1.

What is Holding Co. & Subsidiary co

A. company which controls another company is known as the holding company and the company so controlled is termed as subsidiary company. Section 4 of the companies act 1956 provides that a holding company is one if it (1) Controls the composition of board of directors of another company; or (2) Holds more than half of the nominal value of equity share capital of another company; or (3) Is a subsidiary of any company which is in turn a subsidiary of another company An example will illustrate the point. Company B is a subsidiary of company A, and company C is a subsidiary of company B. Company C will be a subsidiary of company A. A subsidiary company cannot hold shares or be a member of its holding company except as a legal representative of a deceased member of the holding company or any trustee. [Link]

2. Differences b/w Public & Private company

Privately-held companies are - no surprise here - privately held. This means that, in most cases, the company is owned by the company's founders, management or a group of private investors. A public company, on the other hand, is a company that has sold a portion of itself to the public via aninitial public offering of some of its stock, meaning shareholders have claim to part of the company's assets and profits. One of the biggest differences between the two types of companies deals with public disclosure. If it's a public U.S. company, which means it is trading on a U.S. stock exchange, it is typically required to file quarterly earnings reports (among other things) with the Securities and Exchange Commission (SEC). This information is also made available to shareholders and the public. Private companies, however, are not required to disclose their financial information to anyone since they do not trade stock on a stock exchange. The main advantage public companies have is their ability to tap the financial markets by selling stock (equity) or bonds (debt) to raise capital(i.e. cash) for expansion and projects. The main advantage to private companies is that management doesn't have to answer to stockholders and isn't required to file disclosure statements with the SEC. However, a private company can't dip into the public capital markets and must therefore turn to private funding, which can boost the cost of capital and may limit expansion. It has been said often that private companies seek to minimize the tax bite, while public companies seek to increase profits for shareholders. The popular misconception is that privately-held companies are small and of little interest. In fact, there are many big-name companies that are also privately held - check out the [Link] list of the

largest private companies in 2006.

3. what is NPV & IRR method of capital budgeting [Link]

4. IPO
Large amounts of capital have been raised in recent years by small companies that went public. Initial public offerings (IPOs) have made instant billionaires of entrepreneurs such as Yahoo's Jerry Yang and [Link]'s Mark Cuban. These IPOs flooded the coffers of the companies with millions, if not billions, of dollars. Going public isn't for every company, however. The ideal candidate for an IPO has both a wellestablished track record of steadily growing sales and earnings, and operates in an industry that's currently in the news. You may be able to go public if you have a whole lot of one of these characteristics and not much of the other--for instance, little earnings but lots of public interest characterized many internet-related IPOs during the dotcom boom. The stringent requirements for IPOs leave out most companies, including those that don't have audited financials for the past several years, as well as those that operate in slow-growing or obscure industries such as car washes and paper clip manufacturing. And IPOs take lots of time. You'll need to add outside directors to your board and clean up the terms of any sweetheart deals with managers, family or board members as well as have a major accounting firm audit your operations for several years before going public. In other words, if you need money to grow today, an IPO isn't going to provide it. An IPO is also probably the most expensive way to raise money in terms of the amounts you have to lay out upfront. The bills for accountants, lawyers, printing and miscellaneous fees for even a modest IPO will easily reach six figures. For this reason, IPOs are best used to raise amounts at least equal to millions of dollars in equity capital.

5. What is Semi variable cost examples A cost composed of a mixture of fixed and variable components. Costs are fixed for a set level of production or consumption, becoming variable after the level is exceeded.
Also known as a "semi-fixed cost." This type of cost is variable in the sense that greater levels of production increase total cost. If no production occurs, then a fixed cost is still incurred.

Labor costs in a factory are semi-variable. The fixed portion is the wage paid to workers for their regular hours. The variable portion is the overtime pay they receive when they exceed their regular hours.

6. What is EPS (Earnings Price Ratio) A valuation ratio of a company's current share price compared to its pershare earnings.
Calculated as: Market Value per Share Earnings per Share (EPS)

For example, if a company is currently trading at $43 a share and earnings over the last 12 months were $1.95 per share, the P/E ratio for the stock would be 22.05 ($43/$1.95). EPS is usually from the last four quarters (trailing P/E), but sometimes it can be taken from the estimates of earnings expected in the next four quarters (projected or forward P/E). A third variation uses the sum of the last two actual quarters and the estimates of the next two quarters. Also sometimes known as "price multiple" or "earnings multiple."

7. Accounting principles [Link]

8.

Definition of 'Minority Interest'

1. A significant but non-controlling ownership of less than 50% of a company's voting shares by either an investor or another company. 2. A non-current liability that can be found on a parent company's balance

sheet that represents the proportion of its subsidiaries owned by minority shareholders.
9. What is Accrual & Business Entity concept
Accural--->>>> Business transactions are recorded when they occur and not when the related payments are received or made. This concept is called accrual basis of accounting and it is fundamental to the usefulness of financial accounting information.

Business-of a business entity are to be accounted for separately from its owners. The business entity is therefore considered to be distinct from its owners for the purpose of accounting.

10. What is Capital expenditure

Funds used by a company to acquire or upgrade physical assets such as property, industrial buildings or equipment. This type of outlay is made by companies to maintain or increase the scope of their operations. These expenditures can include everything from repairing a roof to building a brand new factory.

11. What is BEP and its formula

Break-even is the point of zero loss or profit. At break-even point, the revenues of the business are equal its total costs and its contribution margin equals its total fixed costs. Break-even point can be calculated by equation method, contribution method or graphical method. The equation method is based on the cost-volume-profit (CVP) formula: px = vx + FC + Profit

Where, p is the price per unit, x is the number of units, v is variable cost per unit and FC is total fixed cost.

12. What is Operating Cycle

The operating cycle is the amount of time it takes for a company to turn cash used to purchase inventory into cash once again. This number is calculated by adding the age of inventory (the number of days that inventory is held prior to sale) with the collection period (the number of days required to collect receivables). A company with a short operating cycle is able to quickly recover its investment. A company with a long operating cycle will have less cash available to meet any short-term needs, which can result in increased borrowing and interest expense.

13. Who is a proxy 1. An agent legally authorized to act on behalf of another [Link] not attending a company's annual meeting may choose to vote their shares by proxy by allowing someone else to cast votes on their behalf.

2. A formal power of attorney document that may be signed by a shareholder to authorize another shareholder, a representative of the shareholder or the company's management, to vote on behalf of the shareholder at the annual meeting. Proxy statements must be filed with regulatory authorities (the Securities and Exchange Commission in the U.S.) on an annual basis prior to the company's annual meeting. Proxy documents are meant to provide shareholders with the information necessary to make informed votes on issues important to the company's performance. A proxy is known to offer shareholders and prospective investors tremendous insight into a company's governance as well as a glance at the way that a company's management operates.

PERPETUAL SUCESSION:
Continuation of an incorporated firm's existence, unaffected by the death of any of its owner(s) or the transfer of its shares to a new entity.

In company law, perpetual succession is the continuation of a corporation's or other organization's existence despite the death, bankruptcy, insanity, change in membership or an exit from the business of any owner or member, or any transfer of stock,etc. Perpetual succession, along with the common seal, is one of the factors explaining a corporation's legal existence as separate from those of its owners. This principle states that any change in membership of a company does not anyway affect the status of the company, death,insolvency,insanity etc. of any member of a company does not affect the continuity of the [Link] the life of the company does not depend upon the life of its members.

 it shall continue forever irrespective of continuity of its members or [Link] in case of winding up or liquidation of a company.

14. What is time value of money

The idea that money available at the present time is worth more than the same amount in the future due to its potential earning capacity. This core principle of finance holds that, provided money can earn interest, any amount of money is worth more the sooner it is received.

15. What is GDR & ADR

Companies are permitted to raise foreign currency resources through two main sources: a) issue of foreign currency convertible bonds more commonly known as Euro issues and b) issue of ordinary shares through depository receipts namely Global Depository Receipts (GDRs)/American Depository Receipts (ADRs) to foreign investors i.e. to the institutional investors or individual investors.

An American Depositary Receipt ("ADR") is a physical certificate evidencing ownership of American Depositary Shares ("ADSs"). The term is often used to refer to the ADSs themselves.

16. What is Costing

System of computing cost of production or of running a business, by allocating expenditure to various stages of production or to different operations of a firm.

17. What is Absorption Costing

A managerial accounting cost method of expensing all costs associated with manufacturing a particular product. Absorption costing uses the total direct costs and overhead costs associated with manufacturing a product as the cost base. Generally accepted accounting principles (GAAP) require absorption costing for external reporting. Absorption costing is also known as "full absorption costing".

18. What is Marginal Costing

The change in total cost that comes from making or producing one additional item. The purpose of analyzing marginal cost is to determine at what point an organization can achieve economies of scale. The calculation is most often used among manufacturers as a means of isolating an optimum production level.

19. What do u know about SEBI

The regulatory body for the investment market in India. The purpose of this board is to maintain stable and efficient markets by creating and enforcing regulations in the marketplace.

20. What is Mutual Fund

An investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets. Mutual funds are operated by money managers, who invest the fund's capital and attempt to produce capital gains and income for the fund's investors. A mutual fund's portfolio is structured and maintained to match the investment objectives stated in its prospectus.

21. What is Demat A/c

In India, shares and securities are held electronically in a Dematerialized (or "Demat") (/dimt/;) account, instead of the investor taking physical possession of certificates. A Dematerialized account is opened by the investor while registering with an investment broker (or sub-broker). The Dematerialized account number is quoted for all transactions to enable electronic settlements of trades to take place. Every shareholder will have a Dematerialized account for the purpose of transacting shares. Access to the Dematerialized account requires an internet password and a transaction password. Transfers or purchases of securities can then be initiated. Purchases and sales of securities on the Dematerialized account are automatically made once transactions are confirmed and completed.

22. What is the difference b/w Equity fund & Debt fund

23. What is the difference b/w Primary Market & Secondary Market

Primary Market Vs Secondary Market in Tabular Form:

Primary Market Secondary Market Securities are traded after being listed in Stock Exchanges

Securities are issued for the first time

The price of securities is determined by the company The company has no control over the price of the securities The price of the securities is fixed on The price is fluctuating on the basis of the basis of companys past fundamental, cost of the shares, performance and future prospectus volume, etc.

Securities can be bought only at the time of Initial Public Offer (IPO) Securities can be bought or sold any time