Solvency certificate why is it required?

Solvency is defined as the ability of an individual or entity to meet long-term financial commitments. A solvency certificate is a most important document that provides information about the financial stability of an individual or partnership firm or company. A solvency certificate is required for applying for tenders, obtaining contracts, Visa interviews, Legal/court matters like…

What are the papers examined by banks for credit appraisal?

Commercial Banks extend varieties of credit facilities to different types of customer viz. Individual, Sole Proprietor, Partnership firm, HUF, Trust, Club, Societies, Association, Limited Company, Public Sector Undertaking, Consortium advance etc. Depending upon type of borrower and nature of credit facilities required, bank will call for certain non-financial papers to examine along with financial papers.…

What are the Capital instruments permitted for receiving foreign investment in India?

 ‘Capital Instruments’ means monetary instruments in capital markets such as equity shares, debentures, preference shares and share warrants issued by a company. Indian companies are permitted to raise money by way of capital instruments for their operational purposes. The instruments issued in capital markets are listed below: Equity shares: Equity shares are the shares joint-stock…

Cash Budget pattern of financing

[Cash Budget pattern of financing seasonal productions like sugar, tea, and construction activities] The request for financial assistance from business enterprises dealing in seasonal products like sugar, tea, construction activities, film industries, order-based activities, etc. is facilitated by the banks through Cash Budget financing plans. In such a pattern of business dealings, the requirement of…

Different Users and Use of Ratios explained

Introduction Ratios are essential tools for assessing the earning capacity, financial soundness, and operational efficiency of a business organization. Accounting ratios, a group of metrics derived from financial statements, are widely used to measure management’s aptitude, efficiency, and profitability. By expressing relationships between various accounting data points, these ratios form the basis of ratio analysis.…