What is the meaning of computerized accounting?
As the name says ‘computerised accounting’ is the use of computers, software, and hardware to process financial transactions and events and produce accounting reports: A computerized accounting system (CAS) automates financial records and reporting processes of financial transactions and events and produce reports based on user requirements. The process of financial transactions done through…
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Supreme Court overrules capping of Credit card charges
The Supreme Court today overruled a 2008 decision by the National Consumer Disputes Redressal Commission (NCDRC) that capped the interest rate banks could charge on late credit card bill payments at 30% per annum, bringing relief to banks. The National Consumer Court had in 2008 restrained banks from charging interest rates over 30% per annum…
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Preparation and Presentation of Financial Statements of Banks
The Bank’s financial statements are prepared under the historical cost convention, on the accrual basis of accounting on a going concern basis, unless otherwise stated, and conform in all material aspects to Generally Accepted Accounting Principles (GAAP) in India, which comprise applicable statutory provisions, regulatory norms/guidelines prescribed by the Reserve Bank of India (RBI), Banking…
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What is the meaning of Ratio Analysis of a financial statement?
The term ratio means a simple division of one number by another. It is measured by the number of times one number is contained by the other, either integrally or in fraction. The ratio analysis of financial statement means the process of calculating structural relations of different items and groups in the financial statements. Generally,…
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Why Ratio Analysis of financial statements is important to bankers?
If any lending decision is to be properly made, the risk involved in the transaction should be properly evaluated. Risk evaluation primarily consists in the ascertainment of the ability of the prospective borrower to repay the proposed loan. To ascertain this ability, apart from financial analysis many other vital considerations such as the character of…
Ratio analysis of Capital Structure/leverage ratios of a firm
(This article explains the method of computation and the purposes of capital structure ratios viz. Current ratio, Quick ratio/Acid test ratio, Debt Equity Ratio, Solvency Ratio, Proprietary or Equity asset ratio, Fixed assets to tangible net worth plus term debt, Current debt to tangible net worth ratio, Inventory to net working capital ratio, Current debt…
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