## Liquidity Ratios(Current,Quick,Cash) | Finance I

Liquidity Ratios:

Liquidity ratio is an financial ratio which measures the liquidity position and short term solvency indicating the company’s ability to meet short-term obligations.The most common ratios under this group are:Current ratio,Liquid or quick or acid test ratio and cash ratio.

1.Current ratio(Working Capital Ratio)

Current ratio is the relationship between current assets and current liability.The main objective of this ratio is to measure the ability of the firm to meet its short term obligations.

Current Ratio= Current Assets /Current Liabilities

Note: Higher the current ratio better is the liquidity position of the firm.If it is less than standard ratio,it shows the bad solvency position and vice-versa.For many type of business ,2:1 is considered to be an adequate ratio. Low current ratio indicates that cash ,marketable securities,accounts receivable inventory should be increased.

2.Liquid Ratio or Quick Ratio Or Acid Test Ratio:

The purpose of this ratio is to test the ability of the firm for immediate payment of current liabilities.The relationship between quick(liquid) assets and current liability is termed as quick ratio.Quick Assets includes all the current assets other than stock and prepaid.

Liquid or Quick Ratio= Liquid or Quick Assets/ Current Liabilities

Note: More or less standard ratio is not favourable for the firm. The liquid ratio of 1:1 is considered to be an adequate ratio.

3.Cash Ratio:

Cash Ratio is calculated by dividing high liquid assets by current liabilities.

Cash Ratio=  (Cash +Marketable Securities)/ Current Liabilities

Note: A low cash ratio may not matter if the firm can borrow on short notice.

## Ratio Analysis|Uses Of Financial Ratio | Finance I |Management

Ratio Analysis:

Ratio Analysis is an meaningful technique of measuring operating performance and evaluating managerial performance of a firm. In other words it is an assessment or evaluation of financial activities and mapping the results to point out basic strengths and weakness.

Uses of Financial Ratio

• It helps to analyze the liquidity position or the ability of the firm to meet its current obligations.
• It helps to increase the operating efficiency and performance of the firm.
• It utilizes various assets in generating sales revenue.
• It is also useful for assessing the long-term solvency or long-term financial viability of a firm by borrowing funds.
• It helps to compose between the corporations within industry.
• It is helpful to measure the overall profitability of the organization.
• It helps to locate the weak spots of business.
• It is also helpful for making financial decision of firm.
• It is also helpful for future forcasting, decision making ,corrective actions and cost control.

# Major Corporate Social Responsibility

Organizations have great responsibility for the welfare of the society and the environmental protection. The major corporate social responsibility are as follows:

Responsibility towards Shareholders:

Shareholders invest capital in the business and bear risks .They want return of their investment from the business.So,they have interest in the development and prosperity of their business.Therefore,the business organization has responsibility toward them as they invest money and grow business.The amin responsibilities of business towars shareholders are proper utilization of investment ,fair dividends,fair interest,providing up-to-date information of financial transactions,maximize value of investment ,allowing them to participate in planning and policy making,etc.

Responsibility toward customers:

Customer satisfaction is the ultimate goal of business organization.They are the key source of earnings.Business organization need to satisfy their customers by producing goods and services of their choice and demand .Business cannot be successful unless customers are satisfied.The responsibilities of business toward customers are providing quality products at reasonable price,adequate quantity when needed,good behaviour,avoid unfair practices like black marketing,provide after-sales service ,etc

Responsibility toward employees:

The success of business largely depends on motivated employees .They are the assets of the business and their welfare and wellbeing should be the main concerned of the management. They should be treated as a part of the organization and encouraged them to produce higher productivity.They should be properly trained and provide monetary and non-monetary benefits.The main responsibilities of business toward employees is to provide meaningful job and job security,to provide fair wages and other benefits,provide welfare facilities like sports ,education,medical,etc, creating favourable working environment,conducting training and development programs.

Responsibility toward government:

All business activities should be conducted within the rules and regulations of the government Government protects and controls the activities of business.It allows business organizations to operate within certain norms.Therefore,cooperation of government is essential to business sector.The business organization must fulfill the responsibilities toward the government by  following government rules and laws,pay different taxes such as VAT,income tax,custom duty ,etc,avoid monopoly and unfair trade practices,support national problems such as unemployment and poverty ,etc.

Responsibility toward Society or Community:

Business Organizations perform their business activities in the society. Their success also depends on wellbeing of the whole society.Therefore,business organizations have some responsibilities toward society or community.They are to create employment opportunities to the people,to maintain environmental ecology,proper utilization of society’s resoures,to promote the program of community welfare services,to maintain the social and cultural values etc.

Business statistics is the science of good decision making in the face of uncertainty and is used in many disciplines such as financial analysis, econometrics, auditing, production and operations including services improvement, and marketing research.

### Course Objectives

The aim of the course is to develop competency and ability to use statistical techniques in conducting research and project work. The emphasis of the course is more on interpretation of results and understanding of the strengths and limitations of different statistical measures.

### Course Description

This course has a business focus. The course covers fundamentals of descriptive and inferential statistical techniques. The contents include data summaries and descriptive statistics; introduction to a statistical computer package; Probability: distributions, expectation, variance, covariance, statistical inference of univariateand bivariate data for hypothesis testing.

### Course Outcomes

By the end of this course students would be able tounderstand and use the descriptive and inferential statistical tools used in business decision making ,select  an appropriate graph to describe a distribution,calculate and interpret the shape, center and spread of a distribution,understand the problem of inference when working with the results from random samples, andanalyze the data using excel.

### Course Contents

Unit I Introduction                                                                                                     5 hours

Basic concepts of statistics, Terminologies associated with statistics such as populations and samples, Variables (Dependent and independent only) , Types and sources of data , Descriptive and inferential statistics,  Data processing (editing and coding), Applications of statistics in business and management.

Unit II Describing Data: Graphs and Tables                                                  6 hours

Data array, Stem and leaf Display, Frequency tables, Histograms, Polygon, Cumulative Polygon, Scatter plots, Simple Bar and Pie charts, Cross tabulation

Unit III Describing Data: Summary Measures                                                           10 hours

Central Location:  Mean, Median and Mode

Non Central Location: Quartiles, Deciles and Percentiles

Dispersion: Range, Interquartile range, Variance,   Standard deviation, Coefficient of variation, Index for qualitative variation (IQV)

Shape: Crude measure (comparison of mean, median, and mode), Five number summary,                                  Box plot

Inequality Measure: Gini concentration ratio

Unit IV Basics of Probability Theory                                                             5 hours

Basic concepts, Counting rule, Objective and subjective probability, Marginal and joint probability, Addition rule, Conditional probability, Multiplication rules.

Unit V  Probability Distributions                                                                                10 hours

Discrete probability distribution (Binomial and Poisson distribution and mean and standard deviation of their distributions), Continuous probability distribution: Normal distribution, Normal approximation of Binomial and Poisson distribution

Unit VI Estimation and Hypothesis Testing                                                  12 hours

Concept of estimation, Confidence intervals, confidence intervals for means and proportions        (one sample case only ), Test of significance, p-value approach to hypothesis testing, connection between confidence intervals and hypothesis testing, comparing two means (two sample z and t- test procedures), and comparing two proportions.

Basic Books

Davis, G., & Pecar, B. Business Statistics using Excel. New Delhi: Oxford University Press

Berenson, M. L. & David M. L.  Basic Business Statistics: Concepts and Applications.  Upper Saddle River, New Jersey: Pearson Prentice Hall of USA.

References

Levin, R. I., & David S. R. Statistics for Management.  New Delhi: Prentice Hall of India

Allbright, S. C., Winston, W., & Zappe, C. J.  Data Analysis and Decision Making with Microsoft Excel.  Pacific Grove: Duxubury Press.

Argyrous, G.  Statistics for Research with a Guide to SPSS . New Delhi: Sage South India Edition

Whigham, D. Business Data Analysis using Excel. New Delhi: Oxford University Press

# ENG 201 Business Communication I

Business communication is any form of communication, verbal or nonverbal, that is used to relay a message, promote a product or service or share information.The sharing of information between people within an enterprise that is performed for the commercial benefit of the organization. In addition, business communication can also refer to how a company shares information to promote its product or services to potential consumers.

### Course Objectives

The objectives of the course are to bring the world of business into the classroom provide skills and strategies for different business scenarios help students to communicate confidently in everyday situations focus on key expressions and then put the new language into practice enable independent learning at a pace to suit each student

### Course Description

This course in business English gives students the communication skills they need for immediate use at work. It helps those who need to communicate better in English at work, by teaching a range of business communication skills. It features video clips for every unit, including documentary clips, authentic interviews and dramatized scenarios showcasing business communication skills. The Interactive Workbook on the DVD-ROM will also be available online for teachers who want to be able to communicate and collaborate with students outside of class. It combines a communicative approach with authentic business material and digital multi-media, to give in-work and pre-work students relevant and immediate communication skills. A fairly detailed treatment of the theory and practice of technical communication geared to the Nepali experience is an important component of this course.

### Course Contents

The contents of the course include:

• Working with words
• Speaking
• Language at work
• Case study
• Communication and technical communication
• Audience analysis
• Technical communication competencies and process
• Organization, design and graphics
• Technical writing style

### Teaching Method

Video clips can be used as focal points of discussion, to develop students’ listening skills, introduce new vocabulary and teach the business communication skills that students need in context. Language and skills practice can be given through activities in the Student’s Book and the Workbook (available on DVD-ROM ). It is suggested that student-centered activities should be encouraged with the teacher acting as a facilitator.

### Basic Texts

Hughes, John, and Jon Naunton. Business Result: Intermediate Student’s Book. Oxford: OUP, 2007. (containing interactive workbook with video)

References

Oxford Advanced Learner’s Dictionary of Current English. Eighth Edition. Oxford: OUP, 2010.

Hughes, John. Business Result: Intermediate Teacher’s Book. Oxford: OUP, 2008.

Leech, G.N., and Jan Svartvik.  A Communicative Grammar of English. Third Edition. London: Longman, 2002.

## We are Breaking the Silence About Death Four Levels | Daniel Goleman (1964)

Literal Comprehension:
Elisabeth Kublor – Rose work with the dying people in the mid 60 ‘s. Before that time the topic to death was banded. Now death has become a fashionable subject. Through her best selling book ” on death and dying” she has alert a new way of handling dying. She has suggested that the people should die in their own homes rather than in a strange hospital. After working with the dying people for a long time, she has pointed out five psychological stages people usually experience when they know that they are going to die soon. These stages are denial, anger or rage, bargaining, depression and acceptance. These reaction are not limited to dying but can take place with any change or lost.

Interpretation:
The dying person denies or says “No” when he first knows that he is going to die. The denial makes it easy for him to bear the force of death. At the unconscious level, a person never believes that he will die. From their refusal he begins to hope. Kublor Rose suggest that we should take about death with the patient and arrange to complete all possible things.

Critical Thinking:
This passage has clearly expressed how the topic death has become a fashionable subject. But The Behavior of dying person is at the unconscious level. This stages or levels are denial, anger or rage, bargaining, depression and acceptance.

Assimilation:
When a patient stop denying, he begins to be angry. He is angry seeing other healthy people. When his anger becomes less, he starts to bargaining with god. He wants to become good if he is given some more time to live. After he has accepted his death partially, he becomes depressed. He feels sorry for the past mistakes or incomplete tasks. He want to passed time in isolation. Finally he accept death peacefully and he is not worried about making his life longer. He settles everything. His own diseases also does not worry him. He enjoy the present moment without thinking of the future. He lives the full life.

# Difference between Periodic and Perpetual Inventory System

A periodic inventory system is an inventory system that records inventory levels at specific points in time. These points in time are usually at the end of accounting periods. Periodic systems use physical count audits, where employees actually count each and every item in the store to get an accurate inventory level. This amount is then compared to sales reports and purchase receipts to verify the amount of goods sold and to see if there are any discrepancies in numbers.

On the other hand, a perpetual system is an inventory system that records inventory into the accounting system on a continuous basis. This type of system relies heavily on automation to instantly track purchases and sales, and update the accounting system immediately. When an item is purchased, it is automatically recorded in the accounting system as an inventory item.

 Periodic Inventory System Perpetual Inventory System In periodic inventory inventory is valued at the end of the period that may be end of the month ,end of the half year ,end of the year,etc. In perpetual inventory system inventory is valued after each nad every transaction. In this system inventory account and cost of goods sold are non-existent until the physical count at the end of the year. In this system account and balance of thecosts of goods sold and inventory account exist all the time. In this system purchases account is used to record purchases. In this system no individual purchases account but the purchases are recorded in the inventory account. In this system purchases return account is used to record purchase returns. In this system no individual purchases account but  recorded in the inventory account. In this system Cost of goods sold or cost of sale is computed from Ending Inventory. In this system Cost of goods sold or cost of sale is reduced when there is a sale. In this system for goods returned by customers there is no inventories entries. In this system for goods returned by customers are recorded by reducing the Cost of goods sold  and adding back to inventories. Closing Entries are only required in periodic inventory system to update inventory and cost of goods sold. Perpetual inventory system does not require closing entries for inventory account.

# Difference between Capital And Revenue Expenditure

Capital expenditure includes costs incurred on the acquisition of a fixed asset and any subsequent expenditure that increases the earning capacity of an existing fixed asset.The cost of acquisition not only includes the cost of purchases but also any additional costs incurred in bringing the fixed asset into its present location and condition (e.g. delivery costs).Capital expenditure, as opposed to revenue expenditure, is generally of a one-off kind and its benefit is derived over several accounting periods. Capital Expenditure may include Purchase costs (less any discount received),Delivery costs,Legal charges,Installation costs,Up gradation costs,Replacement costs,etc.

Revenue expenditure incurred on fixed assets include costs that are aimed at ‘maintaining’ rather than enhancing the earning capacity of the assets. These are costs that are incurred on a regular basis and the benefit from these costs is obtained over a relatively short period of time. For example, a company buys a machine for the production of biscuits. Whereas the initial purchase and installation costs would be classified as capital expenditure, any subsequent repair and maintenance charges incurred in the future will be classified as revenue expenditure. This is so because repair and maintenance costs do not increase the earning capacity of the machine but only maintains it (i.e. machine will produce the same quantity of biscuits as it did when it was first put to use).Revenue costs therefore comprise of Repair costs,Maintenance charges,etc.

 Basis Capital Expenditure Revenue Expenditure Occurance Capital Expenditure is incurred to acquire or to improve permanent asset. Revenue Expenditure is incurred in normal courses of Business. Effect It increases the value of assets and earning capacity. It is incurred for maintaining earning capacity of the business and up keeps 0f the fixed assets. Benefits It provides benifits over several years. It is consumed within the accounting year. Nature It is non-recurring in nature. It is recurring in nature. Presentation It is shown in the balance sheet of asset side. It is charged in revenue account ie; income statement.

# Difference between Accounts Payable and Notes Payable

An accounts payable is a liability that is short term, usually between two weeks and one month, while notes payable is a liability that has a longer term, the shortest of which is six months.Accounts payable is based on good faith and requires no written agreement other than a sales invoice while notes payable requires a written contract which must be signed by the debtor and which states the terms of the account.Accounts payable is not charged with interest or other fees while notes payable have a specific interest rate and service charges.Notes payable are usually offered by banks and other financial institutions while accounts payable are offered by suppliers of goods and services.

 Basis Accounts  Pyable Notes Payable Definition Accounts Payable is the obligation that a business owes to its creditors for buying goods and services. Note payable is a written promissory note under which  a borrower obtains a specific amount of money from a lender and promises to pay it back with interest over a predetermined time period. Mode of agreement Accounts Payable is an informal and verbal agreement. Notes Payable is an formal and written agreement. Origin It originates from the purchase of tradable items or inventories. It originates from the purchase of tradable items or inventories and it may also evolve in case of purchase of long-lived assets or borrowing or to satisfy the existing obligation. Terms There is no specific terms such as maturity period ,interest rate included with accounts payable. There is specific terms such as maturity period ,interest rate included with notes payable. Interest There is no interest associated with the accounts payable. Interest is explicitly or implicitly involved with notes payable. Time It is a short term liability. It may be short-term or long term liability. Risk of custom er It is created in case of low risk customer. It is created in case of high risk customer. Possibility Accounts payable can be converted into notes payable. Notes payable can be never converted into accounts payable.

# Process Of Memory | General Psychology

Memory is essentially the capacity for storing and retrieving information. Three processes are involved in memory: encoding, storage, and retrieval. All three of these processes determine whether something is remembered or forgotten.

## 1) Encoding

Processing information into memory is called encoding. People automatically encode some types of information without being aware of it. For example, most people probably can recall where they ate lunch yesterday, even though they didn’t try to remember this information. However, other types of information become encoded only if people pay attention to it. College students will probably not remember all the material in their textbooks unless they pay close attention while they’re reading.

There are several different ways of encoding verbal information:

• Structural encoding focuses on what words look like. For instance, one might note whether words are long or short, in uppercase or lowercase, or handwritten or typed.
• Phonemic encoding focuses on how words sound.
• Semantic encoding focuses on the meaning of words. Semantic encoding requires a deeper level of processing than structural or phonemic encoding and usually results in better memory.

## 2) Storage

After information enters the brain, it has to be stored or maintained. To describe the process of storage, many psychologists use the three-stage model proposed by Richard Atkinson and Richard Shiffrin. According to this model, information is stored sequentially in three memory systems: sensory memory, short-term memory, and long-term memory.

##### Sensory Memory

Sensory memory stores incoming sensory information in detail but only for an instant. The capacity of sensory memory is very large, but the information in it is unprocessed. If a flashlight moves quickly in a circle inside a dark room, people will see a circle of light rather than the individual points through which the flashlight moved. This happens because sensory memory holds the successive images of the moving flashlight long enough for the brain to see a circle. Visual sensory memory is called iconic memory; auditory sensory memory is called echoic memory.

##### Short-Term Memory

Some of the information in sensory memory transfers to short-term memory, which can hold information for approximately twenty seconds. Rehearsing can help keep information in short-term memory longer. When people repeat a new phone number over and over to themselves, they are rehearsing it and keeping it in short-term memory.

Short-term memory has a limited capacity: it can store about seven pieces of information, plus or minus two pieces. These pieces of information can be small, such as individual numbers or letters, or larger, such as familiar strings of numbers, words, or sentences. A method called chunking can help to increase the capacity of short-term memory. Chunking combines small bits of information into bigger, familiar pieces.

Example: A person confronted with this sequence of twelve letters would probably have difficulty remembering it ten seconds later, because short-term memory cannot handle twelve pieces of information: HO TB UT TE RE DP OP CO RN IN AB OW L However, these letters can be easily remembered if they’re grouped into six familiar words, because short-term memory can hold six pieces of information: HOT BUTTERED POPCORN IN A BOWL

##### Working Memory

Psychologists today consider short-term memory to be a working memory. Rather than being just a temporary information storage system, working memory is an active system. Information can be kept in working memory while people process or examine it. Working memory allows people to temporarily store and manipulate visual images, store information while trying to make decisions, and remember a phone number long enough to write it down.

##### Long-Term Memory

Information can be transferred from short-term memory to long-term memory and from long-term memory back to short-term memory.Long-term memory has an almost infinite capacity, and information in long-term memory usually stays there for the duration of a person’s life. However, this doesn’t mean that people will always be able to remember what’s in their long-term memory—they may not be able to retrieve information that’s there.

##### Organization of Memories

Imagine what would happen if a psychology textbook weren’t organized by section, by chapter, or in any other way. Imagine if the textbook didn’t have a table of contents or an index. If the textbook just contained lots of information in a random order, students would have difficulty finding a particular concept, such as “encoding of memory.” They’d know the information was in there somewhere, but they’d have trouble retrieving it.

Long-term memory stores much more information than a textbook, and people would never be able to retrieve the information from it if it weren’t organized in some way.

Psychologists believe one way the brain organizes information in long-term memory is by category. For example, papaya may be organized within the semantic category fruit. Categories can also be based on how words sound or look. If someone is struggling to remember the word papaya, she may remember first that it’s a three-syllable word, that it begins with the letter p, or that it ends with the letter a.

Long-term memory organizes information not only by categories but also by the information’s familiarity, relevance, or connection to other information.

## 3) Retrieval

Retrieval is the process of getting information out of memory.Retrieval cues are stimuli that help the process of retrieval. Retrieval cues include associations, context, and mood.

##### Associations

Because the brain stores information as networks of associated concepts, recalling a particular word becomes easier if another, related word is recalled first. This process is called priming.

Example: If Tim shows his roommate a picture of sunbathers on a nude beach and then asks him to spell the word bear, the roommate may be more likely to spell bare because the picture primed him to recall that form of the word.

##### Context

People can often remember an event by placing themselves in the same context they were in when the event happened.

Example: If a woman loses her car keys, she may be able to recall where she put them if she re-creates in her mind exactly what she did when she last came in from parking her car.

##### Mood

If people are in the same mood they were in during an event, they may have an easier time recalling the event.