Udaya Raj Adhikari's Blog

Introduction    The supply of money is a stock at a particular point of time, though it conveys the idea of a flow over time. The term ‘ the supply of money’ is synonymous with such terms as ‘ money stock’, ‘stock of money’, ‘money supply’ and ‘quantity of money’ . The supply of money at any moment is the total amount of money in the economy . There are three alternative views regarding the definition or measures of money supply. ·          The most common view is associated with the traditional and Keynesian thinking which stresses the medium of exchange function of money. Forms of MS M1 = C + DD    (Demand Deposit) M2= M1 +TD (Time Deposit) M3= M2 + Liabilities of NBAFI Determinant of MS 1. High powered Money (H= C + R), (M = C + D) The H Theory of Money Supply’. However, it is more popularly called ‘Money-multiplier Theory of Money Supply’ because it explains the determination of money supply as ...

Impact of the corporate life cycle on a company’s cash flows  All the product go through a series of phases called the product life cycle .The phases are :introductory phase , growth phase , maturity phase and decline phase .The introductory phase occurs at the beginning of a company’s life, when it is purchasing fixed assets and beginning to produce and sell products. During the growth phase, the company is striving to expand its production and sales. In the maturity phase, sales and production level off. During the decline phase, sales of the product fall due to weakening in consumer demand. As in the following diagram, the phase a company is in effects its cash flows.   In the first phase, we expect that the company will not be generating positive cash from operations. That is, cash used in operations will exceed cash generated by operations in the introductory phase .Also; the company will be spending considerable amounts to purchase productive assets such as b...

Funds flow statement Vs Cash flow statement The differences are as follows: Funds flow statement Cash flow statement 1. It is based on accrual accounting system. 1. While preparation of this statement, all transaction effecting the cash and cash equivalents are taken into consideration. 2. It analysis the sources and application of funds of long-term nature and net increase or decrease in long term funds will be reflected on working capital of the firm, 2. It considers only the increase or decrease in current assets and current liabilities in calculating the cash flow from operations. 3. More useful in long range planning. 3. More useful for identifying and correcting the current liquidity problems of the firm. 4.Sound fund position does not necessarily mean sound cash operation 4. Sound cash operation is always followed by sound fund position. 5. It shows the funds generated a...

Reason behind the difference between net income and cash from operating activities Cash flow statement is a part of a set of financial statement and prepared along with balance sheet and income statement to report the cash inflow and outflow within the organization in an accounting period. Cash flow is of vital importance to the health of a business. One saying is: “revenue is vanity, cash flow is sanity, but cash is king”. What this means is that whilst it may look better to have large inflows of revenue from sales, the most important focus for a business is cash flow. Net income can be expressed in following equation. Net income= Revenue – Expenditure When there is high net income in given current year refers to high amount of profit of the organization. On the other hand, Cash flow from operating activities= Ending cash balance - Cash flow from investing  activities - Cash flow from financing activities When there is the result of excess of operating cash ...

As a manager, you probably fulfill many different roles every day. For instance, as well as leading your team, you might find yourself resolving a conflict, negotiating new contracts, representing your department at a board meeting, or approving a request for a new computer system. Henry Mintzberg argued that there are ten primary roles or behaviors that can be used to categorize a manager's different functions. In this article we'll examine these roles, and we'll see how you can use your understanding of them to improve your management skills. The Roles Mintzberg published his Ten Management Roles in his book, "Mintzberg on Management: Inside our Strange World of Organizations," in 1990. The ten roles are:( FLL - MDS -   EDRN ) 1.      Figurehead. 2.      Leader. 3.      Liaison. 4.      Monitor. 5.      Disseminator. 6.      Spokesperson. 7...

In inventory management, demand of inventory can be classified into two parts. They are independent and dependent demand.Independent demand is the demand of final products which are not inter-related with each other. It is generally created by outsiders like consumers, suppliers and other companies. It is unknown. In order to determine the quantities of independent demand, varieties of techniques like customer survey, trend analysis, forecasting models etc. can be used. Dependent demand is directly related to the demand of another parts and components of products or product itself. It is relatively straight forward computational. It means, stock can be easily computed on the basis of the stock needed at upper level. For example , if an auto mobile company plans to produce 50 cars per month, then obviously it will need 200 wheels and tires. The demand for wheels and tires is dependent demand, where as the demand of cars is independent demand which will not be a part of another ...

Production and productivity are similar but there is a vast difference between them. Exactly said, production is the conversion of input into the output where as productivity is the ratio between output and input. It shows the functional relationship between final products and their ingredients. Productivity =output/input                                                                                                               Productivity is a measure of output from a production process, per unit of input. For example, labor productivity is typically measured as a ratio of output per labor, an input. Productivity may be conceived of as a metric of the technical or engineering ef...