FULL FORM OF CEO

FULL FORM OF CEO

               The CEO stand for Chief Executive Officer. CEO is the highest post in an organisation or company who looks after overall management and administration.

ROLE OF CEO

               CEO is entrusted a lot of responsibility from the company's chairman and board of directors. Some of the CEO's responsibilities are -

1. Makes major corporate decisions.
2. Motivates the employees of the organisation.
3. Makes the healthy working environment.
4.Leads all the operations of the organisation
5. Assigns responsibilities to its sub - ordinates.
6. Make change in policies and strategy.
7. Recommends annual budget and intelligently manages resources of the organisation.
8. Help in the selection of board members.
9. Monitoring the production,marketing,promotion,delivery and quality of product and services.
10.Initiate oversees fundraising planning and execution etc

QUALIFICATION TO BECOME CEO

             There is no specific educational qualification for this post. It is a top most post in the organisation hence appointed by the board of directors. It is highly responsible post so while choosing CEO board of director to see capability of the candidate in term of some technical qualification and experience.

       

FULL FORM OF EBITDA

FULL FORM OF EBITDA

The full form of EBITDA stand for Earning Before Interest Taxes Depreciation and Amortization. It is used to evaluate company's operating performance.

focuses on the operating decisions of a business because it looks a the business profitability from its core operation before the impact of leverage, capital structure and non cash items such as depreciation are taken into account.

EBITDA = Next income + Interest + Taxes + Depreciation + Amortization.

It can also be expressed as follows

EBITDA = Operating profit + Depreciation + Amortization

USES OF EBITDA

It is commonly used as a proxy for cash flow. It provide and analyst a quick estimate of the value of the company. In addition, when a company is not making profit, investors can evaluate company by EBITDA. This metric is very good for comparing similar companies in some industry. Business owners use it to compare their performance against there competitors.

DISADVANTAGE OF EBITDA

EBITDA show earning before Interest, Taxes, Depreciation and Amortization. The earning may be ambiguous. For example, a fast growing manufacturing company may present increased sales and EBITDA year over year. To expand there business it acquired many fixed assets over time and they may be funded with debt. Although it may appear that the company has strong topline growth investors and evaluators should look other metrics as well, such as capital expenditure, cash flow, and net income.

FULL FORM OF ARPU

 FULL FORM OF ARPU

The full form of ARPU is Average Revenue Per Unit. It is the measure of the revenue generated by per unit. It is also known as average revenue per users. It helps management of company as well as investors to refine their analysis of a company revenue generation. Capability and growth at the per unit level. It is calculated as total revenue divided by the numbers of unit, users or subscribers.

Calculator Of ARPU

In order to calculate ARPU accurately, there must be define a standard time period. Most telephone and communication companies calculate ARPU on a month to month basis. The total revenue generated during the specified time period should be divided by the number of units or users.

Uses Of ARPU

This term is used by companies which offers subscription services to there clients for instance, telephone carriers, internet service providers and hosts. It is a measure of revenue generated by one customer phone, internet service etc per unit time, particularly per year or month.    

  

FULL FORM OF CAGR

 FULL FORM OF CAGR

Full form of CAGR is Compound Annual Growth Rate. It is the rate of return that would be required for an investment to grow from its initial balance to its ending balance. Hence it is the instrument of measuring of growth of invested amount. CAGR may be both positive and negative. If the invested amount has increased the CAGR will be positive and if the invested amount has decreased the CAGR may be negative.

So CAGR is one of the most accurate ways to calculate and determine returns for anything that can rise or fall in value over a period of time. It is the tool for the investors to evaluate the CAGR of two alternative investment and choose the best one for their investment. CAGR does not reflect investment risks.

FORMULA FOR CALCULATION OF CAGR

CAGR = (EV/BV) 1/n  -1

Where EV = Ending value 

           BV = Beginning value

           n = Number of years

 HOW TO USE CAGR

Suppose anyone has invested Rupees 10,000 in a portfolio with the following returns.

• From Jan 1 2015 to Jan1 2016 invested amount grew to 13,000 (30% in year one)
• From Jan 1 2016 to Jan 1 2017 invested amount grew to 14,000 (7.69%)
• From Jan 1 2017 to Jan 1 2018 invested amount grew to 19,000 (35.71%)

Hence it is evident that the year to year growth rate is different. Such as in first year growth is 30%,in second year growth is 7.69% and in third year growth is 35.71%.

CAGR = (EV/BV) 1/n -1

            = (19,000/10,000) 1/3 -1

            = 23.86%     

                                     

                                       

      

FULL FORM OF MFs

    WHAT IS MUTUAL FUND

 MFs stand for Mutual Funds. A mutual fund is is an investment instrument which pools in money from different investors and invest the collected amount in a set of different asset classes like equity,debt,foreign securities and gold. Mutual funds are becoming popular in India because of its various benefits. Mutual funds have attractive performance history returns higher than those earned on conventional instruments of instrument like banks,post office,PF etc. Mutual funds enables investors to create diversified investment portfolios with investment as low as Rs 500.
        
        Another reason which makes mutual fund a preferred choice among investors is the professional management of funds. A mutual fund is managed by a fund manager who is an expert and having adequate experience in the investment industry. This provides an assurance to the investors that their money is in safe and secure hand. Mutual funds are regulated capital market regulatory SEBI (Securities and Exchange Board of India) and AFMI (Association of Mutual Funds in India).

TYPES OF MUTUAL FUND

    As per the SEBI, mutual funds can be broadly classified into three categories-

1. Equity Fund
2. Debt Fund
3.Hybrid Funds

BENEFITS OF MUTUAL FUND INVESTMENT

1.    Mutual fund allows flexible investment amount. A mutual fund investment can be started with an amount of as low as rupees 500 while there is no limit on the maximum amount you can invest.

2. Mutual funds are managed by professionals with a nominal fee of administration and management of a mutual fund scheme called Expense Ratio.
3. Mutual fund provides a higher return compared to other saving investment like saving in banks in post office in PF. Mutual funds should be invest for at least minimum 3 years to get the better return.
4. Mutual fund investor to access a wide and diversify its investment portfolio that can include equity of varying market capitalisation as well as debt and money market instruments for and investment amount which can be as low as rupees 500.
5. Mutual fund provides systematic investment option. A systematic investment plan is a method of investing in mutual funds that allows investor to invest a fixed some amount in a mutual fund scheme at predetermined interval (daily,weekly, monthly, bi annually, or annual). SIP investment reduce the potential financial risk associated with a lump sum investment.
6. An equity linked saving schemes (ELSS) is a type of mutual fund which help an investor in getting a tax benefit in addition to the above mentioned benefits. An ELSS comes with a locking period of three years and every ELSS investment qualifies for a tax deduction of up to Rs.1.5 Lac under section 80C of Income Tax Act.

FULL FORM OF NSCCL

     NSCCL stand for National Securities Clearing Corporation of India Limited.Now it is known as NSE clearing limited. It is a wholly owned subsidiary of NSE which is responsible for clearing and settlement of all trades executed on NSE and deposit and collateral management and risk management function.It was the first clearing corporation to be established in India and introduced as settlement guarantee before it became a regulatory requirement.

OBJECTIVE OF NSCCL

There are some objectives of the NSCCL which are as follows-

1. To bring and sustain confidence in clearing and settlement of securities.

2. Promoting and maintaining short and consistent settlement cycles.

3. Provides counter party risk guarantee.

4. To operate a tight risk containment system.

     As per CRISIL,the rating reflects NSCCL's status as Clearing Corporation for NSE. The rating also factors in NSCCL's rigorous risk management controls and adequate settlement guarantee cover. CRISIL has further stated that NSCCL's risk management system is comprehensive and is regularly upgraded to pre-emptive market failure.

FULL FORM OF LLC

    LLC stand for Limited Liability Company. It is a business structure that can combine the pass through taxation of a partnership or sole proprietorship with the limited liability of a corporation. It is a legal form of company that provides limited liability to its owner in many jurisdictions. It is a not corporation under state law. LLCs are well known for the flexibility that they provide to business owners depending upon the situation,an LLC may elect to use corporate tax rules instead of being treated as a partnership and under certain situation LLC may be organised as not for profit.
     A limited liability company is a hybrid legal entity having certain characteristics of both a corporation and a partnership or sole proprietorship. As a business entity,an LLC is often more flexible than a corporation and may be well- suited for companies with a single owner. When an LLC is formed ,it is said to be organised and its founding document is known as 'article of organisation'. The owner of beneficial right in an LLC is known as a member rather than shareholder. Ownership in an LLCis represented by a 'membership interest' or an LLC interest rather than represented by 'shares of stock'.

FULL FORM OF NBFCs

               NBFCs stand for Non Banking Financial Companies. It refers to the financial institution which offer banking services without having a banking licence. These financial companies are registered under the company Act 1956 and do business as a non banking financial institution as defined under RBI Act, 1934. The main business of NBFC is of distribution of loans,acquisition of shares,stocks,bonds issued by government,insurance business,chit fund business etc.
             The major difference between NBFC and bank is that in a Bank customers can deposit money and withdraw it whenever it is required,but NBFC does not accept deposit and withdraw facility is not provided. Deposits in NBFC are not treated as savings they are basically long term deposits or premiums such as premium for insurance policy,health insurance policy etc.

The followings are the NBFCs---

1. Insurance companies which are regulated by IRDA.
2. Housing Finance companies which are regulated by National Housing Bank.
3. Merchant Banking Companies,stock Broking Companies,venture capital bank which are regulated by SEBI.
4. Nidhi Companies,which are notified by the Company Act 1956 and are regulated by corporate ministry.
5. Chit Fund Companies which are defined under Chit Fund Act 982 and are regulated by the state government.

FULL FORM OF LTP

               LTP stand for Last Trade Price. Stock price are always fluctuates according to availability of shares for sale and the demand for the those shares. At any time the price seen of the stock is called last traded price. Stock price is not set by anyone. Those who have share to sell put a price willing to sell and those who want to buy shares put a price willing to pay. Stock exchanges then match buyers and sellers. The seller received the bid price,the buyer pays the ask price so the transaction completed.
       It can be understand in simple buyers place bids in the market mentioned how much they wish to buy and at what price. Seller post an offer also known as ask stipulating how much they want to sell and what price. Whenever a buy and sell order come together at the same price and transaction completed ,an last traded price is created.

FULL FORM OF KYC

         KYC stand for Know Your Customer. It is a process followed by a financial  institution or other organisations to collect the information to established the identity of a client. This process was introduced by Reserve Bank of India to curb the financial frauds such as identity theft,illegal transactions and money laundering. RBI has instructed the banks to follow the KYC process while opening the account to curb any illegal transactions.
        This process protects the customers from fraudsters who might use their name,address and forged signature to make illegal transactions. It also involves obtaining information of the customers which include all their personal details with attached proofs that works as an authentication of the customers activity and assures the respective bank and organisation about a clean record of that client/customers.

PURPOSE OF KYC 

       The followings are main objectives of the KYC--

1. It ensures that the bank/organisation will not be misused or taken advantage of by some fraudsters through money laundering activities.
2. It procedure helps the banks,financial institution and any organisation to know the financial activities or dealings of its customers /clients.
3. It also helps keeping a check, that the customers/clients of any organisation are not involved in any type of money laundering and can assess the risk.
4. It also helps in curbing corruption,restricting illegal activity such as terror funding ,money laundering and identity theft.

FULL FORM OF ISIN

                ISIN stand for International Securities Identification Number. It is a unique code that is used to identify securities. The National Number Agency ( NHA) is responsible for allocating ISINs for all securities issued in the country. Since 2004 the ISIN code became extremely important when the European union mandated the use of the system for significant regulatory reporting needs.

FEATURES OF THE ISIN

           Those who are involved in the trading securities internationally have to use the ISIN numbering scheme. The United States and Canada uses the CUSIP numbering system that is similar to ISIN. The main features of the ISIN are as follows--

1. The first two letters of the ISIN code refer to the country in which the issuing company is based out of.
2. The nine digits identify specific security and act as a unique identifier.
3. The final character also referred to as the 'check digit' checks forgery. 

ISIN IN INDIA

           In India issuing ISIN for various securities has been assigned by the Securities and Exchange Board of India to the National Securities Depository Limited. For the government securities,the allotment of the ISIN code is regulated by the Reserve Bank of India.

FULL FORM OF IRDA

         IRDA stand for Insurance Regulatory and Development Authority. IRDA is the regulatory body in India which governs both Life Insurance and General Insurance companies. India is a very big country that offers great opportunities to various segments one of that is the insurance sector.

ESTABLISHMENT OF IRDA

        Insurance in India started in the year 1850 with the first General Insurance Company established in Kolkata. As time passes the insurance market becomes competetive as many insurers started emerging both in life and non life sectors. The existing companies practised their business on their own rates and rules. It made customers insecure that brought the credibility of the insurance market at stake. To secure the customers interest government realised that there should be independent regulatory which can regulate all the insurance companies. Hence government established the IRDA.

FUNCTION OF IRDA

      IRDA is an autonomous  body with the aim to regulate the fair practices in insurance market to protect the the right of customers. The followings are the functions of the IRDA.

1.   It protect the interest of policyholders at the time of claim,issuance of the policy,and cancellation of the claim.

2.  There is a need to control the market with single rule and regulation which brings the players together and then compete with each other. IRDA has set a code of conduct for all insurance companies,surveyors and loss assessors.

3.   IRDA prevent from any misdeed,it calls for both annual or required based audit.

4.   IRDA regulates the rates and term offered by the insurance companies to bring equality for the customers.

5.  In case of any dispute between between the insurance company and policy holder then IRDA step in and provide a resolution.

   

FULL FORM OF IPF

            IPF stand for Investor Protection Fund. NSE has established an Investor Protection Fund with the objective of compensating investors in case of defaulters asset not being sufficient to fulfill the admitted claims of the investors,for investors education and awareness. The investors protection fund is administered by registered trust created for the purpose. The investor protection fund trust is managed by trustee,consisting of public representative,board members and senior officials of the exchange. 
           The stock exchanges have beented to fix legitimate compensation limits in consultation with investor protection fund/ customer protection fund trust. It is also provided that the amount of compensation available against a single claim of an investor arising out of default by a member broker of a stock exchange shall not be less than Rs one lakh in case of major stock exchange like BSE and NSE and Rs 50,000/ in case of other stock exchange.

FULL FORM OF HUF

           HUF stand for Hindu Undivided Family. One can save taxes by forming a family unit and combing asset to form a HUF. HUF is taxed separately from its member. For instance A Hindu family can come together and form a HUF likewise Buddhist,Jains and Sikhs can also form a HUF. HUF has its own PAN and files tax returns independents of its members.
            A HUF is taxed separately from its member,hence deductions such as under section 80C or exemptions allowed under the tax laws can be claimed separately. For instance if someone and his spouse along with two children decided to create a HUF all four members as well as HUF can claim a deduction for section 80C and will be eligible for other exemptions.

TAX CRITERIA FOR HUF

    The followings are the tax criteria for the HUF.

1. HUF has its own PAN and files a separate tax return. A separate joint  Hinhu family business is created since it has entity separate from its members.
2. Deduction can be claimed under section 80C and for the others exemptions.
3. HUF can take an insurance policy on the life of its members.
4. HUF can pay salary to its members. This salary expenses can be deducted from the income of HUF.
5. A HUF is taxed at the same rates as an individual.     

HOW HUF IS FORMED

       For forming HUF some conditions are required which are as follows--

1. One person cannot form HUF,for forming HUF family member are required.
2. A HUF is automatically created at the time of marriage.
3. HUF consist of a common ancestor and all his legal descendants such as their wives and unmarried daughters.
4. HUF can be formed by HIndu,Buddhist,Jains and Sikhs family.
5. HUF normally has asset that comes as a gift,a will,or ancestral property or property acquired from the sale of joint family property or property contributed to common pool by members of HUF.
6. After forming the HUF it must be registered in its name. A HUF should have a legal deed. The deed must contain details of HUF members and the business of the HUF. A PAN number and a bank account should be opened in the name of the HUF.

DISADVANTAGE OF MEMBERS

   There are some complication with the HUF which are as follows--

EQUAL RIGHT OF MEMBERS

 The greatest disavantage of opening a HUF is that it members have equal right on the property. The common property cannot be sold without the consents of all the members. Any addition to the family by way of birth or marriage, become a member of the HUF and get equal rights. 

 PARTITION

          The most difficult  of opening A HUF is closing it down. The only way a HUF is dissolved  is by a partition.  All members have to agree to dissolve the HUF.

  LOSING OF JOINT FAMILY RELEVANCE

           HUF was  recognise as a separate taxable entity by the Income Tax Department. However, in today's time, where nuclear family are the norm, it is losing relevance.

HUF IS ASSESSED TILL PARTITION

      Once HUF is formed , it  must continue to file it tax return, unless a partition takes place.

FULL FORM OF GDS

                  GDS stand for Gross Domestic Savings. We know that GDP is the money that combines of all the final goods of of various products in the domestic territory of a country in a particular year. Hence Gross Domestic Product measures the total output of goods and services for final use within a country regardless of the allocation to domestic and foreign claims.
              A part of the GDP is consumed. The remaining after the consumed is saving. Hence Gross Domestic saving is the Gross Domestic Product minus final consumption. The saved money is either kept with the public or is reinvested,when money is reinvested it is known as capital formation. The ratio of saving and investments is very important for the economic growth of the country.
           The Gross Domestic Saving has two parts. First is Public Sector and second is Private sector. The largest segment of Private Sector is the Household Sector. Another segment of the private sector is the private corporate sector.  

FULL FORM OF FPO

                 FPO stand for Follow on Public Offer. A follow on public offering is the issuance of shares to investors by a company already listed on stock exchange. A follow on public offering is an additional shares made by a company after an initial public offering. FPO usually announce by companies to raise equity or reduce debt.
               Public companies can take advantage of an FPO through an offer document. It should not be misunderstand wit IPO,the initial public offering of equity to the public. FPOs are additional issues made after a company is listed on an exchange.

TYPES OF FPO

          There are two main type of follow on public offers. The first is dilutive and second is non dilutive. The first is dilutive to investors,as the company's board of directors accepts the proposal to increase the share float level or the number of share available. In dilutive follow on public offering seek to raise money to reduce debt or expand the business. Hence increase in the numbers of shares outstanding.

        The other type of follow on public offer is non dilutive. It is useful when directors or substantial shareholders sell -off privately held shares. In a non-dilutive offer,all share sold are already in existence. It is normally referred to a secondary market offering.

WHAT IS GRATUITY

UNDERSTANDING GRATUITY

       Gratuity is given by the employer to his employee for the service rendered by the employee during the period of employment. It is normally paid at the retirement time but it can be paid earlier in case of demise of the employee.

       A person is eligible to get gratuity only if he has completed minimum 5 years of service with an organisation. However gratuity can be paid before the completion of five years in case of death of the employee or if has become disabled due to accident or disease.

     Payment of gratuity depends on two factors ie last drawn salary and years of service rendered. Payment of Gratuity Act,1972 has divided non- government employee into two categories.

1.  Employee covered under this Act

2.  Employee not covered under the Act

   An employee will be covered under the act if in an organisation number of employee at least 10 person on a single day in preceding 12 months. Once an organisation comes under the purview of the gratuity act,then it will always remain covered even if the number of employee is falls below 10.

CALCULATION OF THE GRATUITY

 1. FOR EMPLOYEE COVERED UNDER THE ACT    

        There is a formula to calculate the gratuity. The formula is based on the 15 days of last drawn salary for each completed year of the service or part of thereof in excess of six months. The formula is as follows -

Gratuity=

  15 x Last drawn salary x tenure of service

     ------------------------------------------------------------------------------

                 26
  Last drawn salary includes basic salary,dearness allowance and commission received on sales.

It can be understand with the example--

Shyam retires after the service of 24 years and 8 month. His last drawn salary was 50,000 per month. How much gratuity he will get at the time of retirement.

Solution--     Last drawn salary = 50,000
                       Tenure of service is 25 years ( here he has rendered 24 years and 8 month of service which is more than the six month so 8 month will be count as one year)

    So putting the values in formula =    15 x 50,000 x25
                                                                       ----------------------
                                                                             26
                                                                 =   721153.84
                                                                 

2.  FOR EMPLOYEE NOT COVERED UNDER THE ACT

     There is no law that binds an employer from paying gratuity to his employee even if the organisation is not covered under the Act. The amount of gratuity payable to the employee can be calculated based on half month salary for each completed year. Here service must be completed in a years if anyone has worked for 24 year and 8 month so no of years will be count 24 years for the calculation of gratuity.

   In this case the formula will be=   
      
      Gratuity =   15 x last drawn salary x tenure of service
                           ---------------------------------------------------
                                            30

FULL FORM OF FOREX

            FOREX stand for Foreign is1000change. Foreign Exchange is the trading of one currency for another. Foreign exchange transactions can take place on the foreign exchange market also known as Forex market. Foreign Exchange is a global market where national currencies are exchanging with one another. Foreign exchange trading utilizes currency pairs,priced in term of one versus other.

 WORKING METHOD OF FOREIGN EXCHANGE

          The market determines the value also known as an exchange rate of the majority of currencies which are traded on exchange. Foreign exchange can be as simple as changing one currency for another at a bank. Trading currencies are listed in pairs,such as USD/CAD,EUR/USD, USD/JPY etc. This represents the U.S. dollar USD versus the Canadian dollar CAD, the Euro EUR verses the USD and the USD verses the Japanese Yen JPY.

       There will be be a price associated with each pair,such as  1.5432. If this price was associated with the USD/CAD pairs it means it costs 1.5432  CAD to buy one USD. If the price increases to 1.7328 then it now costs 1.7328 CAD to buy one USD. The USD has increased in value as CAD decreases,because it now costs more CAD to buy one USD.

      In the forex market currencies are traded in lots named micro lots,mini lots and standard lots. A micro lot is 1000 worth of a given currency, a mini lot is 10,000 and a standard lot is 100,000. In forex market trading is done in lots only such as micro,mini and standard. If an individual wants to trade in forex market then he has to trade in lots only where as he can trade in so many lots of micro,mini or standard. For instance he can trade 10 lots of micro or 20 lots of mini or 5 lots of standard according to capacity and risk appetite.

    

FULL FORM OF FIIs

             FIIs stand for Foreign Institutional Investors.   FII are institutional investors that invest in assets belonging to a different  country other than that where these organisation are based. FII play a very important role in the economy. FII are the big investment companies like investment banks,mutual fund,hedge fund,insurance companies,pension fund etc. They invest huge amount of money in the market. With the buying of securities by these big institutional investors market tends to move upwards. 
             Some developing economies attracts the foreign institutional investors with the view that investors will get higher potential growth. This may be one reason FII are commonly found in India which has a high growth economy and attractive individual corporations to invest in. All FII in India must register with the Securities and Exchange Board If India before investing in the Indian Market. 
             The process of investment of Foreign institutional Investors can be understand with the following example-- If a mutual fund house of France asses a high growth investment opportunity in an Indian listed company, it can make investment in that Indian company by purchasing of that company's share. In type of investment arrangement also benefit private France investors who may not be able to buy Indian stock directly,instead they can invest via mutual fund and take part in the high growth potential .  
    

FULL FORM OF ELSS

   ELSS stand for Equity Linked Saving Schemes. Like other investments option to save tax ELSS is one of the most likely saving schemes. It is diversified equity mutual funds which invest the main part of money in equity and equity related securities. The fund managers asses the companies and sectors that have strong potential growth and invest the money into it.

TYPES OF ELSS  

      ELSS is mainly of three types.

GROWTH OPTION

    In this option investment is made for the long term. The investors will get the benefit at the end of the tenure that will help in improving the investment over period of years. The return will be completely depend upon the market return. Though investment is made for a long term there is more chance to be benefited on the investment.

DIVIDEND OPTION

     In this option the investors gets the timely benefit of dividends as compared to the wholesome amount at the end is called the dividend option. The dividend that investor get is not liable for taxation.

DIVIDEND REINVESTMENTS OPTION

      In this option investors has the option to reinvestments the dividends received again it will increase the investment amount hence the return will be good after a certain period of time.

BENEFIT OF ELSS

•      A minimum lock in period for 3 years that is considerably less in compare to other mutual funds and saving schemes.
•      ELSS can earn high returns compare to other savings schemes.
•      After lock in period if investment is withdrawn it will be  100% tax free.
•      It works on the principle of power of compounding that will help to get good return.
•      There is no maximum limit to invest.