ppt on investment game

8/9/2019 PPT on Investment Game

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Presented to Presented byPresented to Presented by

Ms. Monika Ram bali yadavMs. Monika Ram bali yadav109317109317


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THETHEINVESTMENTINVESTMENT

GAMEGAME How to winHow to win

written by:written by:--Prasanna ChandraPrasanna Chandra


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Security MarketSecurity Market

Financial AnalysisFinancial Analysis


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Securities MarketSecurities Market

The Exchange SystemThe Exchange System

Methods of raising capitalMethods of raising capital

Stock market in IndiaStock market in India

Buying and selling sharesBuying and selling shares


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Methods of raising capitalMethods of raising capital

Public issuePublic issue

Rights issueRights issue

Private placementPrivate placement


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Buying SharesBuying Shares

Location a brokerLocation a broker

Placement of orderPlacement of order

Execution of orderExecution of order

Delivery of certificatesDelivery of certificates


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Selling SharesSelling Shares

Placement of orderPlacement of order

Execution of orderExecution of order

Receipt and paymentReceipt and payment


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FINANCIAL STATEMENTFINANCIAL STATEMENT

ANALYSISANALYSIS

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Basic concept underlying financialBasic concept underlying financialaccountingaccounting

Profit and loss statementProfit and loss statement

Balance sheetBalance sheet

Financial ratio analysisFinancial ratio analysis


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Basic concepts underlyingBasic concepts underlying

financial accountingfinancial accounting Entity conceptEntity concept

Money measurement conceptMoney measurement concept

Going concern conceptGoing concern concept

Cost conceptCost concept

Conservation conceptConservation concept

Dual aspect conceptDual aspect concept

Accounting period conceptAccounting period concept

Realization conceptRealization concept

Matching conceptMatching concept10107/7/20107/7/2010


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Profit and Loss StatementProfit and Loss StatementNet saleNet sale

Cost of goods soldCost of goods sold

stocksstocks

wages and salarieswages and salaries

other manufacturing expensesother manufacturing expenses

Gross profitGross profit

Operating expensesOperating expensesDepreciationDepreciation

General administrationGeneral administration

SellingSelling

Operation profitOperation profit

Earning before interest and taxEarning before interest and tax

InterestInterestProfit before taxProfit before tax

Profit after taxProfit after tax

DividendsDividends

Retained earningsRetained earnings

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Balance sheetBalance sheet

Sources of fundSources of fundShare holder fundsShare holder funds

(a) Share capital(a) Share capital

(b) Reserve & surplus(b) Reserve & surplus

Loan fundsLoan funds

(a) Secured loan(a) Secured loan(b) Unsecured loan(b) Unsecured loan

Application of fundsApplication of fundsFixed assetsFixed assets

InvestmentInvestment

Current assets, loans and advancesCurrent assets, loans and advances

Less:Less:--current liabilitiescurrent liabilities

Net current assetsNet current assets

Miscellaneous expendituresMiscellaneous expenditures12127/7/20107/7/2010


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Financial Ratio AnalysisFinancial Ratio Analysis

Liquidity ratioLiquidity ratio

Leverage ratioLeverage ratio

Turnover ratioTurnover ratio Profitability ratioProfitability ratio

Capital market ratioCapital market ratio

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1. Liquidity Ratios1. Liquidity Ratios

current ratio= current assetscurrent ratio= current assetscurrent liabilitiescurrent liabilities

quick ratio= current assetsquick ratio= current assets stockstock--prepaidprepaid

current liabilitiescurrent liabilities

Liquidity ratio measure the ability of the firm to meet itsLiquidity ratio measure the ability of the firm to meet its

current obligation(current obligation(LiaLia.) a very high & low degree is also bad.) a very high & low degree is also bad

Ideal current ratioIdeal current ratio 2:12:1 , satisfied ratio, satisfied ratio 1.5:11.5:1 and generaland generalnorm ratio isnorm ratio is 1.33:11.33:1 current ratio is the most popular tocurrent ratio is the most popular to

measure liquidity.measure liquidity.

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2. Leverage Ratios2. Leverage Ratios

debt equity ratio = total debtdebt equity ratio = total debtnet worthnet worth

long term debt ratio = long term debtlong term debt ratio = long term debt

equityequity

The shortThe short--term creditorsterm creditors, like bankers & suppliers of row material,, like bankers & suppliers of row material,

are more concerned with the firms current debt paying ability.are more concerned with the firms current debt paying ability.

LongLong term creditorsterm creditors, liken debenture holder, financial institutions, liken debenture holder, financial institutions

est. more concerned with the firms longsest. more concerned with the firms longs--term financial condition.term financial condition.

If theIf the cost of debtcost of debtis higher then the overall rate of return, theis higher then the overall rate of return, the

earning of share holder willearning of share holder will reducereduce & co. may& co. may insolvencyinsolvency..15157/7/20107/7/2010


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3. Turnover/Activity Ratio3. Turnover/Activity Ratio

inventory turnover ratio = net saleinventory turnover ratio = net saleavg inventoryavg inventory

debtors turnover ratio = credit salesdebtors turnover ratio = credit sales

avg debtorsavg debtors

fixed turnover ratio = net salesfixed turnover ratio = net sales

fixed assetsfixed assets

Inventory turnover ratioInventory turnover ratio reflect the efficiencyreflect the efficiency of inventoryof inventory

mgmt,mgmt, debtor turnover ratiodebtor turnover ratio the efficiency of receivable mgmt,the efficiency of receivable mgmt,

fixed assets turnover ratiofixed assets turnover ratio the fixed assets utilization.the fixed assets utilization.

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5. Capital market Ratio or Return on5. Capital market Ratio or Return on

Investment ratioInvestment ratio

earning per share (EPS) ratio = PATearning per share (EPS) ratio = PAT -- preference dividendpreference dividend

out standing sharesout standing shares

price earning (PE) ratio = MPprice earning (PE) ratio = MP

EPSEPS

EPSEPS of the co. should be compare with theof the co. should be compare with the industryindustry avg andavg and

eps of other firms and also showeps of other firms and also show profitabilityprofitability as per share; it doesas per share; it does

not reflect how much paidnot reflect how much paid dividenddividend & how much it& how much itretainretain..

PE ratio reflects investors expectations about thePE ratio reflects investors expectations about the growthgrowth in thein the

firms earning. Industries differ in there growth prospects.firms earning. Industries differ in there growth prospects.18187/7/20107/7/2010


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THANK YOUTHANK YOU

ppt on investment game

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