SPONTANEOUS LABILITIES

SPONTANEOUS LIABILITIES

Definition:
The liabilities which are genrated due to day by day opration of the business is called spontaneous liabilities.
Example:
Rent payable, wages payable, salary payable
how become that are short trem because the company can use its money before given.

a) Credit Trade:
The purchasing and selling of goods on credit is called credit trade.
Example:
suppose puchase material
Month                          A/C payable                    Cash                      Balance
jan                                60000                             0                               60000
feb                                50000                            60000                         50000
march                            100000                          40000                       110000

the major benifit of this company don't have to pay the interest rate on that amount.

Credit Terms

COD = cash on delivery
its not in short term because the cash paid on delivery and can not use in business

CBD = cash before delivery
its  not in short term because company paid in advanced and can not get benifit of that money.

Credit Period:
its in short term because the money can be use in business before paid.

Season dating:

The company purchased the product in the start of the season and payment are made at the end of the season.

b) Accured Expense:
The liabilities or expenses which is owed by the business is called accured expense
Example:
wages payable



FINANCIAL MANAGEMENT
DECISION AREA OF FINANCIAL MANAGEMENT
AGENCY PROBLEM
TYPES OF BUSINESS
FINANCIAL SYSTEM
FINANCIAL INTERMEDIARIES
TYPES OF FINANCIAL MARKETS
TIME VALUE OF MONEY
EXAMPLES AND FORMULA TIME VALUE OF MONEY
CASH FLOW,SUM,SERIES OF CASH, ANNUITY AND MIX STREAM
ANNUITY TYPES AND FORMULA
AMORTIZATION SCHEDULE OR TABLE WITH EXAMPLE
EFFECTIVE INTEREST RATE WITH EXAMPLE
VALUATION OF LONG TERM SECURITIES (BONDS)
TYPES OF BONDS
BONDS FORMULA,ZERO COUPON PERPETUAL
VALUATION OF LONG TERM SECURITIES (SHARE)
CASH AND MARKETABLE SECURITIES MANAGEMENT
MANAGING CASH INFLOW AND OUTFLOW
SECURITIES MANAGEMENT
SHORT TERM FINANCING
SPONTANEOUS LABILITIES
NEGOTIATED FINANCE
CAPITAL BUDGETING
CAPITAL BUDGETING TECHNIQUE
NET PRESENT VALUE TECHNIQUE
INTERNAL RATE OF RETURN TECHNIQUE
ACCOUNT RECEIVABLE MANAGEMENT
INVENTORY MANAGEMENT
FORCASTING

MBA NOTES FINANCIAL MANAGEMENT