Final Accounts

AFTERSCHO☺OL
– DEVELOPING CHANGE MAKERS
CENTRE FOR SOCIAL ENTREPRENEURSHIP
PGPSE PROGRAMME –
World’ Most Comprehensive programme in social
entrepreneurship & spiritual entrepreneurship
OPEN FOR ALL FREE FOR ALL

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02/03/09 AFTERSCHO☺OL's
AFTERSCHO☺OL's MATERIAL
MATERIAL 1
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 Final Accounts
Dr. T.K. Jain.
AFTERSCHO☺OL
Centre for social entrepreneurship
Bikaner M: 9414430763
tkjainbkn@yahoo.co.in
www.afterschool.tk, www.afterschoool.tk
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02/03/09 AFTERSCHO☺OL's
AFTERSCHO☺OL's MATERIAL
MATERIAL 2
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 What is commonsize statement?
• When you treat the total assets as 100 and find
each asset / liability as % , it is called common
size balance sheet.
• Similarly, when you treat net sale as 100 and
find each income or expenses as %, it is called
common size profit and loss statement.
• Common size statements allow you to udertake
analysis of the statements and compare them.

02/03/09 AFTERSCHO☺OL's MATERIAL 3

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 COMMONSIZE STATEMENT
• SEE THE MICROSOFT BALANCE SHEET FO

02/03/09 AFTERSCHO☺OL's MATERIAL 4

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 Commonsize statement
• Analyse for wipro tcs and infosys

02/03/09 AFTERSCHO☺OL's MATERIAL 5

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 Trend analysis
• Here we take the base year figures as 100
and try to find out the values for the next
year and try to interpret the change /
trend.

02/03/09 AFTERSCHO☺OL's MATERIAL 6

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 DU PONT ANALYSIS
• ROI
• WHICH IS OUTCOME OF :
• Net profit ratio * capital turnover
• Net profit ratio = net profit / sales
• Capital turnover ratio = sales / capital

02/03/09 AFTERSCHO☺OL's MATERIAL 7

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 The basic equation…
• Assets = Liabilities
• If there will be increase in assets, there
will also be an increase in liabilities.
• The net impact of each accouting
transaction should result in Assets =
liabilities

02/03/09 AFTERSCHO☺OL's MATERIAL 8

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 Example:
• If there is increase in capital, what must
happen?
• Suppose capital increases by Rs. 10000,
there is increase in liabilities by 10000.
thus with this there should also be
increase in assets. Thus we have to find
out another item (from assets side), which
should increase simultaneously.

02/03/09 AFTERSCHO☺OL's MATERIAL 9

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 How do you denote them?
• Assets are denoted as debits and liabilities
are denoted as credits (credit means
confidence, and someone will give you
money only if he has confidence on your
business).

02/03/09 AFTERSCHO☺OL's MATERIAL 10

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 Three rules…
• Real account (assets)
• Debit what comes in (because it is an asset).
• Credit what goes out (because asset is
reducing)
• Personal account (account of firms and
individuals)
• Debit the person to whom we have given
something
• Credit the person from whom we have taken
something (as hemay increase or liability or
reduce our asset)
02/03/09 AFTERSCHO☺OL's MATERIAL 11
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 Fundamentals…
• Nominal account (income and
expenditures)
• Debit all expenses
• Credit all income

02/03/09 AFTERSCHO☺OL's MATERIAL 12

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 Assets…
• Liquidity order (cash first and goodwill last)
• Permance order (goodwill first and cash last)
• Freehold land : (it is never depreciated)
• Leasehold land ( it is depreciated)
• Building
• Plant and machinery (includes installation charge,
second hand machine repair – before installation,
increasing capacity, )
• Tools, spares
• Furniture and fixtures
• Vehicle

02/03/09 AFTERSCHO☺OL's MATERIAL 13

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 Intangible assets…
• Computer software
• Copyright
• Trademark
• Knowhow
• Goodwill
• R&D

02/03/09 AFTERSCHO☺OL's MATERIAL 14

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 Fictitious assets…
• Preliminary expenses
• Expenses

02/03/09 AFTERSCHO☺OL's MATERIAL 15

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 Current assets…
• Cash
• Bank
• Bill receivable
• Debtors ( proper classification)
• Stock (FIFO & weighted average)
• Short term investmnetns (upto 1 years)
• Prepaid expenses
• Earned income
• Loans and advances (to staff,
• Deferred tax
02/03/09 AFTERSCHO☺OL's MATERIAL 16
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 Other assets…
• Capital work in progress
• Investments (more than 1 year)

02/03/09 AFTERSCHO☺OL's MATERIAL 17

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 LIABILITY ..
• SHARE CAPITAL (authorised,
issued,subscribed,, paidup)
• Reserve and surplus (capital reserve,
general, redemption reserve, revaluation
reserve) + capital subsidy
• Preference share (only redeemable are
allowed) convertible are allowed
• Security received
• Debentures
02/03/09 AFTERSCHO☺OL's MATERIAL 18
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 Reserves / provisions
• Provision is for specific purpose
• Reserve is general – can be used for other
purpose
• Provision is charged to P & L acccount
• Reseve is appropriation of profit

02/03/09 AFTERSCHO☺OL's MATERIAL 19

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 Loans…
• Secured

• Unsecured

02/03/09 AFTERSCHO☺OL's MATERIAL 20

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 Current liabilities …
• Creditos
• Bill payable
• Bank overdraft
• Outstanding expenses
• Deferred tax

02/03/09 AFTERSCHO☺OL's MATERIAL 21

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 Contingent assets / liabilities…
• As a note below balance sheet
• Only contingent liabilities are shown in
note.
• Contingent assets are not shown.
• Example: any pending law suit etc.

02/03/09 AFTERSCHO☺OL's MATERIAL 22

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 About AFTERSCHO☺OL
• PGPSE - World’s most comprehensive
programme on social entrepreneurship –
after class 12th
• Flexible – fast changing to meet the
requirements
• Admission open throughout the year
• Complete support from beginning to the
end – from idea generation to making the
project viable.
02/03/09 AFTERSCHO☺OL's MATERIAL 23
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Branches of AFTERSCHO☺OL
• PGPSE programme is open all over the
world as free online programme.
• Those who complete PSPSE have the
freedom to start branches of
AFTERSCHO☺OL
• A few branches have already started -
one such branch is at KOTA (Rajasthan).

02/03/09 AFTERSCHO☺OL's MATERIAL 24

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 Workshop on social
entrepreneurship
• We conduct workshop on social
entrepreneurship – all over India and out
of India also - in school, college, club,
association or any such place - just send
us a call and we will come to conduct the
workshop on social entrepreeurship.
• These workshops are great moments of
learning, sharing, and commitments.

02/03/09 AFTERSCHO☺OL's MATERIAL 25

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 FREE ONLINE PROGRAMME
• AFTERSCHO☺OL is absolutely free
programme available online – any person can
join it. The programme has four components :
• 1. case studies – writing and analysing – using
latest tools of management
• 2. articles / reports writing & presentation of
them in conferences / seminars
• 3. Study material / books / ebooks / audio / audio
visual material to support the study
• 4. business plan preparation and presentations
of those plans in conferences / seminars

02/03/09 AFTERSCHO☺OL's MATERIAL 26

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100% placement / entrepreneurship
• AFTERSCHO☺OL has the record of
100% placement / entrepreneurship till
date
• Be assured of a bright career – if you join
AFTERSCHO☺OL

02/03/09 AFTERSCHO☺OL's MATERIAL 27

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 Pursue professional courses along
with PGPSE
• AFTERSCHO☺OL permits you to pursue
distance education based professional /
vocational courses and gives you support
for that also. Many students are doing CA
/ CS/ ICWA / CMA / FRM / CFP / CFA and
other courses along with PGPSE.
• Come and join AFTERSCHO☺OL

02/03/09 AFTERSCHO☺OL's MATERIAL 28

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