Tag Archives | Business

Difference between Company and a Partnership Firm | India | Accounting

The upcoming discussion will update about the difference between company and a partnership firm. Difference # Company: 1. A Company is regulated by the Companies Act, 1956. 2. A Company must be registered. 3. A Company has a separate legal existence distinct from its shareholders. 4. The minimum number of persons required to form a […]

Evaluating Goodwill of a Business: 4 Methods | Accounting

The following are the methods of evaluating goodwill:- 1. Average Profit Method  2. Super Profit Method  3. Capitalisation Method  4. Annuity Method. Method # 1. Average Profit Method: Under this method goodwill is valued on the basis of an agreed number of years’ purchase of the average maintainable profits. The maintainable profit indicates the adjusted […]

Factors Affecting Valuation of Goodwill | Business

In this article we will discuss about the internal and external factors affecting the valuation of goodwill of a business.  Internal Factors Affecting Valuation of Goodwill : (1) If risk is less in a business, then the amount of goodwill will be more than those businesses in which risks are more. (2) If quality of […]

10 Important Factors Affecting Goodwill | Business

The main factors affecting the goodwill are as follows:-  1. Suitable Location of the Business 2. Managerial Skill 3. Nature of Business 4. Risk in Business 5. Favourable Contracts 6. Trend in the Profit 7. Possession of Patent and Trade Marks 8. Capital 9. Government Patronage 10. Other Factors. Factor # 1. Suitable Location of […]

Goodwill: Definition, Nature and Features | Business

In this article we will discuss about:- 1. Definition of Goodwill 2. Nature of Goodwill 3. Features 4. Need for Valuation 5. Accounting Treatment. Definition of Goodwill: Goodwill is a thing easy to describe, but very difficult to define. It is the benefit and advantage of good name, reputation and connection of a business. It […]

Types of Insurance Business in India | Company

Indian Insurance business can be divided into two categories: (A) Life Insurance (B) General Insurance: which includes (a) Fire Insurance (b) Marine Insurance (c) Miscellaneous Insurance (A) Life Insurance: Life insurance is a contract in which insurer, in consideration of a premium, undertakes to pay a certain sum of money either on the death of […]

Insurance: Meaning and Legal Framework | Business

In this article we will discuss about:- 1. Introduction to Insurance 2. Meaning of Insurance 3. Legal Framework for Insurance Business. Introduction to Insurance: There is always an element of uncertainty about the future. This compels man to take necessary steps to protect himself against unforeseen calamities. Man is always fighting for safety since the […]

Reasons for Centralizing Finance Function

The argument in favour of centralizing the finance function is based on the following reasons:- 1. Strategic Decisions 2. Cash-Flow 3. External Orientation 4. Coordination 5. Financial Discipline 6. Information Flow. Reason # 1. Strategic Decisions: Many of the strategic decisions like setting up of financial goals, investment in capital projects, raising of finances through […]

Working Capital Management Strategies

The following points highlight the top approaches of working capital management strategies. They are:- 1. Conservative Approach 2. Aggressive Approach 3. Matching Approach 4. Zero Working Capital Approach 5. Working Capital Policies. 1. Conservative Approach: A conservative strategy suggests not to take any risk in working capital management and to carry high levels of current […]

Working Capital: Meaning and Components | Business

In this article we will discuss about:- 1. Meaning of Working Capital 2. Components of Working Capital 3. Gross and Net Working Capital 4. Permanent and Temporary Working Capital 5. Positive and Negative Working Capital 6. Objectives. Meaning of Working Capital: Working capital management is a significant in financial management due to the fact that […]

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