Monday, June 7, 2010

RESUME : Entry - Level Experience Resume

RESUME : Entry - Level Experience Resume :



Objective
A position as human resources manager of a company with 1,200-plus employees.

Summary of Qualifications
Excellent human resources background, including: applicant screening; employee orientation, evaluation and placement; safety and training; and benefits planning. Experienced in developing and implementing new safety, training and employee orientation programs.

Work Experience
Human Resources Assistant, Allied Associates, Lakeview, KY(March 1994-current)
- Designed new employee orientation package and established and facilitated all new employee activities and sessions, which provides (for the first time) continuity in all company and benefit information presented verbally and in writing.
- Assist vice president in budget reconciliation and other forecasting/planning activities.
- Assisted in administering a revised employee evaluation program, which allows for improvement on identified problem areas before final evaluation.
- Prepare confidential material for grievance and other personnel-related meetings. Researched and currently implementing flex benefits program, which allows employees to design their own benefits packages, resulting in higher employee satisfaction.
- Training and Safety Assistant, McMurtry and Co., Lexington, KY(October 1992-March 1994)
- Worked with training manager to develop new, in-house computer software training courses, saving $3,500 annually in outside training costs.
- Assisted training manager in developing Secretarial Training Program, which has successfully standardized procedures and enhanced office work flow. - Revised safety manual and initiated OSHA update bulletins, which reduced on-the-job injuries by 55% and reduced OSHA non-compliance warnings by 75%.
- Assisted in evaluating and scheduling all outside executive training programs.

Personnel Assistant, McMurtry and Co., Lexington, KY(May 1990-October 1992)
- Administered temporary service personnel program, which involved 40% of the secretarial and hourly work force on site.
- Scheduled and screened full-time job applicants and coordinated applicant testing and pre-employment physicals.
- Established and administered service award program.
- Created job descriptions for hourly employees."

Education
B.S. in Business administration, RGPV , Bhopal(1990)

Friday, June 4, 2010

Stock Valuation

Preferred Stock Preferred stock is somewhat like a bond. They pay the same equal dividends forever.
Common Stock Common stock represents ownership in the company. Sometimes there are dividends, sometimes not.


What is the value of Preferred Stock?

This is easy. Preferred stock is basically a perpetuity.

What is the value of Common Stock?

This is not easy. This is a mess. Think about it. What is the value of a share of stock in a specific company? In one sense it is the price the stock trades at. Both the buyer and seller agree to exchange the stock at that price.

We assume that they are both rational people and both know something about the company and its future plans and profit potential. So, yes, that is one method: check the price of the stock in the paper or on the internet. But that's pretty darn easy. It's not really finance. It's more like reading. And I don't know if you realize this or not, but they don't give Nobel Prizes for reading. So there are other ways of doing stock valuation too.


The Gordon Growth Formula, also known as The Constant Growth Formula assumes that a company grows at a constant rate forever. This, by the way, is impossible. I mean, it can't grow forever. You know, if a company doubles in size every 5 years, pretty soon every single person in the world is their customer and then they can't grow at that rate anymore. (because the world population isn't doubling ever 5 years).

BUT, if we go ahead and assume that a company has a constant growth rate, we can use the following formula to get its value.

Constant Growth Formula Po = D 1 / ( Ks - G )

Po = Price
D1 = The next dividend. D1 = D0 (1 + G)
Ks = Rate of Return
G = Growth Rate
What is all this D1 and D0 stuff ?

D1 is the next dividend
D0 is the last dividend
Well we are assuming that the company has constant growth, right. So we take the last divided, multiply it by the growth rate and we can get the next dividend.

Example

Last years dividend = $ 1.00
Growth Rate = 5%
Rate of Return = 10%
First figure out D1.

D1 = D0 (1 + G)
D1 = $1.00 ( 1 + .05)
D1 = $1.00 (1.05)
D1 = $1.05
Next us the formula.

Po = D 1 / ( Ks - G )
Po = $1.05 / (10% - 5%)
Po = $1.05 / 5%
Po = $21.00
So, if we want to get a 10% rate of return on our money, and we assume that the company will grow forever at 5% per year, then we would be willing to pay $21.00 for this stock.

Bond Valuation

Bond When a company (or government) borrows money from the public or banks (bondholders) and agrees to pay it back later
Par Value The amount of money that the company borrows. Usually it is $1,000.
Coupon Payments This is like interest. The company makes regular payments to the bondholders, like every 6 months or every year.
Indenture The legal stuff. A written agreement between the company and the bond holder. They talk about how much the coupon payments will be, and when the money (par value) will be paid back to the bondholder.
Maturity Date Date when the company pays the par value back to the bondholder.
Market Interest Rate This changes everyday.

The thing about bonds is that the interest rate (coupon payments) is fixed. It doesn't change. And bonds last a long time. Like 10 years or whatever. So in the meantime, the market interest rate (the interest rates in general) go up and down. OK, well, if the coupon payments are for 10% and then the market interest rates fall from 10% to 8%, then that bond at 10% is valuable, right. It is paying 10% while the overall interest rate is only 8%. Exactly how much is it worth? You mean 'what is the present value of a bond?'

The Present Value of a Bond = The Present Value of the Coupon Payments (an annuity) + The Present Value of the Par Value (time value of money)

Example

Par Value = $ 1,000
Maturity Date is in 5 years
Annual Coupon Payments of $100, which is 10%
Market Interest rate of 8%
The Present Value of the Coupon Payments (an annuity) = $399.27

The Present Value of the Par Value (time value of money) =$680.58

The Present Value of a Bond = $ 399.27 + $ 680.58 = $1,079.86

Kinds of Interest Rates

Let's say I give you a credit card and the interest rate on the card is 3% per month. What is the annual rate that you are actually charged?? 36%?? Well, no. It's actually 42.57%.

Nominal Rate Nominal means "in name only". This is sometimes called the quoted rate.
Periodic Rate The amount of interest you are charged each period, like every month.
Effective Annual Rate The rate that you actually get charged on an annual basis. Remember you are paying interest on interest.

In the example
The Nominal Rate is 36%.
The Periodic Rate is 3% (you are charged 3% interest on your balance every month)
The Effective Annual Rate is 42.57%
Nominal Rate = Periodic Rate X Number of Compounding Periods
Effective Annual Rate = (1+ i / m)m -1


m = the number of compounding periods
i = the nominal interest rate
O.K., so let's try the example again.

Effective Annual Rate = (1+ i / m)m -1
Effective Annual Rate = ( 1 + .36 / 12 )12 -1
Effective Annual Rate = (1.03)12 - 1
Effective Annual Rate = (1.4257) -1
Effective Annual Rate = .4257
Effective Annual Rate = 42.57 %

Perpetuities

Perpetuities - are equal payments made regularly, like every month or every year, that go on forever.

You are rich. (Yes, but are you really happy?) You want to start the YOUR NAME HERE Scholarship at your university. Every year, some student will receive a $1000 scholarship. You're paying for it. Even after you, your kids and your grandkids are dead, you are still paying for it. Forever.

The question is....How much money will it cost you. In today's dollars. What is the present value of this perpetuity. (Hint: starting now and going on forever and ever, you assume the interest rate at your bank is going to be 3%).
PV (of a perpetuity) = payment / interest rate


Every year the interest you earn is used to pay for the scholarship. The principal in your bank account doesn't really change year to year.

PV (of a perpetuity) = payment / interest rate
PV = $ 1000 / .03
PV = $ 33,333
So, you put $ 33,333 into the bank. Each year the money earns $1000 interest. That interest becomes the scholarship.

The Time Value of Money

Present Value How much you got now.
Future Value How much what you got now grows to when compounded at a given rate

I give you 100 dollars. You take it to the bank. They will give you 10% interest per year for 2 year.

The Present Value = $ 100
Future Value = $121.
FV= PV (1 + i )N

FV = Future Value
PV = Present Value
i = the interest rate per period
n= the number of compounding periods

Understanding Basic Finance Terms

If you are like many, you don't always understand what people are talking about when it comes to loans. Without understanding the basic terminology when it comes to loans you just aren't setting yourself up right to make an educated decision when it comes to applying for a loan. There are hundreds of terms; Below are some of the most important:

Assets

Assets can be described as anything that holds value. Assets can be all types of things from cars to houses. Assets can be used in helping to build credit. For example if you are applying for a house loan, you might use your car as an asset, to show that if you default on a payment, that you have assets to fall back upon such as your car.

Capital

Capital can be a bit of tricky term as it can be used in several different situations to do with finances. Capital can be described as the assets that are available for use towards creating further assets; it can also apply to the cash in reserve, savings, property, or goods.

Debt

Debt is amount of money or something of value that is borrowed from a person referred to as a debtor. Usually a debt that is borrowed will carry some type of penalty along with the payback such as an interest, or service.

Debt Consolidation

Debt Consolidation is replacing multiple loans with a single loan that is normally secured on property. This can often reduce your (the borrowers) monthly outgoing interest payments by paying only one loan which is secured on the property sometimes over a longer term. Because the loan is secured, the interest rate will generally be considerably lower.

Equity

Equity is the difference between the value of a product (for example a house) and the amount that is owed on it.

Liabilities

Liabilities refers to the sum of all outstanding debts in which a company or individual owes to it's debtors.

Principal

Principal is used to describe the amount of money that is borrowed without including any interest or additional fee's.

Term

Term refers to the length of a debt agreement. For example if you were to take out a loan for a house over 10 years. 10 years would be the term.

*Glossary of Financial Terms*

List of Terms Definition
Bonds
A certificate of debt issued to raise funds. Bonds typically pay a fixed rate of interest and are repayable at a fixed date.

Capital Budgeting
The process of managing capital assets and planning future expenditure on capital assets.

Capital Investments
Funds invested by a business in its capital assets that are anticipated to be used before being replaced. Capital investments are generally significant business expenses, requiring long-term planning and financing.

Current Assets
A balance sheet item, current assets are those items owned by the firm with the intention to generate profits or other assets that can be converted to cash within one year. It includes cash, account receivables, inventory, cash equivalents and other cash equivalents.

Convertible Loans
A loan with a provision allowing it to be converted to equity within a specific time frame.

Convertible Preference Shares
Preference equity shares issued by a business that include a provision allowing them to be converted to ordinary equity shares after a specific time frame.

Creditors or Accounts Payable
Suppliers the company owes money to, usually for services or goods supplied.

Creditors' Turnover Rate
A short-term liquidity measure used to quantify the rate at which a business pays off its suppliers.


Debt Financing Debtors or Accounts Receivable
The money that you borrow to finance a business. Customers who owe the company money, usually for services or goods supplied.

Debtors' Turnnover Rate

A short-term liquidity measure used to quantify the rate at which a business receives payment from customers.

Default Risk or Risk of Default
The risk of loss due to non-payment by the borrower.

EBITDA
The earnings before interest, taxes, depreciation and amortization. It is the net cash inflow from operating activities, before working capital requirements are taken into account.

EBITDA Margin
A measure of operating performance. It is calculated by dividing EBITDA by sales and is usually expressed as a percentage.


Equity Financing
The issuance of ordinary shares to raise money for a business.

Factoring
Selling the interest in the accounts receivable or invoices to a financial institution at a small discount. It is sometimes called "accounts receivable financing". Factoring helps a company speeds up its cash flow so that it can more readily pay its current obligations and grow.


Fixed Assets

Fixed assets are those long-term tangible assets that the business has acquired for use to earn income over more than one year. These assets normally must have a useful life over a few years and not expected to be converted to cash in the current financial year. Examples include, factory, warehouse, equipment, fixtures and etc.


Initial Public Offering (IPO)
The sale of a company's shares to the public on a stock exchange for the first time.


Interest Coverage Ratio
An indication of the ability of a business to cover interest expenses with its income. It is calculated by dividing income before interest and taxes by interest paid.


Letter of Credit
A written undertaking by a bank, given to a seller at the request and on the instruction of the buyer, to pay up, at sight or at a future date, up to a stated sum of money within a prescribed time limit.


Trust Receipt
A financing facility for imports where a bank makes an advance to the buyer to settle an import sight bill. The advance is generally for a certain period. On the due date, the buyer is required to settle the bill with interest at an agreed rate.


Profit Margin
A measure of a company's profitability. It is calculated by dividing net profit by sales and is usually expressed as a percentage.


Return on Equity (ROE)
A measure of the return on each dollar of shareholder investment. It is calculated by dividing net profit by equity and is usually expressed as a percentage.

Stock Turnover
A measure of inventory performance to show how fast stock is converted from purchases to sales. It is calculated by dividing stock level by cost of sales x 365 days


Term Loan
A loan for a fixed period of more than one year and repayable by regular installments.

Thursday, June 3, 2010

Some Simple yet important terms

written down value (WDV)
Net book value of an asset computed by deducting the accumulated depreciation or amortization from the value shown in the account books (the book value).

Operating Expense or "OPEX"
A category of expenditure that a business incurs as a result of performing its normal business operations.For example, the payment of employees' wages and funds allocated toward research and development are operating expenses.

Operating Revenue
Income derived from sources related to a company's everyday business operations. For example, in the case of a retail business, inventory sales generate operating revenue, whereas the sale of a warehouse does not. Instead, the latter sale is considered to be an unexpected, or "one-time", event.
Also referred to as "regular revenue".

Operating Profit
The profit earned from a firm's normal core business operations. This value does not include any profit earned from the firm's investments.
Also known as "earnings before interest and tax" (EBIT).

Calculated as:
Operating Profit = Operating Revenue - Operating Expense


Substance over form:

When an entity practice the Substance Over Form, it means that the financial statements reflect the financial reality of the entity (Substance) rather than the legal form of the transactions and events(Form) which underlie them.To put it very simply: if it is a goat but it was disguised in a legal form to look like a dog, Substance Over Form would prevail to reinstate that it is a goat and not a dog!

To be able to differentiate Substance Over Form, we need to be vigilant, have very good inner knowledge of the company’s operation and takes a more investigative in-depth approach so as to seek further evidence or proof. This is because normally these types of events or transactions are often quite complex. These events or transactions happen just around the accounting year ended. (balance sheet date)

We have seen many cases whereby many accounting fraud occur as a result of this lack of Substance Over Form.

Cases like Enron and Computer Associate are describe below:

Examples:Exchanging revenue/revenue swap:

In the Computer Associate case, the CEO of the company swap or exchange revenue with another company. What it did was CSA purchased a certain software/service from the company A and in turn company A also purchased from CSA. Its look like a sale and it being recognized as revenues in the Income Statement

In the Enron’s case we have:

Enron group’s use of over 3000 Special Purpose Entities (SPEs) structured in such a way as to enable the company to avoid including extensive debt in the consolidated financial statements of the group.

Other examples like:-
Company itself fund its own revenue

An outright purchase of capital equipment, whereas in fact the substance of the transactions is a lease of (or perhaps an option to purchase) the equipment.

Accrued and deffered cost:-

Accrued costs are costs for services or materials received, but for which payment has not been made. Example - you order 1600 cubic yards of concrete. It is delivered to your site in 16 weekly increments of 100 cubic yards. You receive a bill at the end of the 16 weeks. The accrued cost reflects the cost of concrete delivered in a reporting period prior to receiving the bill. This is money that should be set aside (and costs to balance against earned value for the material).

Deferred cost are for services or materials not yet received, but for which payment has been made. Example - you purchase a plane ticket 6 weeks before a planned trip. The cost is incurred, but reporting may be deferred until the trip is made and value is earned.

Difference b/w prepaid and deffered expenses:-

prepaid expenses are those which we pay in advance! like rent of a building , its a prepaid expense . we first pay the rent and then use the building whenever we need.
deffered expenses are those which have been accumulated and are not paid yet. for example if we do not pay the rent of the building for 5 months , so it has been deffered means accumulated!

A prepaid expense usually relates to a specific time frame, like pre-paying rent as mentioned above. Whereas a deferred expense may not have a specific time frame in which to be recognized. It might even be a partial expense which will continue to increase (whether actually paid or not) until the time comes when it will be amortized. An example might be costs associated with the acquisution of a business or product line. Those costs might continue to accrue as deferred expenses for months (or longer) until the transaction is complete and revenues begin to flow.

Gross and Net

Gross is the profit from the transaction without deduction. Net is the profit from the transaction after deducting cost of goods and cost of the sale (manpower, taxes, rent, etc.)