Article Categories
- All Categories
-
Data Structure
-
Networking
-
RDBMS
-
Operating System
-
Java
-
MS Excel
-
iOS
-
HTML
-
CSS
-
Android
-
Python
-
C Programming
-
C++
-
C#
-
MongoDB
-
MySQL
-
Javascript
-
PHP
Articles by Nagasravan Tamma
Page 9 of 27
What is the merger model and the factors considered?
Merger model gives a detailed analysis of possible combinations of companies. Merger model acts as an intensive tool and is used by banks and merger and acquisitions professionals.It is a feasibility study carried before amalgamations. Companies hire investment and valuation professionals to estimate the value. Based on the value, companies make decisions whether to go forward or not.FactorsThe factors considered in merger model are as follows −Purchase considerationsThe main thing to keep in mind is, whether there is an increase in Earnings per share (EPS) or decrease in EPS. Companies must take care that the process does not lead to ...
Read MoreExplain vertical integration in strategic management
Vertical integration means one company takes control over another company or companies who are in the same product (either in distribution or in production) to gain control over the total chain of product.Companies prefer this type of integration because the supplier is unreliable, high prices may be charged, to earn more margins and for a significant growth of industry.Types of vertical integrationThe types of vertical integration are as follows −Backward integration − When a company gains control over the raw material supply company.Forward integration − When a company gains control over a distribution/logistic company.Balance integration − Mixture of both forward ...
Read MoreExplain the concept of takeover in business
Takeover is the process of acquiring a control over another business unit by controlling their assets, either directly or indirectly.Generally, takeovers are done by either hostile or friendly approach. They are common in larger business units and help the external growth of a business.ReasonsThe reasons for a takeover in a business are as follows −Market share.Increase intangible assets.Diversification.Decrease competition.TypesThe types of takeovers are as follows −Friendly takeover − Takeover is done after negotiations and agreements.Hostile takeover − Takeover is done by buying the required number of shares in a targeted company in an open market.Bailout takeover − Takeover is done ...
Read MoreExplain acquisition and its types
Acquisition means one company takes control over another company by acquiring more than 50% of shares of the targeted company. Some of the reasons for acquisition are increased market share, diversification, cost reductions, etc.Acquisition structure is the organized framework for acquisition of a company. It considers both cash and non-cash (earn outs, equity rolled, take backs etc.).There are 3 types in acquisition structure, which is as follows −Stock purchase − Buys stocks from targeted companies' stockholders.Asset purchases − Buys only assets and liabilities mentioned in agreement.Merger.PurposeListed below are the purposes for an acquisition −Improve performance.Increase production by technology.Acquisition at early ...
Read MoreExplain Merger and its types
With change in market environments and evolving needs of customers, companies need to change their strategies and their dimensions to sustain and increase their market share.Merger is nothing but, when two companies combine to form a new company due to several reasons. The main motive is to expand their arms, explore new markets, increase their market share, decrease operational cost, etc.Terms used in merger are Acquiring Company and acquired company. Mergers can be done either by cash or by stock.In a cash merger, the acquiring company will pay in cash for the acquired company stocks.In a stock merger, the acquiring ...
Read MoreWhat is the return outward book and give its format?
This book records the goods returned to suppliers. It is also called a purchase return day/ outward book. Goods return affects the companies' total purchases or accounts payable.Return outwards reduces business payables for suppliers and business expenses.Journal entryThe journal entry for a return outward book is as follows −Supplier's A/cDebitTo Return outwards A/cCreditHow it affects businessReduces accounts payables. Both sale return and purchase return are reversed and purchase or sale is nullified. These deductions are shown in the trading account. To these entries a separate book called "purchase returns book" is maintained.The return outward process is explained below with the ...
Read MoreExplain the return inward book and give its format
Goods returned from customers are recorded in return inwards book.Return inwards reduces the business total accounts receivables. For business, return inwards decrease the revenue and for the customer, it decreases the receivables for business.Journal entryThe journal entry for a return inward book is as follows −Return inwards A/c To customers AcDebit CreditThe reasons for inward returns are as follows −Incorrect goods.Not the required quantity.Defective goods.Defects arose in the warranty period.Expired goods.AdvantagesThe advantages for the return inward book are as follows −Reason for return is known (like quantity, quality, value etc.)Obtain total amount of sale return.Reduces clerical work.Detects errors ...
Read MoreExplain the different types of books of accounts
Books of accounts are defined as "a place where all financial information is related to a person or a business". Books of accounts are maintained under Income tax Act, companies Act 2013 and GST Act.Maintaining books of accounts is compulsory if the turnover/gross receipts/sales from profession or business is above Rs.2500000/-. As per rule 6F, cash books, ledgers, bills/receipts (Bills), journals and daily cash registers come under books of accounts.TypesThe two main types of the books of accounts are journal and ledger.Journal is sub classified into the following −Purchase Day book − Original book of entry which records credit purchases ...
Read MoreWhat are Petty cash books?
Petty cash books are small cash books which record day to day minor business expenditures. Minor business expenditures include newspaper, fuel, casual labour etc.The person who handles petty cash and their recordings is known as petty cashier. Petty cash books have both debit and credit side and it records all the receipts on the debit side and all payments on the credit side just like a general cash book.Maintaining petty cash booksPetty cash books are maintained using following systemsOpen/ordinary system − Chief cashier gives a lump sum amount to petty cashier for a fixed time and after that fixed period ...
Read MoreDefine cash books and its types
The word “cash” represents the monetary instruments (currency etc.) and the word “book” represents the record available in written format. Thus, a cash book can be defined as the record of business transactions in a particular period.In other words, a cash book records all transactions of cash receipts and disbursements (includes both bank deposits and withdrawals). Cash book is divided into two parts namely, cash payments and cash receipts.Transactions which are not recorded or are excluded in cash book are as follows −Transactions related to bank (payments made through checks in receiving or paid).Non-cash transactions.Discount making or discount received.Cash book ...
Read More