Definition: Capital rationing is a financial approach applied by the organizations to pick the utmost profitable projects out of all the investment opportunities available. It enables the organizations to determine an optimal capital budgeting and adequate capital expenditure, in the long run. This a useful practice since the organizations usually have limited availability … [Read more...] about Capital Rationing
Staggered Board
Definition: Staggered Board or classified Board is a board which consist of different classes of the directors for different terms or time period, as the election is conducted at a different point so that all the director’s term will not expire at the same time. In general, there are three classes of directors whose tenure and responsibilities are decided by the company. The … [Read more...] about Staggered Board
Differential Pricing
Definition: Differential pricing, also known as dual pricing is a two-price system or segmented price system in which the seller charges different prices for the same product for different buyers. With respect to demand and supply in the market, this system sets us a free market system. The basic concept of this system is that it is a fluctuating price system, i.e., some … [Read more...] about Differential Pricing
Marketing Research
Definition: Marketing research is a system of identifying and analyzing the information related to the techniques and problems of marketing. It is a study of the market such as consumer, buyer and seller’s behaviour about the prices, their purchasing power, brand loyalty and many other marketing activities. It helps the marketers in determining the contribution of various … [Read more...] about Marketing Research
Departmental Accounting
Definition: Departmental accounting is an accounting system used by organizations to manage the accounts of their various departments in separate books, i.e., for every department separate trial balance and profit and loss account is prepared, and at the end of the year balances of each department gets transferred to general profit and loss account, prepared to find out the … [Read more...] about Departmental Accounting
Bridge Loan
Definition: Bridge loan is a short-term financing facility provided by the financial institutions to the individuals or the company in case of immediate cash requirement before a long-term or regular loan is approved by the bank. However, whenever the regular loan gets approved, this bridge loan amount must be repaid to the bank along with the interest amount for the time it … [Read more...] about Bridge Loan
Induction Training
Definition: Induction training implies providing training to the newly recruited employees in the organization so that they will act as a productive asset for them. These training programmes are conducted by the companies according to the complexity level of the work allotted to the employees and the size of the business. The time period of such training programmes also … [Read more...] about Induction Training
Sunk Cost
Definition: Sunk cost is the cost that has already been aroused in the past and cannot be recovered at any cost. Thus it is also known as historical cost. It is the written down value of the plant after reducing the reclaim value of the plant. However, this cost is not relevant for making the decisions as it has already been incurred and cannot be refrained by taking decisions … [Read more...] about Sunk Cost
Internal Control
Definition: Internal Control system is the arrangement of controls by the enterprise in the interest of the business of the organization in an organized and productive manner. It ensures obedience to management policies, protect assets and ensure the integrity and efficiency of the records as far as possible. The specific components or elements of an Internal control system … [Read more...] about Internal Control
Inventory Valuation
Definition: Inventory valuation or stock valuation is the method of identifying the actual value of the inventories at the end of the year. The foremost step of valuation is to ascertain the physical inventories of the company, i.e., raw material, work in progress goods, and finished goods. The main objective behind the valuation of inventory is to determine the true income … [Read more...] about Inventory Valuation