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Qualities Required To Be An Accountant

Introduction An accountant handles one of the most crucial roles in a business regardless…

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Introduction

An accountant handles one of the most crucial roles in a business regardless of it being for a large corporation or a small business. They are the financial backbone of a business and handle monetary records, money transactions, and timely taxes.

There are different types of accountants. Government accountants work for government agencies’ monetary records. Public accountants are either self-employed who work audits, documentation, and tax for clients or they account for firms. Management accountants are employed by a single company and they account for internal financial records of that company only.

Who Is An accountant?

An accountant is a professional who is in charge of the protection and transliteration of technical records and survey of financial statement analysis. They work for firms or big and small companies.

An accountant’s day-to-task mostly depends on their educational background and the designation they hold. Have you ever wondered if there was an accounting centre near me? How wonderful would it be to start your journey towards your dream job!

Most people start their journey by getting themselves into a school followed by a Bachelor’s degree in the same BCom course.

But some firms may demand additional educational certifications after BCom. Some of the common accounting designations are  Certified Internal Auditor (CIA), Certified Management Accountant (CMA), and Certified Public Accountant (CPA). So, for accounting training and placement, one should look for good cl.

What Does An Accountant Do?

Accountant paints a picture of a company’s stand in the global market by using numbers and financial statements. Some of the accountants’ everyday tasks include the following :

  1. Preparation of profit and loss statements and monthly cost accounting reports.
  2. Maintaining and processing monthly payments and stipends.
  3. Completing audits and interacting with auditors.
  4. Analyzing and accounting.
  5. Evaluating and accounting budgets, outlay, payments, and bills.
  6. Settling account discrepancies.
  7. Maintaining computer software and manual filling systems.

Who Hires An Accountant?

Various businesses hire accountants to balance their taxes and audit the financial records. Organizations having complex financial systems and loaded transactions require accountants.

Some examples of such organizations are:

  1. Universities And Schools
    Schools and colleges have complex monetary systems and require professional accountants to manage their profits and expenditures. The accountants hired are supposed to make sure that the capital and funds are sufficient to meet the needs of the institution’s various departments and covers the college tuition expenses.
  2. Hospitals
    Hospitals and healthcare providers work with insurance agencies to help people with medical needs. The job will require working directly with insurance companies and make sure the organization doesn’t exceed its expenses.
  3. Agencies of Government
    This sector needs high-precision accounting and ensuring that the revenue and expenditure get properly recorded. Since the government agencies are so large, the job vacancies are a lot as well. The candidate will be responsible for recordings of various programs and initiatives under the compass of these agencies.
  4. Entertainment and hospitality companies
    These businesses perform thousands of transactions every day and experience a lot of revenue every day. They also need accountants to collect the receipts, records, and tax time rolls. They also involve in managing employee payrolls.

Strengths That An Accountant Should Have

  • Analytical Skills
    “Good accountants can pull the analysis together, great accountants look at the output and judge whether it is reasonable, so as not to waste everyone’s time on an analysis that makes no sense when you take a step back and look at it from a common-sense standpoint.”- Bob Prather

    Accounting is a meticulous task that demands attention and precision. 
  • Organization
    The work of an accountant includes client meetings, deadlines, and following proper guidelines. Each of these works demands a notable amount of documentation and keeping track of all the paperwork. 

    “The best way to stay on top of deadlines is by getting organized”- Logan Alec
  • Critical Thinking
    Critical thinking is an invaluable skill in the accounting profession.
    Accountants face a lot of fallacies, discrepancies, and imprecision in their daily work that needs to be detected and rectified. 
    These fallacies’ can have serious aftermath if not addressed in time. Hence, accountants need to think beforehand and think critically to face all potential risks and solve them in time.
  • Adaptability
    As we know that change is the only constant, it holds for the accounting profession as well.
    It constantly changes and evolves. Accountants should always be ready to readjust to technical advancements, workplace dynamics, and altering standards and protocols.
  • Interpersonal Communication
    Accountants serve as data translators. Accountants work for clients and many of them may not be aware of complex monetary concepts. Thus accountants are required to spell out their work and transform the complex concepts into average peoples’ understanding.
  • Time Management
    “Working on different projects and being able to manage deadlines is a trait that separates passable accountants from their top-shelf peers” – Kyle Bryant

    Multitasking and proper management of all the work are the top skills an accountant should have to provide satisfactory results for their clients in time.
  • IT And Industry Knowledge
    Accountants should understand how software accounting works and how it can be applied to make a change for progress.

Top Accounting Skills For Success

  • Innovation
    The evolving business world demands an evolving accounting system along its side. Companies often look for candidates assuring to create a change for the better.
  • Enthusiasm
    Enthusiasm is contagious and it brings positive energy to the team. It shows that the candidate is eager to learn his/her trade and believes what he/she is working towards.
  • Trade awareness 
    It is the knowledge of where the company stands in the global market, how it is affected by social, economic, and political issues and how to make progress and move ahead.
  • Integrity
    Building trust and reputation get the job done halfway. Credibility opens the door for new opportunities.
  • Communication
    Accounting systems are not understandable by the common people, this is where communication skills come in. An accountant should be well-versed with the task they are working on and the way they have to translate it for the common people to understand. They have to fill the gap between numbers and stories.
  • Understanding
    Comprehending new statistics and data is crucial.
  • Initiative
    Initiative proves that the candidate is an independent thinker and can work on his own. This welcomes more trust and better opportunities.

Conclusion

Accounting job includes transaction and producing of monetary reports. 

Candidates have to develop problem-solving skills, decision-making, and critical thinking. So if you are someone who is considering venturing into the accounting field, be sure to develop these characters to be the perfect match for what’s expected to come your way in this field.

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Accounting For Reserves And Surplus

Just the way we categorize our expenditures at the end of every month, various…

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Just the way we categorize our expenditures at the end of every month, various business organisations include Reserves and Surplus in their balance sheet keeping their future needs as an organisation in the picture. In simple words, they are the savings of big corporates which can be used as assets during a crisis.

What Do Reserves And Surplus Mean?
Reserves
A financial accounting Reserve is a part of the shareholder’s equity except for basic share capital. A Reserve is profits that have been appropriated for a particular purpose. In accounting terminology, reserve implies the amount set aside for future activities which include buying assets, paying for bonuses or even legal settlements.

Surplus
Surplus describes the amount of an asset or resource that exceeds the portion that is actively utilised. In the budgetary context, a Surplus occurs when income earned exceeds expenses paid.
Reserves and Surplus, as the name suggests, are the accumulated profits that a company has earned and retained over time. Retained profits are the profits that are left after repaying the shareholders. General Reserves are created out of profits and kept aside for the financial strengthening of the company in bad years.

Difference Between Reserves And Surplus
Reserves are the primary amounts that are earmarked by the organisation for specific purposes. Whereas Surplus is where all the profits of the company reside.

Types Of Reserves And Surplus
Depending on their purpose there are various types of Reserves used in a balance sheet.

Capital Reserve
A Capital Reserve is the type of Reserve that is created from capital profits. Capital Reserve is maintained to prepare the company for sudden hazards like inflation, business expansion and funds for new ventures.

  • Cash received by selling current assets
  • Excess on revaluation of liabilities and assets

are a few examples of Capital Reserves.

Capital Redemption Reserve (CRR) 
Capital Redemption Reserve is created when the preference shares or the capital is redeemed. It is a statutory Reserve. When a company wishes to redeem shares a Capital Redemption Reserve account is created to benefit both the creditors and employees.

A Capital Redemption Reserve comes in handy for the company on a rainy day. Several litigations are attached to this reserve such that the company can open this reserve only under certain circumstances.

Security Premium Reserve
It is the additional amount charged on the face value of any share when the shares are issued, redeemed and forfeited. Security premium account is a part of the Shareholders Fund, it refers to the difference between market value and the face value of a share.

Debenture Redemption Reserve
A Debenture is a debt security that lets the investors borrow money at a fixed rate. A Debenture Redemption Reserve must be created to protect investors from the possibility of a company defaulting.

Debentures are not backed by any kind of asset, lien or collateral. Free Reserves are those Reserves upon which the company can freely draw, Debenture Redemption Fund is one such Reserve.

Revaluation Reserve
Organisations have the freedom to construct line items for assets on the balance sheet when they believe it is a necessity for correct accounting to be presented. Revaluation Reserves are not inherently normal, but they can be used when a business assumes that the value of their assets will fluctuate after a certain time frame.

Other Reserves: Specifying Nature And Purpose

Surplus
Surplus i.e balance in statement of profit and loss disclosing allocations and appropriation such as dividend, bonus, shares and transfer to/from Reserve etc.

Accounting is a part of our daily chores, let it be a multi-crore business or the expenses of a middle-class family accounts play a vital role, here is a link to a certified accounting course in Ahmedabad that will make you a pro at finance and accounting.

Why Are Reserves And Surplus Called Liabilities?
Aren’t Reserves supposed to be good? They are money set aside for future endeavours and hazards, How is being financially safe considered a liability? Isn’t having surplus money a boon?

Well here are the answers to all your queries,

Reserves are considered on the liabilities side of a balance sheet because they are sums of money that have been set aside to be paid out on a future date. To be more precise Reserves are considered a liability keeping the peasant scenarios in mind. Reserve is considered a liability keeping all the future requirements in mind.

Reserves also represent the obligations that the form has, which makes Reserves a liability item. Reserves can be future or potential obligations to various stakeholders or future use of funds to benefit various stakeholders.

For a better understanding, we can compare Reserves to a bank, though the bank is always expected to have money, yet it is considered a liability keeping in mind that money is not for the bank but to meet up with the financial needs of their account holders.

What Is Meant By A Negative Reserve?
Negative Reserves are considered as assets, for example, the money which is due to the policyholders i.e debtors. But these are assets which may be realised or forgetting that the policyholders may withdraw, leading to a policy lapse.

To conclude, accounting at the end of the day is an asset to our lives, it is a massive ocean of its own, here is the address of an Accounting institute in Ahmedabad, they offer various  Accounting Training in Ahmedabad that will turn you from a liability to an asset.

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Fixed Asset Accounting

Accounting involves keeping and maintaining the record of a corporation’s financial transactions in a…

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Accounting involves keeping and maintaining the record of a corporation’s financial transactions in a given year. The annals are further used for analysis by the stakeholders, agencies, and tax collection bodies making accountants a crucial wedge in the company’s innards.

Of the concepts an accountant should be well-versed with, the ones of assets and liabilities are the most basal yet indispensable. Here we introduce you to the fundamentals of fixed assets and their accounting.

What Are Fixed Assets?

Fixed assets are the non-liquid physical possessions an organization holds to generate income over the long haul. They are also referred to as capital assets or property, plant, and equipment (PP&Es). 

Fixed assets are not to be done away with in the same accounting year. The list comprehensively includes land, vehicles, office spaces, computers and software licensing, buildings, etc.

The principal criterion for anything to identify as a fixed asset is that it should be held by the company for more than one accounting year. Also, they are tangible and intangible. Long-term bonds and securities don’t make it to the list.

An esoteric aspect of fixed assets is that their book values usually exceed the capitalization limit as set by the organization. However, a company must be careful while setting a cap limit. A too higher or lower value can have far-reaching impacts on its balance sheet.

How? That requires us to delve deeper into the topic. Here is a verified Accounting Certificate Course in Ahmedabad you can take.

Initial Asset Inclusion

It is done at the time of purchase of an asset. 

Now, before adding to its capital stock, a corporation makes the requisite assessments. It compares the total cost incurred on the asset with the gross amount of cash flow it leads to. If the deal seems profitable, it is sealed. 

The initial recordation incorporates the cost of the assets, their transportation and installation amount, testing and preparation fees, taxes, and other such expenditures. Meanwhile, administrative charges, general overhead costs, and expenses not directly enhancing its utility are not recorded here.

When an asset is purchased at its market value, we note its fair value. On the other hand, the interest amount has to be mentioned while documenting for an asset bought on credit. 

The case of an asset being exchanged for another one calls for recording the fair value of the new body. While if it is not possible to assess its cost, the price of the one given up is considered.

Depreciation of Assets

Assets start losing their productivity or we say, they get used up with time. We need to make allowances for this downturn. In accounting, depreciation is apportioning the cost of an asset over its useful life.

Of all the techniques to account for the depreciation of assets, the written down value method is extensively used. As it shows the fair value of the asset at every end of the year. In this method, depreciation is more in the initial year compares to subsequent years. Another method of depreciation is the straight-line method. Here, the accountants are required to subtract the salvage value of the asset from its cost. The resulting difference is then divided by the number of years the company intends to hold the asset for. The figure they arrive at is the yearly monthly depreciation of the asset. In this method, the Depreciation of asset is uniform during the life of the asset.

Companies can choose their modus operandi. However, as per the caveats of the IAS (International Accounting Standards), they are allowed to change it only once. To know more about the IAS and their impact in the field, you can go for this Accounting Course in Ahmedabad as recommended by our experts.

Disposal Of Assets

After a certain point, when assets cease to be profitable, they are to be exscinded. It is usually done when their useful lives come to an end. Sometimes, an unforeseen circumstance (for instance, unexpected obsolescence) forces the company to discard an asset. 

It is however not necessary to throw a valuable possession away when it can be liquidated. The company can exchange the asset for newer ones. Also, they may sell it off. A price higher than the then book value of the asset marks a profit and a lower one points towards a loss.

Whatever the case may be, the loss of a company’s asset shows on its balance sheet. Fresh investments need to be undertaken.

Asset Impairment

Impairment of an asset is where its current carrying value exceeds the gross profits it is estimated to bring in. It is usually the result of unexpected predicaments. 

In simpler words, asset impairment has to do with the chance that fixed capital may not be as economically viable as it is computed to be. Impairment leads to a radical slump in a business’ profits. Asset impairment on the balance sheet is associated with a corresponding loss in the income statement. 

Intangible holdings such as copyrights and trademarks stand higher chances to get impaired. However, under circumstances like unexpected obsolescence, natural calamities, adverse market fluctuations, judgment failures or may be due to some unaccountable reason, fixed assets may undergo the same fate. 

Accountants are supposed to be on the lookout for such incidents. They must warn the stakeholders and the decision-makers of the company’s state of affairs.

Disclosure Of Assets

A corporation does not want every confidential detail to be presented on its annual financial statements. However, certain norms formulated by the national and international bodies need to be followed. An organization has to make the following disclosures about its fixed assets.

  • The carrying value of the assets at the beginning and the end of each accounting year
  • The useful life of the assets
  • Rate of depreciation and the method used to calculate it
  • The effects of acquisitions, disposals, and net foreign exchange on the value of the assets
  • Impacts of revaluation 

To learn about other disclosures, go to the link for this certified Accounting Training in Ahmedabad and stake in your growing accounting expertise.

The Strict Don’ts

While accounting for fixed assets, you need to eliminate the three commonly made mistakes. 

  • Not considering expense costs transportation charges, taxes, and installation amount while recording the purchase of a new asset
  • Disregarding the alteration in the assets’ use while maintaining them
  • Ignoring record-keeping demands relating to insurance

 

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Accounting Coaching Classes for Upskilling and Training Employees

Today, most businesses will agree that employees are their biggest assets. Companies invest a…

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Today, most businesses will agree that employees are their biggest assets. Companies invest a lot in terms of hiring the right candidates and then retaining them too. At the same time, employees are also very passionate about their careers. They don’t shy to move on if there is stagnancy in terms of career growth or learning new skills of accounting training. Therefore, to align the interests of both, it is essential for businesses to make significant efforts towards constant development of the employees.

What Do You Coach About?
Businesses usually provide training to impart skills that are essential / required to perform existing jobs. Obviously, this is given; considering you would like to ensure that the employee can perform in the best possible manner in his/her current role.

However, organizations today also invest in ‘Upskilling’. Upskilling refers to the process of teaching new skills to existing employees through academies like Super 20 Training Institute. Such upskilling could also be essential, or in other cases, desirable for employees; which are discussed below.

Is Upskilling Required In Accounting?
Absolutely! In this constantly evolving business environment, accounting concepts and methods are being updated too. Entire accounting framework is being rejigged and new accounting standards are becoming applicable to the business. Fo example, accounting software (like Tally) is being updated to incorporate changes in laws like GST and so on. In such a scenario, providing training to employees is definitely the need of the hour! Training academies offers excellent accounting coaching classes in Ahmedabad, suitable to different coaching needs.

Whom To Upskill In Accounting?
Upskilling could be classified into two categories. One, teaching those skills which are essential to the changing work environment. For instance, training the existing accounting personnel about the new accounting standards applicable to the organization would be absolutely essential.

Second category could be teaching those skills that may not appear exactly essential to the existing role at hand, but could go a long way in improving efficiencies. For example, familiarizing tax team about the new accounting concepts, accounting software offering Tally courses, would help them in gaining a better understanding. And this will eventually reduce their dependence on accounting team. Sometimes, it could be essential too, say when the tax team needs to understand the applicability of ICDS and how they diverge from accounting standards that the organization follows. In either case, it improves employee morale as he feels he is learning something new and challenging.

A lot of corporates have in-house L&D (Learning & Development) team. Others may tie up with a dedicated accounting academy for this purpose. In either case, the importance of upskilling employees cannot be emphasized enough.

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Future of B.Com Student

Hey, all of the B.COM students out there here is a glimpse of knowledge…

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Hey, all of the B.COM students out there here is a glimpse of knowledge and opportunities on the basis of your stream. As B.Com. students, students have a working knowledge of accounts. Right?

But you know there are some cool buddies who were busy enjoying their college life instead of attending the boring college lectures, but that`s ok. Those free birds also may have a very bright future.

Super 20 the best accounting training institute welcomes all of you to catch your successful flight. You can enroll yourself to book your ticket on that flight. But for that, you must know what services would be provided in that amazing flight.

So here you go, our Super 20 team will provide you knowledge of accounts from `TOE TO HAIR`. B.com student can land their future in a very good company or our team will help to improve your skills so that you can get a prestigious job.

A B.com student always has so many doors to enter. A student can go for accounting, taxation, corporate sectors etc. but what you need all is sharp skills and effective communication. Super20 gives the shape to your personality along with our super training and courses so that you can go for any door with the most effective entry. We all are like not BOOK WORM and even we don’t like to learn things with books, we get bored of books, so our institute gives you practical knowledge on several real cases without any book. Oh, this sounds so amazing yeah, it must be fun and how we can learn things with real cases and that’s also without any BIG FAT BOOKS.

You know what, I have seen that CA is always in trend but that trend not for all of us right? But you guys have ever wondered that if you cannot go for that trend but at least you can do accounting. Right? So what Super 20 does? Super 20 enables you to learn professional accounting. S20 trains a student in a very well manner. The process starts from the very basics. So B.com student is always suitable for the required job. You guys must go for this option because Super 20 after training gives 100% placement opportunity with very well reputed companies.

As I am saying again and again that a B.com student has very bright future ahead and they can be eligible or suitable for any field because this is the reality, a B.com student can never be unemployed until unless he or she willing to do work.  We would just like to say that don’t waste your time students, do something, get experience, get a failure, get success. But do something, never stop learning. Analyse yourself; find out what you are good at. There are so many opportunities waiting for you, come out of your comfort zone and go grab your opportunities.

See friends, there are lots of fields to choose from but choosing the right path is difficult. So choose that field through which you can get something. That can add something new to your personality. Accounting, taxation is something which is very interesting to learn and important too, this can be added as your technical skill in your CV. To learn something under the experts is really amazing and worthy, it really gives you the extra perks to your knowledge and our personality.

So guys what I am saying go for the internship which can be good for you and that would be the best way to know your interest and then easily you can take your successful flight and land it at your best destination.

ALL THE VERY BEST !

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B.Com Student – Ready For The Job

“Ma’m, can I get a job after completing this course?” asked a curious voice.…

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“Ma’m, can I get a job after completing this course?” asked a curious voice. And the sweet reply from a lady was “Oh yes, why not?”

This is not a movie scene. We at Super 20 Training Institute (a.k.a. S20) get such questions from the students day in and day out. But the above question was asked by Rohan – a third year BCom (TY BCom) student exactly a year back. The question was not unique to us, but it was very obvious and unique for Rohan.

Well, Rohan was resident of Ahmedabad and called up the institute for Tally Course. After getting first-hand information over the course, he decided to visit Super 20 Training Institute. After inquiry, he was satisfied that this is the best tally course in Ahmedabad. But he was skeptical about the job prospects. That’s why he asked this question.

Rohan joined morning batch of the institute. Day by day, he was learning. Initially, he was a bit slow on learning. So he took to the mentor at the institute to know what to do. He was advised to put extra 1 hour daily at the institute for practicing what was taught. The trick worked for him. Gradually, he picked up. Rohan was an average student. He got second class in the previous examination of the university. But here he liked the practical approach and practical way of learning thing. The entire course turned out be a guiding factor for Rohan. He got Tally Training, Accounting Training, GST Training, Income Tax Training and soft skills training. This was not only enough. He felt confident about himself after doing the course training.

3 months course was completed. Bells rang for his university examination. He went for the college as well as university examinations. After the examination, he again approached S20 asked for the promise made to him.

“Ma’m, can I get a job?”

In reply, the lady handed over him list of three suitable job vacancies, where he can appear for the interview. He appeared for the interviews at two places and got selected at one of his choice. What else does a BCom student need?

Every year thousands of B.Com students get passed from various colleges / universities. All of them face a situation, where, even after getting good marks, they struggle to find a job of their choice. This situation is created because of our education system. Students get passed, but they do not have required skills for the desired jobs.

At S20, we have endeavored to develop courses which help students to improve their skills, which in turn help them in building careers in Accounting, GST, Income Tax etc. Every year, we have hundreds of cases of BCom students like Rohan, who make their career with the help of Super 20 Accounting Training Institute.

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Principal Book of Accounts

Oh! What is this? Principal book of accounts? Had you attended our accounting course,…

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Principal-Book-of--Accounts the best classes in Ahmedabad

Oh! What is this? Principal book of accounts? Had you attended our accounting course, you would not ask this question. The answer is simple, it called ‘Ledger’. Ledger is the principal book of accounts where similar transactions relating to a particular person or property or expenses are recorded. It is a set of accounts. It contains all accounts of business enterprises whether real, nominal or personal. The main function of the ledger is to classify out sort out all the items appearing in the journal or other subsidiary books under their appropriate accounts so that at the end of the accounting period each account will contain the entire information of all the transactions relating to it a summarized or condensed form.

The following is the specimen ruling of the standard form of the ledger account.

princacc - s20 the best tally classes in ahmedabad

Ledger posting :
The term ‘posting’ means transferring the debit and credit items from the journal to their respective accounts in the ledger. So without practical accounting training also, you can do this. Still, certain minute things which are covered in various accounting courses are also explained here.

Following rules should be observed while posting transactions in the ledger from the journal.

  • Separate accounts should be opened in the ledger for posting transactions relating to different accounts recorded in the journal.
  • The concerned account which has been debited in the journal should also be debited in the ledger i.e., the debit of the journal entry is posted to the debit side. However, a reference should be made of the other account which has been credited in the journal.
  • The concern account which has been credited in the journal, should also be credited in the ledger i.e., the credit of the journal entry is posted to the credit side, but a reference should be given of the other account which has been debited in the journal.
  • It is customary to use the words ‘To’ and ‘By’ while making posting in the ledger. The word ‘To’ is used with the accounts shown on the debit side of the ledger account while the word ‘By’ is used with accounts which appears on the credit side of the ledger account.
  • In the folio column, the page number of the journal form where the entry is transferred to the ledger account is written.

The date of the transaction is written on the date column.

Super20 - the best accounting classes in ahmedabad

super20 the accounting classes in ahmedabad

So, it is very simple and easy. Only thing, which is expected of you is accuracy in the entire process. And for accuracy, all you need is to do lot of practice. Because, at our accounting training institute in Ahmedabad, while teaching various accounting courses, we stress utmost for accuracy.

If you have any questions or are looking for the best accounting training institute in Ahmedabad, you may contact us.

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IL&FS Fiasco and Accounting Statements

Recently, the entire nation has been shocked to see that the institution of the…

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Recently, the entire nation has been shocked to see that the institution of the size, scale and reputation like IL&FS has defaulted on its interest obligations.

It is noteworthy that IL&FS was considered to be one of the most reputed borrowers in India and perceived to be a Government backed institution. We have to understand that what makes such a large institution fail. There may be many reasons, but in the context of this article let us look at the accounting statements only.

Following is a summarized consolidated financial statements highlights of IL&FS in recent past.

Accounting statement

Now we have to understand the items line by line. Because, at Super 20 Training Institute, our aim is to understand these items from a practical perspective. And you are aware that it is the best accounting institute in Ahmedabad. Many accounting institutes in Ahmedabad focus on teaching books. Rather S20 as an Accounting Training Institute has set a benchmark by focussing on such case study based practical approach in learning accounting, taxation, tally, GST etc.

It is apparent that the company was the anyways troubled one looking at the above numbers. The company was borrowing at a fast pace and this has resulted into the highest ever interest expenses being borne by the company. The company’s operating profits are decreasing on one side and on the other side the company’s interest expenses shot up drastically by 21%. The sole reason for this difference was that the company continued to borrow funds from the markets and mostly they were short-term borrowings. As you may be aware that in recent past the short-term interest rates are much higher compared to long-term interest rates. Company’s projects were mostly long-term in nature so they had to ideally raise funds from longer term papers. But the company did the contrary.

So, net if you see revenues of the firm were up by 9% in last one year. That looks quite rosy. Now if we look at the operating profits we have a doubt. Operating profits were down by -13%. That means something is seriously wrong. On rising revenues, the company had negative operating profits.

The company’s depreciation was also not in line with the expectations. It was up about 20%. There also somebody needs to dig deeper. And ultimately that has resulted into the company making cash losses as well as accounting losses. This is very alarming and fishy and only some drastic or magical steps can save this company that we can infer.

Friends, we will examine this case from a financial and accounting ratio analysis perspective in my next article. But as of now what we have understood is that the company was troubled operationally as well as financially. If you do not understand any of this topic discussed above you can approach team S20 for more clarity and understanding. You can also write to us at [email protected]. We provide people of any background a simple, effective and practical training in Accounting, Taxation, GST, Tally. You can know more about our courses at www.s20.in/courses