Month: February 2014
Definition of net profit ratio:
Net profit ratio is the ratio of net profit (after taxes) to net sales. It is expressed aspercentage.
Components of net profit ratio:
The two basic components of the net profit ratio are the net profit and sales. The net profits are obtained after deducting income-tax and, generally, non-operating expenses and incomes are excluded from the net profits for calculating this ratio. Thus, incomes such as interest on investments outside the business, profit on sales of fixed assets and losses on sales of fixed assets, etc are excluded.
Net Profit Ratio = (Net profit / Net sales) × 100
Total sales = $520,000; Sales returns = $ 20,000; Net profit $40,000
Calculate net profit ratio.
Net sales = (520,000 – 20,000) = 500,000
Net Profit Ratio = [(40,000 / 500,000) × 100]
NP ratio is used to measure the overall profitability and hence it is very useful to proprietors. The ratio is very useful as if the net profit is not sufficient, the firm shall not be able to achieve a satisfactory return on its investment.
This ratio also indicates the firm’s capacity to face adverse economic conditions such as price competition, low demand, etc. Obviously, higher the ratio the better is the profitability. But while interpreting the ratio it should be kept in mind that the performance of profits also be seen in relation to investments or capital of the firm and not only in relation to sales.
In the last unit we studied about the management of economic and operational exposure. Economic exposure refers to the extent to which the economic value of a company can decline due to changes in exchanges in exchange rate. It is the overall impact of exchange rate changes on the value of the firm. Managing economic exposure is very important for the long-run health of an organisation than managing changes caused by transaction or translation exposure.
In the present unit you will study about the management of MNCs. Reflecting the trend towards more liberal world financial markets, major corporations throughout the world have begun to internationalize their capital structure by raising funds both in the domestic as well as in the foreign market. An MNC’s cost of capital may be lower than that of a domestic firm in the same industry due to its size advantage, access to international capital markets and an ability to stabilize cash flows through international diversification. Concurrently, MNCs whose operations are geographically well diversified will tend to have a lower systematic risk than those operating mainly in the domestic market.
Farewell Egon Spengler,
You really were a blast
The legacy you leave behind
Will last, and last, and last
With PKE meter and proton pack
Ray and Peter by your side
And Winston once you’d hired him
In ECTO-1 you’d ride.
You saved New York not once, but twice
And hinted at a third
But now that chance has been and gone
I wish it had occurred.
Because today you passed away
Your proton pack hangs forlorn
Without your massive input
The Ghostbusters wouldn’t be born.
I know that you weren’t real
That Harold was your name
But to me, Egon Spengler
Is the thing that brought you fame.
Don’t cross the streams, you said to us
It’s the most important rule.
And one that every kid will know
Because it’s just plain cool.
Like don’t feed after midnight,
And never get them wet.
Of all the 80’s movie rules
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What exactly is Personality? We have very often heard saying , “ He/She has a good personality” or “ What a personality he/she has !”. Well Personality is characteristic thoughts, behaviors and feelings that are associated with an individual. Basically it how one attracts others through is deeds and words.An individual could develop his or her personality if he has a goal in mind and he decides firmly that he would develop himself in all aspects of life both internally and externally.
Personality development is not some rocket science. T could be developed gradually and steadily. The little things that you do or take the effort to do, does make a much greater impact in your life. It is all how YOU decide how you want others to see you. For a better understanding, simple steps that could be followed over a period of time are illustrated below for a…
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