Finance Knowledge

Saturday, April 16, 2016

Organizations need to be more customer-oriented in order to increase their value and the focus of its strategy should be its target customers.

The crux of the strategy must be based on the reasons that why the customer will prefer the products/services over the competitors’ products/services. The reasons must be the benefits the customer will receive in return of the price paid. And the clearly designed statement (promise) which expresses these benefits is known as customer value proposition.

It persuades the customer to buy the product/service and differentiates it from the competitors.

It broadly classified in three categories:

1.    Customer intimacy.

2.    Operational excellence.

3.   Product leadership.

1.    Customer intimacy.

When organization adopts such strategy, it is saying to its target customers that the reason they should choose the organization is because it understands and responds to their individual needs better than its competitors.

2.    Operational excellence.

When organization adopts such strategy, it is saying to its target customers that the reason they should choose the organization is because it delivers products/services faster, more conveniently and at a lower price than its competitors.

3.    Product leadership

When organization adopts such strategy, it is saying to its target customers that the reason they should choose the organization is because it offers higher quality products/services than its competitors.

An organization can choose any one or combination of the above strategies for better profits and market share.

Sources:

https://en.wikipedia.org/wiki/Customer_value_proposition

Management accounting by Garrison Noreen Brewer.

Tuesday, March 29, 2016

CLOSELY HELD SHARES:

The shares held by the insiders, employees,and major shareholders. These shareholders don't want to sale there shares in order to retain their shareholding or ownership in the company. Most these situations are visible in family owned business, who wants to retain their family dominance in the company and reduces the stock by closely holding the shares.

Difference Between Outstanding Shares and Floating Shares

Difference Between Outstanding Shares and Floating Shares:

The shares that are issued by a company to its shareholders is termed as outstanding shares. But it does not include treasury stocks/shares.

Whereas floating shares/float represents only those shares which are available for trading.
Floating shares can be calculated by deducting closely-held shares and restricted shares.

Tuesday, May 27, 2014

CORPORATE TAX IN DIFERRENT COUNTIRES

Sunday, September 23, 2012

~SFinanceK~ SAP---Statistical Key Figure (SKF)-SAP

Statistical Key Figure (SKF)

The 'Statistical Key Figure (SKF)' is used as the basis (tracing factor) for making allocations (assessments/distributions). They are the statistical data such as number of employees, area in square meters, etc. You will make use of a SKF when you are faced with a situation where it is not possible to use any other conventional method or measure to arrive at the share of costs to be allocated to cost centers.

Suppose that you are incurring a monthly expense of USD 5,000 in the cost center cafeteria, the cost of which needs to be allocated to other cost centers. You can achieve this by the SKF. Imagine that you want this to be allocated based on the 'number of employees' working in each of the other cost centers such as administrative office (50 employees) and the factory (200 employees). You will now use the number of employees as the SKF for allocating the costs.

In SKF allocation, you have the flexibility of using two different SKF Categories; namely, Total value or Fixed value. You will use fixed values in situations where the SKF does not change very often, as in the case of the number of employees, area, etc. You will use total values in situations where the value is expected to change every now and then, as in the case of power use or water consumption and the like.

:) !Thanks! (:

Best Wishes & Warmest Regards,
Muhammad Noman Ansari

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Saturday, August 18, 2012

~SFinanceK~ EID MUBARAK

WISHING YOU AND YOUR FAMILY A VERY HAPPY EID MUBARAK

Best Wishes & Warmest Regards,
Muhammad Noman Ansari-ACMA

On Fri, Aug 17, 2012 at 11:22 AM, Abdul Wasey Khan (Hon. Secretary - ICMAP) <secretary@icmap.com.pk> wrote:

Dear Member;

Stay Blessed;

A Wasey Khan

Hon. Secretary ICMAP

Tuesday, June 12, 2012

~SFinanceK~ Fwd: Price/sales ratio

Price/sales ratio
From Wikipedia, the free encyclopedia
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Price-to-sales ratio, P/S ratio, or PSR, is a valuation metric for stocks. It is calculated by dividing the company's market cap by the company's revenue in the most recent year; or, equivalently, divide the per-share stock price by the per-share revenue. Also, justified p/s is calculated as (Profit Margin x Payout x (1+g)/(r-g).

Unless otherwise stated, P/S is "trailing twelve months" (TTM), the reported sales for the four previous quarters, although of course longer time periods can be examined.

The smaller this ratio (i.e. less than 1.0) is usually thought to be a better investment since the investor is paying less for each unit of sales. However, sales do not reveal the whole picture, as the company may be unprofitable with a low P/S ratio. Because of the limitations, this ratio is usually used only for unprofitable companies, since they don't have a price/earnings ratio (P/E ratio).^[1] The metric can be used to determine the value of a stock relative to its past performance. It may also be used to determine relative valuation of a sector or the market as a whole.

PSRs vary greatly from sector to sector, so they are most useful in comparing similar stocks within a sector or sub-sector.

Investors should exercise caution when utilizing price-to-sales ratios since the numerator, the price of equity, takes a firm's leverage into account, whereas the denominator, sales, does not. Comparing P/S ratios carries the implicit assumption that all firms in the comparison have an identical capital structure. This is always a problematic assumption, but even more so when the assumption is made between industries, since industries often have vastly different typical capital structures (for example, a utility vs. a technology company). This is the reason why P/S ratios across industries vary widely.