Business mathematics

2. BUSINESS MATHEMATICS Importance of Interest Calculation in a Bank Types of Interest – Simple / Flat Interest - Compound Interest Importance of Rule 72 Annuities & its importance

3. BUSINESS MATHEMATICS Annuities are essentially series of fixed payments required from you or paid to you at you at a specified frequency over the course of a fixed period of time FV of Annuities PV of Annuities

4. BUSINESS MATHEMATICS Chapter – 2 – Calculation of YTM Sources of Finance - Debt – Bonds / Debentures - Capital - Loans Bonds – Face Value, Coupon Rate, Maturity / Period, Redemption Value, Market Value

6. BUSINESS MATHEMATICS 3. Capital Budgeting Techniques Decision Making – to acquire or not to acquire the capital goods. Present Value = P = M / (1+r)n - Pay Back Period - IRR - NPV - PI - Sensitivity Analysis

7. BUSINESS MATHEMATICS 4. Depreciation – Different Methods a. Straight Line Method b. Declining / Diminishing Balance Method c. Accelerated Depreciation. d. Sum of year’s Digit method AS-6 deals with Depreciation Accounting

9. Definition & scope of Book-keeping Accounting is often called the language of business. Book-keeping and Accounting not one and the same – Book-keeping means recording the business Transactions. Accountancy means compilation of accounts in such a way that one is in a position to know the state of affairs of the business.

10. Definition & scope of Book-keeping Financial Statements: - Manufacturing Accounting. - Trading Account - Profit & Loss Account - Balance Sheet - Funds Flow (Changes in Financial Position) - Cash Flow Statement

11. Definition & scope of Book-keeping Basic objective of Accountancy- to provide information to various users. Income Tax Authorities Sales Tax Authorities Share holders Investors Business Associates Directors Banks for lending purpose

12. Definition & scope of Book-keeping Purpose: - To know the Profit & Loss - To know the Financial position & Liabilities position - To interpret the Financial Position Objectives: - To keep a systematic record - To ascertain the results of the operations - To ascertain the financial position of business - To facilitate rational decision-making - To satisfy the requirements of law

13. Definition & scope of Book-keeping Advantages: - For Economic Decisions - To provide information to Investors - To compare the financial position Types of Accounting: - Financial Accounting - Cost Accounting - Management Accounting - Social Responsibility Accounting - Human Resource Accounting - Inflation Accounting

14. Definition & scope of Book-keeping Accounting Standards: -Accounting Standards Board (ASB) – The council of ICAI may mandate such standards. The council of ICAI will consider the final draft and if found necessary modify the same in consultation with ASB.

15. Definition & scope of Book-keeping - AS-1 Disclosure of Accounting Policies - AS-2 Valuation of Inventories - AS-3 Cash Flow Statements - AS-4 Contingencies and events occurring after balance sheet - AS- 5 Changes in Accounting Policies - AS – 6 Depreciation Accounting etc.

19. Two systems of keeping records - Single entry system - Double entry system Journal / Subsidiary Books and Ledger Recording keeping Basics - Recording - Classifying - Summarizing