Types of Asset (संपत्ति):
- Tangible Assets - Physical presence. eg cash, stocks, bonds, property, buildings, equipment, inventory, precious metals and art.
- Intangible Assets - No physical presence. eg. cash, stocks, bonds, property, buildings, equipment, inventory, precious metals and art.
- Financial Asset - Value based on a contract. eg. cash, stocks, bonds, derivatives.
- Fixed Asset - Long lived assets, cannot be easily converted into cash. eg. property building equipment and furniture
- Current Asset - Cash & assets expected to be converted into cash, consumed or expanded in the next year or current operating period,
Source : https://simplicable.com/new/asset
https://debitoor.com/dictionary
Credit - What is a credit?
A credit is an outstanding (not yet paid, resolved, or dealt with) amount that is due to a creditor by a debtor (borrower). In the accounting ledger, this is recorded on the right side of the balance sheet (negative) as it is a decrease in assets.
Accounts receivable - What are accounts receivable?
An amount that is owed to a company by a customer who purchased goods or services on credit
Current assets - What are current assets?
A current asset is either cash or an asset that can be sold (e.g. stock) that can be converted into cash within a year and is often used to pay off current liabilities
Current assets (apart from being ready cash) can be sold or converted into cash within one year of acquisition and play a vital part in managing the cashflow of your business.
What can be considered a current asset?
Generally, current assets consist of your current stock, what's owed to you by your customers (accounts receivable), any short-term investments (such as easy access short-term deposit accounts), and, of course, cash and what's in your current bank account.
Current assets can also vary depending on the type of business. Because current assets include stock and cash equivalents, this means that anything that has the potential to be turned into cash should be recorded as a current asset in your balance sheet.
Your company’s inventory is technically a current asset, however, it should be handled carefully. Inventory can be affected by certain accounting methods and by market fluctuations, so it is important to keep other current assets in mind.
https://debitoor.com/dictionary/current-assets
Gross Block
Gross block is the sum total of all assets of the company valued at their cost of acquisition. This is inclusive of the depreciation that is to be charged on each asset.
= Total Value of Asset ( Its Original Puirchase price+any capex)
Net Block
Net block is the gross block less accumulated depreciation on assets. Net block is actually what the asset are worth to the company.
= Original Value Of Asset( As Above) - Till Date Charged Depreciation
Operating Earning / Profit / Income (EBIT)
Operating Profit is the residual profit after deducting the cost of raw material, employee costs, sales & general expenses etc. from the sales revenue of any year. It shows the profitability of any company before the charges for capital structure (interest expense for debt raised) and capital-intensity (depreciation) of any business or taxes are deducted from sales revenue. OPM measures the profitability purely from core operations of any company without factoring in the non-operating income like interest income or dividend income.
OPM (Operating Profit Margin)
OPM = Operating Profit / Sales Revenue
NPM (Net Profit Margin)
Net Profit is the final amount remaining in the hands of equity shareholders after all possible expenses like interest, depreciation, taxes etc. are deducted from total income (including operating sales revenue and non-operating income). This amount is available to the company for either distributing to shareholders like dividends or investing in company’s operations as shareholder’s incremental contribution in the business.
Current Liabilities
Current liabilities are a company's short-term financial obligations that are due within one year or within a normal operating cycle.
Capital Employed
Capital employed = Total assets − Current liabilities = Equity + Noncurrent liabilities
It also refers to the value of assets used in the operation of a business.
It can be defined as equity plus loans which are subject to interest. To define it properly, capital employed can be expressed as the total amount of capital that has been utilized for acquisition of profits. It also refers to the value of all assets (fixed as well as working capital) employed in a business.
ROCE (Return on Capital Employed)
ROCE = Net Operating Profit / (Total Assets - Current Liabilities)
ROA (Return on Assets)
ROA = Net Income / Total Assets
Asset Turnover Ratio
The asset turnover ratio measures the value of a company's sales or revenues relative to the value of its assets. The asset turnover ratio can be used as an indicator of the efficiency with which a company is using its assets to generate revenue.
Cash Flow from Investing Activities
Cash Flow from Investing Activities is the section of a company’s cash flow statement that displays how much money has been used in (or generated from) making investments during a specific time period. Investing activities include purchases of long-term assets (such as property, plant, and equipment), acquisitions of other businesses, and investments in marketable securities (stocks and bonds).
What do Investing Activities Not Include?
- Interest payments or dividends
- Debt, equity, or other forms of financing
- Deprecation of capital assets (even though the purchase of these assets is part of investing)
- All income and expenses related to normal business operations
NOTE : Capital Expenditure comes under (Investments in Property & Equipment)
What is CapEx?
CapEx (short for capital expenditures) is the money invested by a company in acquiring, maintaining, or improving fixed assets such as property, buildings, factories, equipment, and technology. CapEx is included in the cash flow statement section of a company’s three financial statements, but it can also be derived from the income statement and balance sheet in most cases. This guide will provide a formula for how to calculate CapEx.
Capex = PP&E(current) - PP&E(prior) + Depriciation
PP&E - Property, Plants & Equipments
Cash Flow from Financing Activities
Cash Flow from Financing Activities is the net amount of funding a company generates in a given time period, used to finance its business. Finance activities include the issuance and repayment of equity, payment of dividends, issuance and repayment of debt, and capital lease obligations. Companies that require capital will raise money by issuing debt or equity, and this will be reflected in the cash flow statement.
CFI = Issue/Repurchase Equity + Isuue/Repurchase Debt + Dividend payments and other items.
Financing activities include:
- Issuance of equity
- Repayment of equity
- Payment of dividends
- Issuance of debt
- Repayment of debt
- Capital/finance lease payments
Net cash flow = CFO + CFI