1) Market Capitalization
The total dollar
market value of all of a company's outstanding shares. Market capitalization is
calculated by multiplying a company's shares outstanding by the
current market price of one share. The investment community uses this
figure to determining a company's size, as opposed to sales or total asset
figures.
Frequently referred to as "market cap"
Frequently referred to as "market cap"
2)Market capitalization formula: outstanding shares x
share value = market cap
3) Spin off
The creation of
an independent company through the sale or distribution of new
shares of an existing business/division of a
parent company. A spin off is a type of divestiture.
Businesses
wishing to 'streamline' their operations often sell less productive or
unrelated subsidiary businesses as spin offs.
OR
The process of splitting off certain parts of the
company and found them as seperate independent businesses. The shares of the
new company are given to the shareholders of the existing company (on a pro
rata basis). The transfer of product knowledge and knowledge from the parent to
the newly start up company is the most important aspect
4) What Does Divestiture Mean?
The partial
or full disposal of an investment or asset through
sale, exchange, closure or bankruptcy. Divestiture can be
done slowly and systematically over a long period of time, or in large lots
over a short time period.
5) What Does Discontinued Operations Mean?
A segment of a
company's business that has been sold, disposed of or abandoned. Discontinued
operations can range from a certain product line to an entire line of business.
When operations are discontinued, this is reported on the company's income
statement as separate from income from continued operations.
other explains Discontinued Operations
Because income
from discontinued operations is listed separately on the income statement,
investors are less likely to be misled as to the source of a company's profit.
This is especially useful when companies merge, since parsing out which assets
are being divested or folded up gives a clearer picture of how a company will
make money in the future.
Acquisitions
When one company
takes over another and clearly established itself as the new owner, the
purchase is called an acquisition. From a legal point of view, the target
company ceases to exist, the buyer "swallows" the business and the
buyer's stock continues to be traded.
6) other explains Conglomerate
A coroparation is involved in different kind of
unlreated business. In called conglomerate for example shara group in india
A corporation
that is made up of a number of different, seemingly unrelated businesses
These are
the two philosophies guiding many conglomerates:
1. By participating in a number of unrelated businesses, the parent corporation is able to reduce costs by using fewer resources.
1. By participating in a number of unrelated businesses, the parent corporation is able to reduce costs by using fewer resources.
2. By
diversifying business interests, the risks inherent in operating in a
single market are mitigated.
7) Mergers& Reverse Merger
The combining of two or more companies, generally
by offering the stockholders of one company securities in the acquiring company
in exchange for the surrender of their stock
Varieties of Mergers
From the perspective of business structures, there is a whole host of different mergers. Here are a few types, distinguished by the relationship between the two companies that are merging:
Varieties of Mergers
From the perspective of business structures, there is a whole host of different mergers. Here are a few types, distinguished by the relationship between the two companies that are merging:
·
Horizontal merger - Two companies that are in
direct competition and share the same product lines and markets.
·
Vertical merger - A customer and company or a
supplier and company. Think of a cone supplier merging with an ice cream maker.
·
Market-extension
merger - Two companies that sell the same products in different
markets.
·
Product-extension
merger - Two companies selling different but related products in the
same market.
Reverse Merger
A type of merger used by private companies to
become publicly traded without resorting to an initial public offering.
Initially, the private company buys enough shares to control a
publicly traded company. The private company's shareholder then uses
their shares in the private company to exchange for shares in the public
company. At this point, the private company has effectively become a publicly
traded one.
Also known as a "reverse merger" or "reverse IPO"
Also known as a "reverse merger" or "reverse IPO"
other explains Reverse Takeover – RTO
With this type of merger, the private company does not need to pay the expensive fees associated with arranging an initial public offering. The problem, however, is the company does not acquire any additional funds through the merger and it must have enough funds to complete the transaction on its own.
8) Stock split
What Does Stock Split Mean?
A corporate action in which a company's existing shares are divided into multiple shares. Although the number of shares outstanding increases by a specific multiple, the total dollar value of the shares remains the same compared to pre-split amounts, because no real value has been added as a result of the split.
In the
others explains Stock Split
For example, in a 2-for-1 split, each stockholder receives an additional share for each share he or she holds.
One reason as to why stock splits are performed is that a company's share price has grown so high that to many investors, the shares are too expensive to buy in round lots.
For example, if a XYZ Corp.'s shares were worth $1,000 each, investors would need to purchase $100,000 in order to own 100 shares. If each share was worth $10, investors would only need to pay $1,000 to own 100 shares.
For example, in a 2-for-1 split, each stockholder receives an additional share for each share he or she holds.
One reason as to why stock splits are performed is that a company's share price has grown so high that to many investors, the shares are too expensive to buy in round lots.
For example, if a XYZ Corp.'s shares were worth $1,000 each, investors would need to purchase $100,000 in order to own 100 shares. If each share was worth $10, investors would only need to pay $1,000 to own 100 shares.
9 ) Inventory valuation methods
LIFO,FIFO,
Average Cost (AVCO) Method/weighted average cost of method
Last-In,
First-Out is one of the common techniques used in the valuation of inventory on
hand at the end of a period and the cost of goods sold during the period. LIFO
assumes that goods which made their way to inventory (after purchase,
manufacture etc.) later are sold first and those which are manufactured or
acquired early are sold last..
First-In,
First-Out (FIFO) is one of the methods commonly used to calculate the value of inventory on hand at the end of an
accounting period and the cost of goods sold during the period. This method
assumes that inventory purchased or manufactured first is sold first and newer
inventory remains unsold.
Average
Cost (AVCO) Method
Average cost method (AVCO) calculates
the cost of ending inventory and cost of goods sold for a period on the basis
of weighted average cost per unit of inventory. Weighted average cost per unit
is calculated using the following formula:
Total
Cost of Inventory
Weighted
Average unit cost = ------------------------------
Total
Units in Inventory
11) ABC analysis, and HIFO
What Does Activity-Based Costing - ABC Mean?
An accounting method that identifies the activities that a firm performs, and then assigns indirect costs to products. An activity based costing (ABC) system recognizes the relationship between costs, activities and products, and through this relationship assigns indirect costs to products less arbitrarily than traditional methods.
Other explains Activity-Based Costing - ABC
Some costs are difficult to assign through this method of cost accounting. Indirect costs, such as management and office staff salaries are sometimes difficult to assign to a particular product produced. For this reason, this method has found its niche in the manufacturing sector.
Some costs are difficult to assign through this method of cost accounting. Indirect costs, such as management and office staff salaries are sometimes difficult to assign to a particular product produced. For this reason, this method has found its niche in the manufacturing sector.
Other explains Highest In, First Out - HIFO
Companies would likely choose to use the HIFO inventory method if they wanted to decrease their taxable income for a period of time. Because the inventory that is recorded as used up is always the most expensive inventory the company has (regardless of when the inventory was purchased), the company will always be recording maximum cost of goods sold.
Companies would likely choose to use the HIFO inventory method if they wanted to decrease their taxable income for a period of time. Because the inventory that is recorded as used up is always the most expensive inventory the company has (regardless of when the inventory was purchased), the company will always be recording maximum cost of goods sold.
14) What does u know about data integration?
Data integration involves combining data from several disparate sources,
Like after completion of all the process
the data clubbed into a one report.
17) Ratios, types and debt-equity ratio
Ratios are relationships expressed in mathematical terms
between figures which are connected with each other in same manner.
Activity Ratios,Profitability Ratios, Liquidity Ratios
Current ratio is one of the most fundamental liquidity ratio. It measures
the ability of a business to repay current liabilities with current assets
Current Ratio
=Current Assets/ Current Liabilities
Quick ratio :it measures the ability of a company to pay its
debts by using its cash and near cash current assets (i.e. accounts
receivable and marketable securities).
Quick Ratio
| |
=
|
Cash + Marketable Securities +
Receivables
|
Current Liabilities
|
|
Debt-to-Equity
Ratio
It is a leverage ratio and it measures the
degree to which the assets of the business are financed by the debts and the
shareholders' equity of a business.
Debt-to-Equity Ratio = Total
Liabilities/Shareholders' Equity
Return On
Assets (ROA) Ratio
It measures
efficiency of the business in using its assets to generate net income. It is a
profitability ratio.
ROA = Annual Net Income/Average Total Assets
Price/Earnings
(P/E) Ratio
Price/Earnings
or P/E ratio is the ratio of a company's share price to its earnings per share.
It tells whether the share price of a company is fairly valued, undervalued or
overvalued
P/E Ratio
= Current Share Price/Earnings per
Share
Price to
Book Ratio = Current Share Price/Book
Value per Share
18) Eps and diluted eps
What Does Earnings Per Share - EPS Mean?
The portion of a company's profit
allocated to each outstanding share of common stock. Earnings per
share serves as an indicator of a company's profitability.
Calculated as:
Calculated as:
net income-dividend on preferred stock/average outstanding shares
When calculating, it is more accurate to use a weighted average number of shares outstanding over the reporting term, because the number of shares outstanding can change over time. However, data sources sometimes simplify the calculation by using the number of shares outstanding at the end of the period.
Diluted EPS expands on basic EPS by including the shares of convertibles or warrants outstanding in the outstanding shares number.
What Does Diluted Earnings Per Share - Diluted EPS Mean?
A performance metric used to gauge the quality of a company's earnings per share (EPS) if all convertible securities were exercised. Convertible securities refers to all outstanding convertible preferred shares, convertible debentures, stock options (primarily employee based) and warrants. Unless the company has no additional potential shares outstanding (a relatively rare circumstance) the diluted EPS will always be lower than the simple EPS.
A performance metric used to gauge the quality of a company's earnings per share (EPS) if all convertible securities were exercised. Convertible securities refers to all outstanding convertible preferred shares, convertible debentures, stock options (primarily employee based) and warrants. Unless the company has no additional potential shares outstanding (a relatively rare circumstance) the diluted EPS will always be lower than the simple EPS.
other explains Diluted Earnings Per Share - Diluted EPS
Remember that earnings per share is calculated by dividing the company's profit by the number of shares outstanding. Warrants, stock options, convertible preferred shares, etc. all serve to increasing the number of shares outstanding. As a shareholder, this is a bad thing. If the denominator in the equation (shares outstanding) is larger, the earnings per share is reduced (the same profit figure is used in the numerator).
Remember that earnings per share is calculated by dividing the company's profit by the number of shares outstanding. Warrants, stock options, convertible preferred shares, etc. all serve to increasing the number of shares outstanding. As a shareholder, this is a bad thing. If the denominator in the equation (shares outstanding) is larger, the earnings per share is reduced (the same profit figure is used in the numerator).
19) Why u have applied for it.
As
the required criteria exactly matching with my profile and my potentially, and I
feel that I am eligible for the said position.
20) What Does Tax Deferred Mean?
Investment earnings such as interest, dividends or capital gains that accumulate tax free until the investor withdraws and takes possession of them. The most common types of tax-deferred investments include those in individual retirement accounts (IRAs) and deferred annuities.
other explains Tax Deferred
By deferring taxes on the returns of an investment, the investor benefits in two ways. The first benefit is tax-free growth: instead of paying tax on the returns of an investment, tax is paid only at a later date, leaving the investment to grow unhindered. The second benefit of tax deferral is that investments are usually made when a person is earning higher income and is taxed at a higher tax rate. Withdrawals are made from an investment account when a person is earning little or no income and is taxed at a lower rate
By deferring taxes on the returns of an investment, the investor benefits in two ways. The first benefit is tax-free growth: instead of paying tax on the returns of an investment, tax is paid only at a later date, leaving the investment to grow unhindered. The second benefit of tax deferral is that investments are usually made when a person is earning higher income and is taxed at a higher tax rate. Withdrawals are made from an investment account when a person is earning little or no income and is taxed at a lower rate
21) What Does Minority Interest Mean?
Minority Interest:
minority interest refers to the equity of the minority shareholders in a subsidiary company.
1. A significant but non-controlling ownership of less than 50% of a company's voting shares by either an investor or another company.
2. A non-current liability that can be found on a parent company's balance sheet that represents the proportion of its subsidiaries owned by minority shareholders.
other explains Minority Interest
1. In accounting terms, if a company owns a minority interest in another company but only has a minority passive position (i.e. it is unable to exert influence), then all that is recorded from this investment are the dividends received from the minority interest. If the company has a minority active position (i.e. it is able to exert influence), then both dividends and a percent of income are recorded on the company's books.
2. If ABC Corp. owns 90% of XYZ inc, which is a $100 million company, on ABC Corp.'s balance sheet, there would be a $10 million liability in minority interest account to represent the 10% of XYZ Inc. that ABC Corp does not own.
1. In accounting terms, if a company owns a minority interest in another company but only has a minority passive position (i.e. it is unable to exert influence), then all that is recorded from this investment are the dividends received from the minority interest. If the company has a minority active position (i.e. it is able to exert influence), then both dividends and a percent of income are recorded on the company's books.
2. If ABC Corp. owns 90% of XYZ inc, which is a $100 million company, on ABC Corp.'s balance sheet, there would be a $10 million liability in minority interest account to represent the 10% of XYZ Inc. that ABC Corp does not own.
22) What Does Affiliate Mean?
A type of inter-company relationship in which one of the companies owns less than a majority of the other company's stock, or a type of inter-company relationship in which at least two different companies are subsidiaries of a larger company.
others explains Affiliate
For example, let's say BIG Corp. owns 40% of MID Corp.'s common stock and 75% of TINY Corp. In this case, MID Corp. and BIG Corp. have an affiliate relationship, and TINY Corp. is BIG Corp.'s subsidiary.
However, note that for the purposes of filing consolidated tax returns, IRS regulations state that a parent company must possess at least 80% of a company's voting stock in order to be considered affiliated.
For example, let's say BIG Corp. owns 40% of MID Corp.'s common stock and 75% of TINY Corp. In this case, MID Corp. and BIG Corp. have an affiliate relationship, and TINY Corp. is BIG Corp.'s subsidiary.
However, note that for the purposes of filing consolidated tax returns, IRS regulations state that a parent company must possess at least 80% of a company's voting stock in order to be considered affiliated.
24) Equity affiliate
An accounting technique used by firms to assess the
profits earned by their investments in other companies. The firm reports the
income earned on the investment on its income statement and the reported value
is based on the firm's share of the company assets. The reported profit is
proportional to the size of the equity investment. This is the standard
technique used when one company has significant influence over another
25) What Does Income From Operations - IFO Mean?
The profit realized from a business' own operations. Income from operations is generated from running the primary business and excludes income from other sources. For example, this would exclude income generated from selling the property of a manufacturing company.
The profit realized from a business' own operations. Income from operations is generated from running the primary business and excludes income from other sources. For example, this would exclude income generated from selling the property of a manufacturing company.
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