiala

State Bank of Travancore

Syndicate Bank

UCO Bank

Union Bank of India

United Bank of India

Bank of India

Type

Public company (BSE: BOI)

Industry

Financial services

Founded

7 September 1906

Headquarters

Mumbai, Maharashtra, India

Key people

Vijayalakshmi R Iyer (CMD)

Products

Commercial Banking Retail Banking Private Banking Asset Management Mortgages Credit Cards

Revenue

243935.0 million (US$4.5 billion)[1]

Operating income

53842.3 million (US$990 million)[1]

Net income

24887.1 million (US$460 million)[1]

Website

www.bankofindia.com

Bank of India (BoI) (BSE: BOI) is an Indian state-owned commercial bank with headquarters in Mumbai, Maharashtra. Government-owned since nationalisation in 1969, It is India's 9th largest PSU bank, after State Bank of India, Punjab National Bank and Bank of Baroda. It has 4187 branches as on 21 April 2012, including 52 branches outside India, and about 1679 ATMs.
[citation needed]

BoI is a founder member

of SWIFT (Society for Worldwide Inter Bank Financial Telecommunications), which facilitates provision of cost-effective financial processing and communication services. The Bank completed its first one hundred years of operations on 7 September 2006.
[citation needed]

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