Posts Tagged Finance

Management Accounting Review for SMU MBA

I have to share an accounting concept for management. This is the review for SMU MBA students by financial management MBA book. It is for those students who are busy in preparing their MBA by SMU. Below is review by management accounting blog:

“Management accounting is not only for the record keeping but also it has broader aspects. The managers use the financial statements as resources to make decision in the field of accounting. About the management accounting we can take a look from MBA book of SMU, “Management accounting is the process of identifying, measuring, accumulating, analyzing, preparing, interpreting and communicating information that helps managers to fulfill organizational objectives.”

Here with the definition of management accounting we can say it is for the fulfill of organization objectives by the managers to use all the financial statements and resources.

Objectives of Management Accounting:

Scope of management accounting

Need for financial statements analysis and inter-firm comparisons

Relevance of cost analysis – overhead analysis, job cost analysis and process cost analysis

Relevance of marginal cost and C.V.P. analysis for short-run decision-making

We should know that all the management process single and most upper goal is decision making. So, decision-making is known as the nucleus of management process. Here we will look a chart to understand of decision-making process:

decision-making process

Meaning and Scope of Management Accounting:

About the meaning of management accounting Charles T. Horgren writes, “Management accounting is the process of identifying, measuring, accumulating, analyzing, preparing, interpreting and communicating information that helps managers to fulfill organizations objectives.”

As I have already mentioned that management accounting is not only the process of keeping records. Records keeping is the process of data accumulation however management accounting is the decision making process. So, the management accounting scope has broader then financial statements and record keeping.

About the evaluation of management accounting the history says that it comes with the industrial revolution from the 18th century. Management accounting is the results of capitalist system.

Management accounting has been divided into four parts – book keeping, financial accounting, accounting and cost accounting and social responsibility accounting.

Like this management accounting has one more main part that is MIS (Management Information Systems). MIS for management accounting is most important process because it collects data and gives the right way to analysis that data to take good decisions by managers.

At last we can give some facts which are necessary in functions of management accounting:

Formulation of a business plan

Implementation of the plan

Designed to achieve the goals of the plan

Formulation of business plans

These are the main function of management accounting an organization. However, we have already discussed on the management accounting chapter. Now, I think I will cover some more facts in the next chapter of financial management accounting chapter.”

Source Via :Introduction to Management Accounting

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Personal loan or a credit card

Have you ever been turned down for a personal loan or a credit card? Beyond the fact that being denied a line of credit or personal loan is tremendously embarrassing lies a simple credit checking process that may or may not be skewed in your favour.

When banks turn down applications for credit, they simply send a note stating that you did not meet their requirements. But, what are their requirements? And, how close were you to meeting them? These questions can only be answered with a look at your credit ratings report.

When you apply for a loan, the financial institution you applied to receives a numerical score for your credit from one or all of the three major United Kingdom credit-reporting companies.

You are never shown results of their report. But, you can purchase your own copy of your credit report and examine it thoroughly for errors and room for improvement. To arrange a personal credit rating check, you will need to visit creditchoices.co.uk. Known for their helpful information and personal finance tools such as their free online savings calculator, Credit Choices will help you arrange to see your credit report from one or all three of the United Kingdom credit reporting agencies.

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The loan against home is simply the secured type of loan

Smart people always make smart choices. When it comes to loan, if one owned home and needs a large sum of money as loan, then nothing but loan against home would be the best option.

Money acts like the lifeblood in modern world, without it one can’t think of survival. It is really a tough job for the salaried people to make acute financial management; there are times which come to life when the need of taking loans knocks on the door. Availing the proper type of loan according to your requirement is not at all a tough job today. Now you will find several banks and other financial organisations in India which are offering several types of loans for meeting different kinds of financial requirements of people. Among those, one of the most lucrative types of loan is the loan against home.

The loan against home is simply the secured type of loan, for availing which one need to pledge his residential home as security to the lender. Here, it should be mentioned that in order to avail such loan by pledging his commercial property and the residential property, which will be pledged, the item of security should have market value. By availing loans under this category, one can get several advantages which are discussed here:

The primary advantage that a lender provides to the borrower is the low rate of interest. This loan is provided at much cheaper interest rate than the personal loan (which is usually issued at an interest rate of 16 to 21 %). The rate at which the loans against property are issued is 9.75 to 11.50 %. As the lending entity is having security, if the borrower is not able to pay back the loan amount, then the lender will have full authority to recover that sum by selling the secured property.

Other benefits that the borrowers get under the loan against property are highly flexible repayment option and long repayment tenure. The borrowers facilitate the borrowers to pay back the loan amount by equated monthly instalments (EMIs). The borrowers will also be benefited by getting longer repayment tenure to return the loan amount, which is longer than that for a personal loan. One can get up to 10 years of tenure to pay back the loan amount.

Like the personal loans, the loan against home can be taken for any purpose; the borrower doesn’t require disclosing the reason of availing loans to the lending institution.

There are several banks in India which spread their helping hands to give you the advantage of loan against property. The IDBI banks, ICICI bank, Bank of Baroda are the names of a few. To avail the advantage of such loans without wasting precious time, energy and by making a comprehensive comparison of interest rates among different lending institutions, the best way is the Internet media.

By going Online, you will find hundreds of online financial organisations which facilitate you to get the advantage of loan against home. To make the right choice of lender, the online financial organisations give you the advantage to make a comparison among different lenders for the most reasonable interest rate and flexible terms and conditions.

So, from the above discussion one thing is quite clear that if you are home-owner and possess the desire to avail a loan, then nothing but the loan against home would be your perfect choice. Such a loan facilitates you with a reasonable rate of interest and flexible repayment options. To get the maximum advantage of such loan, nothing but the online mode would be the best option for you.

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Home owner loans

1. What are home owner loans?

Home owner loans are specifically design for those people that own their own homes and want to borrow money against any equity that they may have built up in their homes over the years they have lived there. Equity is difference in the value of the home and what is actually owing on your mortgage. Always remember to seek professional advice when dealing with US or UK mortgages or loans.

2. Why is it important to own a home to acquire one of these loans?

It is important that the borrower own his/her own home so that the lender of the money can have the security of using the equity to place against the loan of the money that he is giving. Without a home there is no security for the loan, which places the lender at a higher risk of getting his money back.

3. Why have home owner loans become so popular in today’s market?

This is due to the tax deductions and low interest rates that are offered today’s housing loan market. It is also due to the fact of the amount of equity people have built up in their homes over the years, which can now be used by them in a safe manner. You can see how popular these types of loan and mortgages are by simply looking at the amount of mortgage brokers in london – there are over 300!

4. How does equity build up in a home?

If you purchase a home for $100,000 and you paid $20,000 as a down payment and have paid, a total amount of payments of $10,000 then you have a total amount of $30,000 in equity but there is also another factor that the lenders consider, suppose your home as increased in value on the market and not would sell for $120,000, this changes your equity to $50,000 and this is what you would use to secure a home owner loan.

5. What rates of interest are there for home owner loans?

The rates of interest for home owner loans vary between companies but with a home owner that has a lot of equity built up in his home you can be sure you will get your loan at a very good rate. As in anything you purchase it pays to shop around for the best possible deal.

6. Why would I get a home owner loan?

The reasons for getting a loan such as this are as diverse as there are people who seek the loan. Some people borrow the money to pay down the smaller bills they have accumulated over the years when they find it’s a struggle to make the payments, others invest the money In home improvements which also improves their equity while others use it for a vacation of a life time.

7. Can I afford another payment?

If you are taking out the loan to pay of the small bills you have acquired you will find it a lot easier paying one monthly payment than the four or five you were paying on small loans. However, there is a catch to this. If you are borrowing to pay off the bills, you have it would be a bad mistake to run those bills up again before paying off your home owner loan, you can find yourself in a bit of a bind as you have already used up your equity.

8. What would happen if I can’t pay this loan?

Anyone that gets a home owner loan has to be careful. If you can’t make the payments on this loan the bottom line is the lender can foreclose on your home. This only happens in very extreme cases. Today’s lender doesn’t really want your home and would rather work out payments you can make without stressing your budget.

9. How can a lender help if I default on payments?

A lender can help in stretching your payments out over a longer period of time, which would really reduce your payments into payments you can handle. Although it will take you longer to repay the loan and cost you more in interest it is a good way to help a borrower get out of a bind.

10. How long would it take to get a home owner loan?

This type of loan takes a little longer than a personal loan as the lender has to make sure the equity is in your home so therefore they have to check this out. There are mortgages to look over and the increase in the value of your home. This all takes time but maybe not as long as you would think in today’s world of technology.

Always consult a professional financial advisor, mortgage broker or independent advice agent when dealing with money matters. To find your Local Financial Advisor visit: FinancialAdvisorFinder.co.uk

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Taxpayers will pay £40 billion for mortgage bailout

As part of an emergency rescue plan ministers may be willing to underwrite billions of pounds worth of mortgages according to a recent report, and this could end up costing the taxpayer around £40 billion. The scheme would see the type of guarantee that was offered to Northern Rock extend to other home loans. The scheme is part of the plan that Gordon Brown has been drafting to try and tackle the economic downturn.

It is thought that the scheme could be brought in as early as next month. However, critics are stating that offering to back up the mortgage market with taxpayer’s money would prove high risk. There are a number of risks, which the Treasury is apparently aware of, and this includes encouraging banks to behave recklessly with taxpayers’ money to fall back on.

Sir James Crosby, formerly the Halifax boss, is looking at ways in which the government can help to boost the flagging mortgage and housing markets. An insider from the Treasury stated: ‘One major problem is a lack of mortgage finance, so if there is anything we can do to help with that we should think about it.’ He added: ‘If Sir James comes back with something credible that doesn’t expose the taxpayer to too much risk then we would be wrong not to consider it.’

The suggestion from Crosby involved the government guaranteeing loans from lenders on a temporary basis, and the guarantee would be provided by the Treasury and the taxpayer, which could help to boost lending and revive confidence amongst lenders.

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Loan money online

A a danish citizen i can be hard to find the right place to apply for a loan. It’s easy to find firms that will loan you money, but it’s hard to find those who will loan you money at fair rates. This article will give you 3 pointers on where to apply for your loan.

X-mas i not just the time of eating well and giving away presents. It’s also a time of spending money, lots of money. As X-mas get more commercial your family and friends depend on you giving them something nice. Something nice don’t come cheap and if you have the economy for it you should consider applying for a loan, and get them what they aren’t. In dk the cheapest option during X-mas is julelån – Julelån normally give you a more fair rate than the normal loan types.

I like to say we have one loan provider for each 10 citizens. There a so many firms that will loan you money – why? Because it’s a very lucrative business. That also why you have to be cautious when you pick a provider. The are loan providers that seem to have no morale what so ever. They max up the interest ate through hidden fees and service payments. This is why its important to know the correct place for getting loan, else you could end up loosing a lot of precious money. If you need more in for on a loan in DK please read: Hvor kan jeg låne penge. This article provide you with the info you need when applying for a loan.

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Financial Loan Became Cheaper

After the cut off repo rate by RBI banks have decided today to lowered their loan rate. Specially government banks have participate now to lowered their loan rate. In this series home, auto and person loans rate will be lowered and financial process will be easy.

A meeting held by P. Chidambaram due to financial problem of India to lowered the loans rate by banks. It has been done by banks for getting some growth in Indian financial positions. The market is very slow due to over production however the money is not in market to purchase that. In this situation the share market is going down every day.

Today, some growth is in Indian share market but we have to see how many days it will get the growth of market. Indian financial managements are thinking that if the loans rate will be lowered then the market growth will be better.

According to OP Bhatt who is the chairman of SBI said on that meeting, “Our ALCO should be meeting on Wednesday and a decision to cut prime lending rate (PLR or the rate at which blue chip companies are lent money) would be taken after that.”

In this meeting MD Mallya who is the chairman and managing director of Bank of Baroda also said, “We will take a call on deposit as well as lending rates based on our ALCO report.” however, Punjab National Bank and Union bank of India has already reduced their PLRs.

The thinking behind the loans rate lowering are very clear. But the market moves naturally. The crisis comes again after some days because it is the only one way to reduce crisis. They can’t remove their crisis effectively to solve financial problem in the system.

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