Insurance

Insurance is a sort of aid that comes handy for the individual insured in situations where the individual effectively shares the risk of an unforeseen financial loss with a company providing the insurance. The insurer concerned obtains a certain amount of money as premium from the insured continually over a time period and in return mollifies the monetary loss of the person concerned during times of distress. The bond between the insurer and the insured is known as an insurance policy which consists of all the terms and conditions and the probable situations under which the person insured shall be provided with financial reimbursement. When the policyholder suffers a loss which is covered under the insurance policy, he can claim for the monetary compensation.
Insurance policies are classified basing upon the risks that they compensate. The prominent out of the bunch are auto insurance, health insurance, life insurance, property insurance, income protection insurance etc. All these insurance policies have separate and distinct terms and conditions as per the risks. The insurance companies function on the ethic of pooling an amount by obtaining separate payments from multiple insured individuals as premiums and using that money to compensate for the loss of the few that may occur. Insurance had its inception long back in 2nd Millennium BC practiced by the Chinese and Babylonian traders and has grown up to be more refined and practical in the modern era.
The adverse social effects of insurance include an increment in fraudulence for monetary benefits which indirectly leads to an increase in potential losses. The Income Tax Regulatory and Development Authority, a department of the Indian Govt. specifically monitors and deals with all the issues in the insurance sector. Insurance has grown up to be one of the most adopted practices in today's world, but it should be kept in mind that being insured does not diminish the chances of risk in any way.

Working capital introduction

Working capital Introduction

•           Working capital typically means the firm’s holding of current or short-term assets such as cash, receivables, inventory and marketable securities.

•           These items are also referred to as circulating capital

Corporate executives devote a considerable amount of attention to the management of working capital

Definition of Working Capital

Working Capital refers to that part of the firm’s capital, which is required for financing short-term or current assets such a cash marketable securities, debtors and inventories.   Funds thus, invested in current assets keep revolving fast and are constantly converted into cash and this cash flow out again in exchange for other current assets.   Working Capital is also known as revolving or circulating capital or short-term capital.

Working capital investment

•           The size and nature of investment in current assets is a function of different factors such as type of products manufactured, the length of operating cycle, the sales level, inventory policies, unexpected demand and unanticipated delays in obtaining new inventories, credit policies and current assets.

FACTORS DETERMINING WORKING CAPITAL

1.     Nature of the Industry
2.     Demand of Industry
3.     Cash requirements
4.     Nature of the Business
5.     Manufacturing time
6.     Volume of Sales
7.     Terms of Purchase and Sales
8.     Inventory Turnover
9.     Business Turnover
10.    Business Cycle
11.    Current Assets requirements
12.    Production Cycle

13.     Credit control
14.     Inflation or Price level changes
15.     Profit planning and control
16.     Repayment ability
17.     Cash reserves
18.     Operation efficiency
19.     Change in Technology
20.     Firm’s finance and dividend policy
21.     Attitude towards Risk

MANAGEMENT OF CASH

1. Importance of Cash

                When planning the short or long-term funding requirements of a business, it is more important to forecast the likely cash requirements than to project profitability etc.          

                Bear in mind that more businesses fail for lack of cash than for want of profit.

2. Cash vs Profit

v   Sales and costs and, therefore, profits do not necessarily coincide with their associated cash inflows and outflows.

v   The net result is that cash receipts often lag cash payments and, whilst profits may be reported, the business may experience a short-term cash shortfall.

v      For this reason it is essential to forecast cash flows as well as project likely profits.

Insurance modulus

Insurance modulus are the main business of insurance companies. There are many companies giving such services in different ways.

There are many insurance policies that customers can choose from.

For example
Life insurance policy
Motor insurance policy
Mortgage Insurance policy
Etc

Some of companies now offers investment plans too. Most of insurance companies in sri Lanka they offer that facility.

Premiums can pay monthly, quarter, Simi annual or annually

Most of them promoting life insurance policy and motor insurance policies

But there are more insurance policies that they offer

Corporate Credit Appraisal

A corporate borrower is defined in different ways by different financial institutions. Generally the turnover level of  company and the size of the total assets will be taken in to account in identifying a 'corporate'

As you will observe a corporate is a bigger business entity and the business activities they carry out larger than retail or middle market clients. As the director's personal liability is limited only to the unpaid share.

My very first Blog post

Hi this is my very first Blog post for blogger. And I am Amila Sandaruwan I am from Sri Lanka. This is my personal blog and I hope to update my blog very day. With new interesting things much more.

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