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  Image Credit: toppr.com Management by Objective- MBO (Individual Performance Appraisal “HR Perspective”) Appraisal by result, target coaching, work planning and review, performance objective setting, and mutual goal setting. There are various methods to evaluate the employee’s performance, and all these have its advantage and disadvantage.  One of them is MBO method which bring together superior and employee together to sit and set the objective and performance standard which required at organization. It also talk about continual discussion about periodic employee’s performance. Management by Objective (MBO) specifies the performance goal that an individual and Manager identify together. Each manager sets objectives derived from overall goals and objectives of the organizations. Categories scaling method, in this method employee’s performance are checked with their supervisor and based of supervisor feedback employee’s performance are categories into Categories (A, B, C) Sca...

                          Image credit: managementnote.com Employee’s performance is subject matter for forever. Companies adopt new system, policy & procedure to enhance employee’s performance. There are lots of new applications are getting developed to enhance employees/ group / peer performance, all these relate to employees in- role activity. There is job description in-role activity. Through in- role activity employer emphasis on employee’s productivity and quality and employee’s performance are measures periodically through their evaluations. There is one where less employer focus on employee’s OCB (Organizational Citizen Behaviors)  OCB (Organizational Citizen Behaviors) is an extra job role or employee’s behavior which add more value or help employee for outstanding performance at work. It can be understand by employee’s behavior at work place. If we compare in role performance and extra role per...

Business need cash to make payments for acquisition of resources and services for normal conduct of business.  Cash is one of the important and key parts of the current assets. Cash is the money which business concern can disburse immediately without any restriction. The term cash included coins, currency, cheques held by business and balance in its bank accounts. Cash management techniques Managing cash flow constitutes two important parts Speedy cash collection Slowing disbursement Speedy cash collections  Business must concentrate in the field of speedy cash collection from customers. For that, the concern prepares systematic plan and refined techniques. These techniques aim at, the customer who should be encourage to pay as quickly as possible and the payment from customer without delay. Speedy cash collection business concern applies some of the important techniques as follow: Business concern should encourage customers to pay promptly with the help of offering discounts,...

 Working Capital is describe as the capital  which is not fixed but the more common uses of the working capital is to consider it as the difference between the book value of current assets and current liabilities. Working capital is need for meeting day to day requirement of business. For example payment to creditors, salary paid to workers, purchase raw materials etc. Working capital can be classified into two parts Gross working capital Net working capital Gross Working Capital is the general concept, which consider both current assets and current liability of business. Net working capital is the excess of current assets over the current liabilities of business during a particular period. Components of working capital Current Assets and current liabilities Current Assets; Cash in  Hand, cash at bank, Bills receivable, Sundry debtors,  short term loan advances, inventories, Prepaid expenses, Accured income. Current Liabilities: Bills Payable, Sundry Creditors, Outst...

 Capital Budgeting is acquiring input with long term return” Richard and Green Law According to the definition of Lyrich, “Capital budgeting consist in planning development of available capital for purpose of maximising the long term profitability of concern. Need and importance of capital Budgeting Huge Investment: Capital budgeting required huge investment of funds, but the available funds are limited, therefore the firm before investing projects, plan are control its expenditure. Long Term:- Capital Expenditure is long term in nature or permanent in nature. Therefore financial risk involved in the investment decision are more. If higher risk are involved, it need careful planning of capital budgeting. Irreversible: The capital investment decision are irreversible , are not changed back, once the decision is taken for purchasing a permanent asset, it is very difficult to dispose of those assets without involving huge losses. Long term effect: - Capital budgeting not only reduces ...

 The term leverage refers to an increased means of accomplishing some purpose. Leverage is used to lifting heavy objects, which may not be otherwise possible. In the financial point of view, leverage refers to finish the ability to use fixed cost assets or funds to increase the return to its shareholders. Leverage can be classified into three major headings according to the nature of the finance mix of the company. Leverage=Financial Leverage & operating Leverage, Composite leverage is mixture of Financial & Operating Leverage. Operating Leverage: The leverage associated with investment activities is called as operating leverage. It is caused due to fixed operating expenses in the company. Operating leverage may be defined as the company’s ability to use fixed operating costs to magnify the effect of changes in sales on its earnings before interest and tax. Operating leverage consists of two important costs (Fixed cost and variable cost) when the company is said to have a h...

Cost of capital is an integral part of investment decision as it is used to measure the worth of investment proposal by business concern. It is uses as discount rate in determining the present value of future cash flows associated with capital projects. Cost of capital is also called as cut off rate, target rate, hurdle rate and required rate of return. When forms are using different sources of finance, the finance manager must take careful decision with regard to the cost of capital, because it is closely associated with the value of the firm and earning capacity of the firm. Classification of cost of capital. Explicit and implicit cost Average and marginal cost Historical and future cost Specific and combined cost Explicit and implicit cost The cost of capital may be explicit or implicit on the basis of the consumption of the capital. Explicit cost is the rate that the firm pays to procure financing.  Implicit cost is the rate of return associated with the best investment opportu...

The term financial structure is different from capital structure. Financial structure shows the pattern total financing. It measures the exact to which total funds are available to finance the total assets of capital. Financial structure = Total Liabilities Financial structure = Capital structure+ Current Liabilities Nature of financial structure: It includes both long term and short term sources of fund. It means the entire liabilities side of the balance sheet Financial structure consists of all sources of capital It will be not more important while determining the value of the firm Nature of Capital Structure: It includes only long term sources of funds It means only the long term liabilities of the company. It consists of equity, preference and retained earning capital. It is the major determinations of value of the firm. 

Capital is the major part of all kind of business activities, which are decided by the size, and nature of the business concern. Capital may be raised with the help of various sources. If the company maintains proper and adequate level of capital, it will earn profit and they can provide more dividends to its shareholders. Capital structure is the kind of securities and proportionate amounts that make up capitalization. It the mix of different sources of long term sources such as equity shares, preference share, and debenture, long –term loans and retained earnings. Capital structure is the permanent of financing of the company represented by long term debt and equity.

Capitalization is one of most important part of financial decision, which is related to the total amount of capital employed in the business. Understanding the concept of capitalization leads to solve many problems in the field of financial management. Because there is a confusion among capital, capitalization and capital structure. Capitalizations refers to the process of determining the quantum of funds that a firm needs to run its business. Capitalization is only the par value of share and debenture and it does not include reserve and surplus. Types of capitalizations Overcapitalization Under capitalization Water capitalization Over capitalization Over capitalization refers to the company which possesses an excess of the capital in relation to its activity level and requirement. In simple means, over capitalization is more capital then actually required and the fund are properly used. Causes of over capitalization: Over issue of capital by company Borrowing large amount of capital a...