PGT Commerce Level-3 (HTEТ), Exam 2019

The Z-score formula for predicting bankruptcy was published in 1968 by Edward I. Altman, who was, at the time, an Assistant Professor of Finance at New York University.
The formula may be used to predict the probability that a firm will go into bankruptcy within two years. Z-scores are used to predict corporate defaults and an easy-to-calculate control measure for the financial distress status of companies in academic studies.
The Z-score uses multiple corporate income and balance sheet values to measure the financial health of a company.

Aссording to Gordon's model, dividend policy is irrelevant where r = k, when all other assumptions are held valid, but when the simplifying assumptions are modified to conform more closely to reality. Gordon concludes that dividend policy does affect the value of a share even when r = k.
This view is based on the assumption that under conditions of uncertainty, investors tend to discount distant dividends (capital gains) at a higher rate than they discount near dividends. Investors, behaving rationally, are riskaverse and, therefore, have a preference for near dividends to future dividends.
The logic underlying the dividend effect on the share value can be described as "The Bird-in-the-Hand Argument."

Limitations of Ratio Analysis: Ratio analysis is one of the important techniques to determine the financial strength and weakness of a firm. Though ratio analysis is a relevant and useful technique for the business concern, the analysis is based on the information available in the financial statements.
In some situations, ratios are misued, it may lead the management in a wrong direction. The ratio analysis suffers from the following limitations:
(i) Ratio analysis is used on the basis of financial statements. Number of limitations in financial statements may affect the accuracy or quality of ratio analysis.
(ii) Ratio analysis heavily depends on quantitative facts and figures, and it ignores qualitative data. Therefore, this may limit accuracy.
(iii) Ratio analysis is a poor measure of a firm's performance because of the lack of adequate standards laid for ideal ratios.
(iv) It is not a substitute for analysis of financial statements. It is merely used as a tool for measuring the performance of business activities.
(v) Ratio analysis is clearly some latitude for window dressing.
(vi) It makes comparison of ratios between companies and it is questionable, because of the differences in methods of accounting operation and financing.
(vii) Ratio analysis does not consider the change in price level, as such, these ratios will not help in drawing meaningful inferences.

The Institute of chartered Accountants of India has issued the following accounting standards.
AS.1. Disclosure of Accounting policies.
AS.2. Valuation of Inventories.
AS.3. Cash Flow Statement.
AS.4. Contingencies and Events occurring after the Balance Sheet Date.
AS.5. Net profit or loss for the period, prior items and changes in accounting policies.
AS.6. Depreciation Accounting.
AS.7. Accounting for Construction Contracts.
AS.8. Accounting for research and development.
AS.9. Revenue Recognition.
AS.10. Accounting for fixed Assets.
AS.11. Accounting for the effects of changes in foreign Exchange rates.
AS.12. Accounting for Government grants.
AS.13. Accounting for Investments.
AS.14. Accounting for Amalgamations.
AS.15. Accounting for Retirement benefits in the financial statements of employers.
AS.16. Borrowing Costs.
AS.17. Segment Reporting.
AS.18. Related Party Disclosures.
AS.19. Leases.
AS.20. Earnings Per share.
AS.21. Consolidated financial statements.
AS.22. Accounting for Taxes on Income.
AS.23. Accounting for Investments in Associates in Consolidated Financial Statements.
AS.24. Discontinuing operations.
AS.25. Interim Financial Reporting.
AS.26. Intangible Assets.
AS.27. Financial Reporting of Interests in Joint Ventures.
AS.28. Impairment of Assets.
AS.29. Contingent Liabilities and Contingent Assets.
Note: AS-3, AS-6 and AS-24 are desirable but the rest are mandatory.

In some cases earning per share increases by increasing the ratio of share capital, while in other cases it increases by increasing the long-term loan component. The second situation arises when the cost of borrowed capital is lower than the earnings rate of the company. Substitution of owned capital by borrowed capital will be in the interest of shareholders. This is called 'Trading on Equity'.

Under the new Companies Act, 2013 this doctrine of ultra vires gives a ground to the members and depositor(s) of the company to file an application before the Tribunal on behalf of the members or depositor(s) for restraining the company from committing an act which is ultra vires the Articles or Memorandum of the Company vide. Sec. 245(1)(a) of the Companies Act, 2013.

The path-goal theory is a leadership theory developed by Robert House, an Ohio State University graduate, in 1971 and revised in 1996. The theory states that a leader's behaviour is contingent to the satisfaction, motivation and performance of his or her subordinates.
The revised version also argues that the leader engages in behaviours that complement subordinate's abilities and compensate for deficiencies.
According to Robert House and John Antonakis, the task-oriented elements of the path-goal model can be classified as a form of instrumental leadership.

Darshini Hundi is also known as Bill at sight or demand. This Hundi again is classified as Shahjog, Naurjog, Dekharnar jog, Fermani jog, Jokhami, and Dhanjog.
This bill is used for the payment of goods originating from one country to another places. The bill payment place may be different from its place of origin.