Question: Explain me in detail with example what is "double taxation"?

Answer: Double taxation occurs when tax is paid more than once on the same taxable income or
arise when two or more tax jurisdictions prescribe comparable taxes for the same taxa
Company, the company pays tax on its whole profit as well as when this profit is distribut
pay tax individually as well

Question: Define threats.

Answer: Threats are unfavourable events or circumstances that may hinder the company in the
Strategic early warning, SWOT analysis.

Question: What is inventory management?

Answer: Inventory management can be explained as the procedures that govern the different aspec
stored, handled, and issued.

Question: What is meant by s-type business and also explain the public and private limited companies?
Answer: S type of corporation means all the organizations in which members or shareholders are in
tax on its profit.

Question: What is meant by public limited companies?

Answer: Public limited company is a company in which general public is invited for the members
that issues shares, debentures etc through an initial public offering to the general public a
exchange.

Question: What is meant by private limited companies?

Answer: Private companies may issue stock and have shareholders. However, their shares do no
issued through an initial public offering.

Question: What is meant by Capital Market?

Answer: Capital market is the market for securities, where companies and governments can raise lo
invested for periods longer than a year. Stock exchanges are the examples of capital marke

Question: What is dividend?

Answer: This is the part of the organization’s profit which is distributed among the shareholders of t

Question: What is the difference between S Type Corporation and Corporation?

Answer: S type of corporation means all the organizations in which members or shareholders are in
tax on its profit. Corporation is a simple or the regular corporation is the organization i
combine profit as well as the shareholders have to pay tax on individual profits. vuzs

Question: What are debt and equity?

Answer: Debt is the amount which is owed by the company and invested into the business. Equity
 shareholders of the organization.

Question: What are "PERSONAL CORPORATIONS"?

Answer: These are the corporations which are formed by the persons of similar profession like a c
private hospital is maintained by the doctors etc.

Question: What do you mean by financial engineering?

Answer: Financial engineering is the creation of new and improved financial products through inno
financial instruments

Question: Explain retained earnings.

Answer: Retained Earnings is the net profits or earnings retained by the company rather than disbu
dividends. Retained earnings are used to improve the business through development progra

Question: What is the function in financial management?

Answer: Financial Management deals with the acquisition and management of the financial resource

Question: What's the scope of Financial Management and how we can compare with financial Accounting?
Answer: Financial accounting is a major branch of accounting involving the collection, recording
and the summary of it in the form of a periodic profit and loss account, a balance sheet a
with legal, professional, and capital market requirements. As against it, financial managem
organizing, and controlling of the monetary resources of an organization. Financial manag
management of company, whereas, financial accounting is carried out for reporting to e
position and condition of the company.

Question: What is the difference between direct and indirect securities?

Answer: Direct securities are in different forms such as shares of any company, bonds and the de
future contracts, options, swaps etc.

Question: What is the difference between common stocks and preferred stocks?
Answer: Common stock is the regular shares in a company that give you ownership of a fraction of
of shares which is representing partial ownership, also called equity, in a corporation. Pref
but takes precedence in claims against the company’s profits and assets.

Question: Why intrinsic value is always less then market value?

Answer: In market value, we consider the price of the assets which is prevailing in the market it
appreciations deterioration etc. But in intrinsic value we always take into account the exp
the discounting factor, depreciation, deterioration, appreciations etc. that’s why intrinsic va

Question: What is a Derivative?

Answer: The derivative itself is merely a contract between two or more parties. Its value is deter
 asset.

Question: What are financial products?

Answer: Financial products refer to those instruments that help you save, invest, get insurance
options, warrants etc. www.vuzs.info

Question: What is the financial deepening in the economy?

Answer: Financial deepening is a term used often by economic development experts. It refers to the
with a wider choice of services geared to all levels of society.

Question: Define financial accounting.

Answer: The area of accounting concerned with reporting financial information to interested extern
accounting that provides economic and financial information on investors, creditors, and ot

Question: What is the difference between financial accounting and financial management?
Answer: Financial accounting is a major branch of accounting involving the collection, recording
and the summary of it in the form of a periodic profit and loss account, a balance sheet a
with legal, professional, and capital market requirements. As against it, financial managem
organizing, and controlling of the monetary resources of an organization. Financial manag
management of company, whereas, financial accounting is carried out for reporting to e
position and condition of the company.

Question: What is Accelerated Depreciation?

Answer: A depreciation method which allows faster write-offs than the straight line method. This m
than straight line depreciation.

Question: Explain Double Declining Balance Depreciation.

Answer: Method of accelerated depreciation, in which double the straight-line depreciation amount
percentage, is applied to the un-depreciated amount in subsequent years.

Question: What is Liquidation value of a business?

Answer: The estimated total amount that could be realized from selling the business's individual as
liabilities.

Question: What are corporate bonds?

Answer: A Corporate Bond is a bond issued by a corporation. It is a bond that a corporation issu
business

Question: Define a portfolio.

Answer: A portfolio is a list of holdings in securities owned by an investor or institution. Or a collec

Question: What is the difference between MVA (Market value added) and EVA (Economic Value Added)?
Answer: Market value added (MVA) is a calculation that shows the difference between the mar
contributed by investors (both bondholders and shareholders). In other words, it is the su
company plus the market value of debt and equity. The formula to calculate market value
capital Economic Value Added – EVA is a measure of a company's financial performance
by deducting cost of capital from its operating profit

Question: What is the difference between bond and debenture?

Answer: Debentures and bonds are similar, but bonds are more secure than debentures. In the case
interest that does not change in value irrespective of the fortunes of the company. However
and carry a lower interest rate. In the case of bonds, the company provides collateral for th
bondholders will be paid off before debenture holders. A debenture is more secure than a s
of bankruptcy, you have no collateral you can claim from the company. To compensate for
to debenture holders.

Question: What does the term Inventory turnover imply?

Answer: This ratio measures the number of times, on average; the inventory is sold during the period

Question: What is the difference between stock and capital?

Answer: Funds provided by owners of a business in return for shares of ownership or a portion of m
And the capital of corporation is divided into small units and each unit is called a share.
corporation. For example the share capital of ABC firm is Rs. 100,000 and it is divided in
shares will be 10,000. www.vuzs.info

Question: Why is the dividend paid to the preferred shareholders before the common shareholders?
Answer: Both of these are classes of shareholders. Mostly the preferred shareholders are paid divid
the profits which are left are available for the common shareholders. Common sharehol
profits are all for them, it may happen that their dividend is more than the preferred sha
have blended features of debentures and common share.

Question: Define Risk free interest rate.

Answer: Risk free interest rate is the theoretical rate of return attributed to an investment with ze
interest on an investor's money that he or she would expect from an absolutely risk-free in
In theory, the risk-free rate is the minimum return an investor should expect for any investm
tolerated unless the expected rate of return was greater than the risk-free rate. In practi
technically exist; even the safest investments carry a very small amount of risk.

Question: Explain Direct & Indirect cash flow Statements.

Answer: Indirect method cash flow statement: It begins with the net income figure taken from the in
and then makes several adjustments which fall under three main headings: (1) Expense
outflows not recorded as expenses; and (3) Revenues not involving cash inflows. These adj
cash-flow from operating activities. Direct method cash flow statement: It begins with cas
paid for operating expenses is deducted to arrive at the net cash flow from operating activit
not generate any cash flow; however, its value depends on the value of the underlying asset
Question: What is the capital outflow? How it is related to trade balance?
Answer: Capital outflow is an economic term describing capital flowing out of (or leaving) a part
any number of economic or political reasons. Trade balance is the part of a nation's balanc
exports that is trade in goods and services, over a given period. If capital outflow exceed c
be unfavorable.

Question: What is Ageing Schedule?

Answer: A list of accounts receivable broken down by number of days until due or past due.

Question: What does the term Unrealized gain refer?

Answer: Profit which has been made but not yet realized through a transaction, such as a stock w
held. Unrealized profits are usually not taxable.

Question: What is Window Dressing?

Answer: It is the act or an instance of making something appear deceptively attractive or favorab
mutual fund and portfolio managers near the year or quarter end to improve the appearance

Question: What is the difference between simple interest and discrete compound interest?
Answer: Simple interest is calculated on the original principal only. Accumulated interest from pri
the following periods. Simple interest is normally used for a single period of less than a
interest is calculated each period on the original principal and all interest accumulated du
may be stated as a yearly rate, the compounding periods can be yearly, semiannually, quart

Question: What is the purpose or meaning of pro forma cash flow statement?
Answer: Pro forma means based on projection or estimation. So, its means pro forma cash flo
prepared for future based on estimation.

Question: What is a forecast?

Answer: Forecast means prediction in advance. It is the process of estimation in unknown situations

Question: Define lumpy asset.

Answer: Lumpy assets are the assets that cannot be acquired in small increments but must be obt
words the assets of which you have to maintain a minimum inventory level. For example
one time—not half a plant one year, and another half several years later.

Question: What does the term Compounding cycle means?

Answer: Compounding cycle is the time after which compounding takes place (like once a year, 2
interest is paid 2 times in a year, then compounding cycle will be half year or semiannually

Question: Explain discounting

Answer: Discounting is actually calculating the present value of a future amount. Discounting is
cash flows at one point in time so that we can make better decisions. Like, Rs. 2000 today
you have to make decisions regarding future cash flows, you must discount the cash flows.

Question: Define opportunity cost.

Answer: Opportunity cost is actually the cost of passing up the next best choice when making a d
capital is used for one purpose, the opportunity cost is the value of the next best purpose th

Question: What is discounting cash flow?

Answer: Discounting is actually calculating the present value of a future amount. So, discount
calculating their present value.

Question: What does the term rate of return mean?

Answer: Rate of return is the annual rate of return on an investment, calculated as a percentage of th
your money in bank and you are paid 10% return, that 10% is the rate of return.

Question: What is the difference between Periodic Interest Rate & Effective Interest Rate?
Answer: The periodic interest rate, sometimes called the nominal rate, is the interest rate a lender
the percentage of interest charged at each compounding period. The periodic interest rate c
interest rate by the number of compounding periods per year. Effective Interest Rate is the
on a deposit account, depending on the frequency of compounding or effect of inflation.
interest which ignores compounding and other factors. For example, the stated rate of in
which is the nominal rate; whether the interest is paid quarterly, semiannually, monthl
effective interest rate is calculated that is the interest rate on a debt or debt security
compounding. For example, if one has a fixed-income investment that pays 3% interest eac
(for each month). The annual effective rate of interest is more than 3% because compoundi
greater principal each month on which the interest rate is calculated.

Question: What is the difference between stock holder and stack holder?
Answer: Stockholders are the shareholders of a firm which are the owners of that firm. While, the s
with an interest in the success of an organization. Stakeholders may include suppliers, c
stockholders as well.

Question: Define NPV and IRR.

Answer: The present value of a series of future net cash flows that will result from an investm
investment is known as Net present value (NPV). The discount or interest rate at which t
equal to zero is called Internal rate of return (IRR).

Question: What is the difference between Annuity and Perpetuity.

Answer: An annuity is a series of equal cash flows occurring for a specific time period (that has ce
annuity that has no definite end or a stream of cash payments that continues forever.

Question: What is the difference between Ordinary annuity and annuity due?
Answer: An ordinary annuity is a series of equal cash flows occurring for a specific time period
period. Annuity due is a series of equal cash flows occurring at the beginning of equal inter