Ismlamic banking theory verses practice. Case study of Iran Pakistan Essay

Ismlamic banking hypothesis stanzas practice. Contextual investigation of Iran Pakistan and UK - Essay Example A portion of the Quranic refrains (Yusuf Ali, 2000) with respect to these perspectives have been referenced underneath to expand the need and terrorizing towards the Islamic money related framework. â€Å"To those of feeble understanding make not over your property, which God hath made a methods for help for you.†¦?† (Yusuf Ali, 4:5, 2000). Private proprietorship is attested, yet in addition, saw as a trust, â€Å"Believe in God and His Apostle, and spend (in good cause) out of the substance whereof He has made you Heirs†¦Ã¢â‚¬  (Yusuf Ali, 57:7, 2000). Islam urges undertaking or endeavors to make riches, which is described as God’s abundance, â€Å"And when the Prayer is done, at that point may ye scatter through the land and look for the Bounty of God†¦Ã¢â‚¬  (Yusuf Ali, 62:10, 2000). Muslims are committed to satisfy agreements and stay faithful to their obligations, â€Å"O ye who accept! Satisfy all obligations....† (Yusuf Ali, 5:1, 2000). â€Å"†¦And satisfy (each) commitment, for (each) commitment will be enquired into (on the Day of Reckoning)†¦Ã¢â‚¬  (Yusuf Ali, 17:34, 2000). All trade ought to be made with the willing assent of the gatherings concerned, â€Å"O ye who accept! Eat up not your property among yourselves in vanities: yet let there be among you traffic and exchange by common great will.†¦Ã¢â‚¬  (Yusuf Ali, 4:29, 2000). The utilization of riches and the activity of the opportunity of big business are compelled by the commitment not to hurt others, however this must likewise be found in the viewpoint of the positive commitment to think about others and offer with them (Siddiqi, pp. 11-19, 2001). This is represented by the notable obligation to pay the zakat or poor assessment. Notwithstanding, that isn't all: the significant thing is the soul of agreeable, accommodating conduct as ordered by the Islamic perspective on life as a test, â€Å"He who made Death and Life, that He may attem pt which of you is best in deed† (Yusuf Ali, 67:2, 2000). These writings from the Quran (Yusuf Ali, pp. 1-576, 2000) are the significant wellsprings of direction for all the frameworks that Muslims

International Financial Reporting Essay Example | Topics and Well Written Essays - 3250 words

Worldwide Financial Reporting - Essay Example In addition, so as to clarify the idea, certain models have been examined for a theoretical association - Noka. IAS 16 arrangements with acknowledgment of property, plant and gear; and their devaluation charge count. It likewise gives direction on the most proficient method to decide the conveying estimation of these benefits and the treatment during removal of these fixed resources. So as to encourage the clients in perusing budget summaries, IAS 16 normalizes the acknowledgment, estimation, revaluation, deterioration and de-acknowledgment of property, plant and hardware; and gives direction on bookkeeping medications. The standard gives adaptability to associations regarding ensuing estimation of estimation of the fixed resource. In this way, it can either be expressed at unique cost (less impedance and deterioration), or can be revalued to express its reasonable worth (the present market esteem). The association must express the technique used to gauge the benefit in the exposure segment of the budget summaries. This would help clients in deciding if the first expense is utilized to esteem the advantage or if the market esteem is utilized to give a reasonable worth closer to the present market esteem. ... The association must express the strategy used to gauge the benefit in the revelation area of the fiscal reports. This would help clients in deciding if the first expense is utilized to esteem the benefit or if the market esteem is utilized to give a reasonable worth closer to the present market esteem. In any case, so as to guarantee the clients that revaluation was done appropriately, expansion revelations are required including date of revaluation, technique used to revalue, if autonomous valuer was included, and so on. The ramifications of conveying esteem is huge. This is on the grounds that by and large, associations would select to bring about extra costs of revaluing the benefit just on the off chance that they are sure that revaluation will help with expanding the conveying estimation of the advantage. This legitimately impacts the asset report. Devaluation The devaluation is the charge on utilization of the advantage; and is treated as a non-money cost. Toward the year's end, deterioration is charged to the pay explanation of the association. IAS 16 necessitates that associations utilize a devaluation technique steady to the helpful existence of the advantage (the period wherein monetary advantages can be acquired from the benefit). The strategy used to figure deterioration may fluctuate. What's more, associations are permitted to change the devaluation technique however it must be recorded under revelation segment alongside purposes behind the change. The suggestions might be huge. In the event that diminishing equalization strategy for devaluation is utilized, the organization will have the option to deteriorate the benefit quicker in the first place instead of straight line devaluation that requires same devaluation charge for the whole valuable existence of the advantage. De-acknowledgment or

Importance of Path Dependence in Management Essay

Significance of Path Dependence in Management - Essay Example The solid ramifications is that on-screen characters in a specific procedure become secured systems that are themselves a result of authentic possibilities. This point of view holds that wonders are unpredictable, and, subsequently, an aftereffect of commonly connecting factors which produce non-straight elements and input circles. The unpredictability of the talk on hierarchical change and development has just expanded. This is occasioned by two disparate perspectives. The primary view holds that new and progressively adaptable or liquid authoritative structures are on request while the subsequent view holds the faith in hierarchical inactivity and the authentic need of dynamic (Garud, Arun, and Peter, 2009:760). These two perspectives have gone up against directors who need to adjust between new thoughts and customs of an association or an industry. This is for the most part affected in ideas, for example, pioneering attitude where on-screen characters are progressively determined by the rationale of control which drives them to successfully actualise complex procedures. This has made way reliance basic to supervisors as they battle to comprehend the fundamental elements basic most authoritative procedures and past triumphs while connecting them with the real factors existing apart from everything else to imp rove food of a hierarchical exhibition and adequacy (Coombs and Hull, 1997:1-26). For a situation investigation of Toyota creation framework (TPS), the viewpoint of progress as a way reliance wonder advances the significance of this idea in the board (Driel and Dolfsma, 2009:67). In the first place, TPS made lock-in components well before the improvement of an appropriate instrument including relative rivalry. The contenders had the option to duplicate a portion of the TPS models with exactness and make extensive rivalry. In any case, through use of its noteworthy and dependable creation methods and showcasing techniques, they kept up dependability of a customer base that trusted in the items delivered by Toyota (Driel and Dolfsma, 2009:67).

College Essay Topics for Students

College Essay Topics for StudentsCollege essay topics for students are the most important aspects of writing assignments. Students will want to write effective papers and essays so that they can show their knowledge, education, and expertise to the examiners. These are the most fundamental essay topics that students should know.The topic is used in the first paragraph of the paper to introduce the topic and to define the context of the subject. It will also explain the research that was made and also how it was researched. Students must take note of the subtopic, or topic, of the study, which they are using in the research. For example, if a student wrote a research paper on the written languages of ancient Greece, he or she would make a research paper on Ancient Greek writing. The information he or she is researching must be relevant to the subject of the study.The context is also important. The topic of the paper should include information about the specific time period of time whe re the subject is happening. Students should also use the time period to present the background of the topic, to contextualize the information, and to identify the context of the research. Students also have to be able to differentiate what is in the study and what is learned from the information that is being presented. The level of understanding that the student has from the information presented is not the same as the level of understanding that a student would have to learn.The research is also important in the topic of the essay because it provides a background to the study that the student has undertaken. Students should use the research that they are researching as a tool to understand the study, the study's context, and the present time. This will allow the student to look at both the past and the present in the research.The research also can give the students an introduction to the subject and to the research methodology that they will use in the study. This knowledge is im portant to the students because they will need to know how they will do their research. It will also allow the students to know what they are going to be doing on the study or the essay. All the students need to know is that they will use research, and what they will be doing with it.The theme is the most basic information that students need to know before they begin any research. The theme is how the topic relates to other topics that the student has written on. The topic of the paper will typically be an introduction to the topic of the paper.Students will need to use the thesaurus to look for words that they are going to use in the topic. The thesaurus will enable the students to look for words that they already know and will use in the paper. Thesaurus can also enable the students to look for words that they are not familiar with and use these words in the paper. Writing assignment topics for college students will help the students write better papers and essays.

Louise Nevelson - Sky Cathedral - 2897 Words

Louise Nevelson— Sky Cathedral Presence Survey of World Art By Vyacheslav Borts The sculptress Louise Nevelson was a towering figure of American modernism. Born in 1899, she came to prominence in the late ‘50s, gaining renown for monochromatic structures built out of discarded wood. Critic Arthur C. Danto wrote, â€Å"There could be no better word for how Nevelson composed her work than bricolage—a French term that means making do with what is at hand.† (Danto 2007) Her pieces evolved and expanded in size across the latter 20th century, moving from smaller pieces to wall-sized ones, and the plays of volume therein, between light and mass, generated comparisons to numerous different movements. The following paper will examine these†¦show more content†¦The poignancy of this girl’s untimely death and the instant of life the Grave Stele captures are both magnified by the weight and constancy of the marble. By contrast, Nevelson achieves something like suppleness in Sky Cathedral by her use of multiple layers and multiple †Å"new† spaces that emerge from different vantage points. From the Attic Greek to the Augustan age brings one to the Imperial Procession, located on the North frieze of the Ara Pacis Augustae (Fig. 4). The first two sculptures put into conversation with Sky Cathedral were mortuary, but the Imperial Procession is celebratory. The first two are both smaller than four feet, but the Procession is life-sized, so its visual force is thus magnified. Finally, the individuals therein are not idealized types, in contrast to earlier Greek modes of statuary—they naturalistic depictions of many actual people in the line of the Caesars. The Ara Pacis took four years to build, due to its desired scale and quality, and that scale points to a salient evolution from the Greeks to the Romans. Riegl claimed this vector went from what he call[ed] the haptic objectivism of the Greeks—the delineation of the clarity of the object through an appeal to and a stimulation of the tactile associations of the viewer—to the optical objectivism of Roman art, in which the need to set the figure up in space as radically

Environmental Ngos And Global Environmental Issues

How environmental NGOs use the media to shape global environmental issues Even though there have been greatly public concerns about environmental issues since 1960s, practical action as the solution seems to be useless due to the limitation of state and pressure from the corporation. Moreover, the function of international organizations has also faced with difficulties in terms of enforcement and regulation; therefore, there has been wide gap between actors responding to the environmental issues. Environmental NGOs have adequately fulfilled this gap - owned multiple instruments to reach their goals, for example, conducting the environmental-concerned researches, lobbying in both domestic government and global governance and also TNCs, and more importantly raising public awareness and collective action from below (McCormick 2005: 92). Environmental NGOs, ‘agent of change’ works in all both levels; political sphere and civil society (Ford 2011:27). At political level, environmental NGOs act as a pressure group and lobbyist to government and TNCs . Another level is civil society in which environmental NGOs acts in domestic levels - within the nation boundaries, and also in global level, consequently there is part of possibility of global civil society in which people are not limited by nation boundary, but can share common value and perform collective action as a global citizen (McCormick 2005: 93). In doing so, environmental NGOs always politicize the issues by shaping globalShow MoreRelatedNon State Actors Essay1472 Words   |  6 PagesEnvironment now become a global issue. For that reason, non-state actors such as: NGOs and activists participate to solve this problem. However, their participations are almost affecting population’s idea or cooperating with firms and even lobbying policies (O’Neil, 2009). These actions can be considered as effort of non-state actors, but not directly protect environment. 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This new infrastructure makes it easier for â€Å"settlers, merchants, andRead MoreThe And Policy Talks, The Ecological Crisis958 Words   |  4 PagesEnvironmental Movement Proliferation In the academia and policy talks, the ecological crisis has turned into a well-established topic (Yearley, 1992). The rise of environmental politics in the 1960s was mainly driven by environmental movements and a resurgent global civil society. Jamison (1996), notedthat the movement focussed on creating awareness throughout the 1960s. For instance, the publication of Silent Spring by Rachel Carlson (1962), Paul Ehrlich’s The Population Bomb (1968) and GarrettRead MoreFactors that Affect the Awareness on Environmental Issues: A Case Study at Utem Malacca City Campus584 Words   |  3 Pages(Arfa Yunus, 2013). However, nowadays, environmental issues are not only become crucial topic in Malaysia, but also become a great concerns at the international level. 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Western consumers might be innocent, but they are benefiting indirectly from it since Chinese people will bear with the pollutions. It is also absurd that Beijing’s government focuses on moving factories to neighbor provinces like Hebei

Capital structure Corporate finance

Question: Describe about the Capital structure for Corporate finance? Answer: Different Sources of Finance In the given scenario a business will be established. The principle task is to forecast the required amount for investment. Therefore, it is important to identify the different sources funds for financing the business activities. A corporation will be established for manufacturing and retailing high quality doors and windows for commercial purpose. The business plan indicates that total 500,000 will be required for supporting the business activities. This amount is basically start up cost and it need to be sourced from external as well as internal sources of fund. In order to acquire the capital, the corporation can utilize the internal sources of finance such as personal savings and family contribution. On the other hand, the external sources of fund for starting this business will be bank loan, bond and lease financing (Berk and DeMarzo, 2007). In the following table, the different sources of finance have been mentioned along with the proportion. Sources Amount Percentage of Total Fund External Sources Bank Loan 300,000.00 60.00% Fixed debentures 50,000.00 10.00% Lease 75,000.00 15.00% Internal Sources Personal Savings 35,000.00 7.00% Family Contribution 40,000.00 8.00% Total 500,000.00 100% From the above table, it has been found that the external sources will be the major source of fund for starting the business. The internal sources of fund are only 15% of the total capital. Implication of Different Sources of Finance In this scenario, five different sources of finance have been chosen. This section will focus on discussing the legal and financial implication of each sources of finance External Sources: Bank Loan: Bank loan is thee principle source of finance for starting up the business. 60% of the total fund has been lent by the bank. This amount will be majorly spent for building infrastructure and acquiring fixed assets. In this case, the loan must be repaid to the bank at a certain interest rate. It will be counted as the long term liability of the company. The company will start repaying once it starts generating profit. It is expected that the company will repay the principal and interest within 5 years by making quarterly payments. Failing to pay the loan amount will be subject to the decision of the bank and legal steps can be taken by the bank in case of significant delay in repayments. Fixed Debentures: Debentures will be issued by the organization for raising debt capital which will contribute in acquiring 10% of the required fund. Debenture owner will be considered as the long term creditors of the corporation. The company has to pay a fixed rate of interest per annum regardless of the profit or loss of the company. The debenture holder must be paid the entire amount within the predetermined tenure. Any violation from the payment terms will lead the company to face legal consequences. Lease: Fixed asset of the company will bought by the leasing company o behalf of the company and it will be provided to the company. In this case, the ownership of the asset will remain with the leasing company. Throughout the leasing period, the company needs to pay rent. Finance lease has been chosen by the company (Artikis, 2007). Internal Sources: Personal Savings: Personal savings is employed funding the start up costs of the new business. This is personal savings which will not be directly paid back to the investor or the business owner. The business owner will get certain portion of the profit once the company starts gaining. Family Contribution: Family members of the owner have contributed for supporting the business activities. The business must pay back the amount within the promised tenure. However, no interest will be charged by the family members in this case (Berk and DeMarzo, 2007). Evaluation of Appropriate Sources of Finance This section will focus on discussing the advantages as well as disadvantages of each source of finance chosen for starting up the business. Bank Loan: Advantages Large amount has been arranged from this source. Long period has been allowed for repaying the loan. As the company is seeking a long term investment, bank loan is appropriate for this project. The bank does not interfere in how the money is spent within the organization. Tax benefit can be availed. Disadvantages: Collateral is required for getting loan. The amount needs to be repaid within the pre-determined tenure. The company needs to bear the cost of interest. High amount of loan will affect the gearing ratio of the company (Brealey, Myers and Marcus, 2004). Fixed Debentures: Advantages: The ownership of the company is not diluted by issue of debenture. The debenture interest is considered as expenditure and tax benefit can be availed. If the company has surplus fund, the debenture can be redeemed. Disadvantages: The amount needs to be paid to the debenture holder regardless of the financial position of the company. The interest amount needed to be paid within the agreed date. Lease: Advantages: The company needs not to pay the huge amount for purchasing the assets. The lease amount paid to the leasing company is pre-determined and it is fixed over the time. Inflation has no impact on the lease rent. Disadvantages: In case of lease, the ownership of asset remains with the lessor. The lease contract cannot be terminated according to the will of the lessee. Personal Savings: Advantages: Formal paperwork and procedure is not required. The money needs not be paid back to the owner. The company needs not to pay interest. Disadvantages: Large amount of fund is not available. The owner is losing opportunity cost. Family Contribution: Advantages: The amount can be received easily. The company needs not to bear the cost of interest. The lenders will be lenient in terms of paying back the amount (Harrison and Horngren, 2001). Disadvantages: The opportunity cost will be lost. The amount will be small. Identification and Analysis of Cost of Finance The cost of finance in case of the discussed scenario will be explained in this section. In case of bank loan, the cost of finance will be the rate of interest. The company has chosen to opt fixed debenture. Hence, the cost of debenture will be fixed rate of interest that needs to be paid to the debenture holders. In case of lease rent, the cost of finance can be calculated with the aid of lease rent, lease tenure and the asset value. Thus, the cost of external sources can be calculated. The cost of internal sources will be difficult to calculate. The cost investing capital of the owners and the cost of amount contributed by the family members can be referred the opportunity cost. In this case, opportunity cost can be considered as same as the risk free rate of interest or the interest rate of the government bonds. In order to calculate the overall cost of capital of the company, Weighted Average Cost of Capital (WACC) can be estimated. It means the cost of capital for each source of capital will be multiplied with the weight or the proportion (Madura and Madura, 2008). Importance of Financial Planning Financial planning is considered to be very important for the success of an organization. Financial planning is associated with pre-designing financial activities of the company on the basis of the present market situation along with the organizational goals. Financial planning helps in forecasting the financial activities of the company depending on the current economic factors and organizational goals. Therefore, budget is developed which ensures effective allocation of resources. All the activities are carried out by keeping parity with the budget. The financial planning of an organization helps in indicating the desired level of sales, profit and growth of the company. The other departments such as production, marketing etc act accordingly for meeting the financial objectives. Additionally, financial planning ensures that appropriate sources of fund have been chosen by the company. Investment planning is another important activity that helps in ensuring success of the organizatio n. Required Information for Decision Making For making rational decision, the management requires some significant and authentic information. First of all, the factors of macro environment must be accessed. For example the economic condition, demand, level of rivalry in the market must be analyzed by the organization for making right decision. Additionally, the information relating to the particular project such as forecasted cash flow, discount rate or cost of capital must be known by the management for making an informed decision which will be favorable for the organization (Smart, Megginson and Gitman, 2004). Impact of Different Source of Finance on Financial Statement Different sources of finance have distinct implication on the financial statement. In case of bank loan, debenture, the company will be including the interest amount as items of expenditure. Therefore, tax benefit will be obtained in these cases. However, the two internal sources of finance will not have any influence on the financial statement of the company. Preparation of Cash Budget for Hollywood Conservatories Ltd: Particulars June July August September Opening Balance 130,000.00 29,000.00 100,000.00 103,000.00 Sales 150,000.00 156,000.00 135,000.00 Cash Purchase 55,000.00 46,000.00 86,000.00 74,000.00 Credit Purchase - - 28,000.00 36,000.00 Rent 15,000.00 - - 15,000.00 Other Expenses 22,000.00 24,000.00 30,000.00 38,000.00 Repayment of loan 9,000.00 9,000.00 9,000.00 - Total Expense 101,000.00 79,000.00 153,000.00 163,000.00 Cash in hand 29,000.00 100,000.00 103,000.00 75,000.00 From the above, table the cash position of Hollywood Conservation Ltd can be estimated for four months. It has been found that the company will be able to maintain significant amount of surplus cash over the four months. Cash is necessary for undertaking the day to day activities of the organization. However, it must be considered that holding huge amount of cash does not have a positive implication of the company. In case of Hollywood Conservation Ltd, the cash balance is very high. It implies that the cash has not been properly utilized and the surplus cash is too high. Hence, the company must focus on utilizing the additional cash in some other activities for generating income (Smart, Megginson and Gitman, 2004). Price Calculation Price setting is considered to be one of the most important activities of an organization. The cost of product is given. First of all, the total profit will be calculated when 800 units are sold. From the following table, it has been found that total profit will be 27,600. Particulars Amount Variable cost per unit 65.00 Fixed cost per unit 50.00 Total cost per unit 115.00 Selling price per unit (Profit@ 30%) 149.50 Profit per unit 34.50 Profit for 800 units 27,600.00 It has been stated that the fixed cost can be completely recovered when the company manufactures 800 units. Further production will lead to additional fixed cost. Hence in case of production of units beyond 800 units, the selling price is calculated. It has been found that the selling price per unit is 214.50. Additionally, the profit for producing further 400 units has been calculated. It has been found profit in case of additional 400 units will be 19,800. Moreover, the total profit when 800 units and additional 400 units are sold has been estimated to be 47,400. Particulars Amount Variable cost per unit 65.00 Total fixed cost 40,000.00 fixed cost per unit 100.00 Total Cost per unit 165.00 Selling price per unit 214.50 Profit per unit 49.50 Profit for additional 400 units 19,800.00 Total profit 47,400.00 Identification of the Best Investment Proposal In the given scenario, the company has been considering three investment proposals. This section will focus on evaluation of the each project in order to make a rational investment decision. In this case, net present value and payback period are the two tools that has been used for assessing each project. Evaluation of Project A: Cash Flow Year Amount PVF PV Cumulative cash flow Outflow 0 - 60,000.00 1 - 60,000.00 - 60,000.00 Inflow 1 20,000.00 0.909091 18,181.82 - 40,000.00 Inflow 2 18,500.00 0.826446 15,289.26 - 21,500.00 Inflow 3 26,000.00 0.751315 19,534.18 4,500.00 Inflow 4 32,500.00 0.683013 22,197.94 37,000.00 Net Present Value 15,203.20 Payback Period (Years) 2.83 Evaluation of Project B: Cash Flow Year Amount PVF Cumulative cash flow Outflow 0 - 65,000.00 1 - 65,000.00 - 65,000.00 Inflow 1 24,750.00 0.909091 22,500.00 - 40,250.00 Inflow 2 24,750.00 0.826446 20,454.55 - 15,500.00 Inflow 3 24,750.00 0.751315 18,595.04 9,250.00 Inflow 4 24,750.00 0.683013 16,904.58 34,000.00 Net Present Value 13,454.17 Payback Period (Years) 2.63 Evaluation of Project C: Cash Flow Year Amount PVF Cumulative cash Flow Outflow 0 - 45,000.00 1 - 45,000.00 - 45,000.00 Inflow 1 20,000.00 0.909091 18,181.82 - 25,000.00 Inflow 2 15,000.00 0.826446 12,396.69 - 10,000.00 Inflow 3 12,500.00 0.751315 9,391.44 2,500.00 Inflow 4 25,000.00 0.683013 17,075.34 27,500.00 Net Present Value 12,045.28 Payback Period (Years) 2.80 From the above three tables, the net present value and payback period of each project have been calculated. Net present value refers to the total cash flow in terms of present value. The discounting rate has been considered as 10% in these projects. Higher amount of positive NPV value indicate greater financial feasibility of the project. In this case, it has been found that project A has the highest Net Present Value of 15,203.20. Hence, among these three projects, project A is considered to be most attractive (Ross, Westerfield and Jordan, 2004). Payback period is calculated for estimating the time period within which the initial investment can be recovered. It must be noted that the payback period do not consider the present value of cash flow. In case of these three projects project B has the minimum payback period, i.e. 2.63. Lower payback period indicates greater attractiveness of the project. However, the result of Net Present Value and payback Period indicate contradictory results. Project be A has the highest net present value which indicates best option for investment. On the other hand, the payback period of project A has been calculated to be highest among these three projects. Hence, project is A is the least attractive project in terms of payback period. However, in making final decision, NPV must be taken into consideration as it uses present value which is more rational. Hence, it can be concluded that project A must be chosen among these three projects (Madura and Madura, 2008). Explanation of Financial Statements Financial statements are analyzed for evaluating the financial performance of the organization. The major income statements include income statement, cash flow statement, balance sheet and statement of changes in equity. Income Statement: Income statement demonstrates how an organization has been managing the activities for generating profit. The major components of the income statement are sales, expenditure and net income of the firm. Balance Sheet Balance sheet is a comprehensive statement of the assets and liabilities of the firm. It reflects the position of the company in terms of its assets and obligations. Balance sheet is presented to the bank as a reliable basis (Harrison and Horngren, 2001). Cash Flow Statement Cash flow statement clearly indicates the cash generated as well as utilized by the company from operational activities, investment activities and financing activities. It helps in demonstrating the cash position of the company. Statement of Change in Equity Statement of changes in equity helps in estimating the equity of the owner in revaluating the assets along with the funds of the company such as reserve fund, welfare fund etc. Comparison Appropriate Format of Financial Statement The format of financial statements is different in case of different types of business such as sole proprietorship, corporation and partnership. In the following table, the formats of two major financial statement income statement and balance sheet have been compared. Type of Business Income Statement Balance Sheet Sole Proprietor The income statement is not complicated. The owner pays the income tax and it has not been shown in the income statement of the firm. The profit and loss of the firm has been reported without dividend. Balance sheet is considered to be the statement of the equity of the owner. In balance sheet equity refers to the equity of the owner. In the balance sheet drawings are not considered as the expenditure and these elements are not included in the income statement too. Partnership In this case, the income statement is complicated as there are several owners. Personal income tax is paid by the owners. Hence, it is not demonstrated in the income statement. The dividends are shared among the partners. Balance sheet is considered to be the equity of the owners. In the balance sheet, equity in the assets segment demotes the equity of the owners. In the balance sheet, interest on capital account, shares, profit, drawings etc are recorded. Corporation Income statement of corporation or public limited company is the most complicated one. Corporation is considered to be a legal entity and it has to pay tax on the business activities exhibited in the income statement. Profit or gain must be published by the corporation (Davies, Boczko and Chen, 2008). Balance sheet is considered to the statement of retained earnings. Equity refers to the equity of the shareholders. The change in the equity of the business must be recorded in the balance sheet. Ratio Analysis Distribution ('000) Retail ('000) Gross Profit 10,400.00 12,430.00 Revenue 40,870.00 26,540.00 Gross Profit Margin 25.45% 46.83% Net Profit 5,850.00 2,950.00 Revenue 40,870.00 26,540.00 Net Profit Margin 14.31% 11.12% Current Asset 2,510.00 5,070.00 Current Liabilities 1,950.00 2,950.00 Current Ratio 1.287179487 1.718644068 Current Asset 2,510.00 5,070.00 Inventories 2,420.00 2,370.00 Current Liabilities 1,950.00 2,950.00 Quick Ratio 0.05 0.92 Long term loans (Debt) 2,000.00 3,170.00 Capital (Equity) 3,000.00 5,500.00 Gearing Ratio 0.666666667 0.576363636 Gross profit margin is estimated to be higher in case of retail. On the other hand, net profit margin is estimated to be higher in case of distribution (Hansen and Mowen, 2005). Current ratio helps in depicting the capability of the company to meet the short term obligations by current assets. In both the cases, current ratio is higher than 1 and it has a positive implication. Quick ratio is estimated to be better in case of retail compared to distribution. Gearing ratio indicates the ratio between debt and equity. The debt to equity ratio is lower in case of retail which indicates that debt is lower and risk is lower (Coombs, Hobbs and Jenkins, 2005). References: Artikis, G. (2007).Capital structure. [Bradford, England]: Emerald. Berk, J. and DeMarzo, P. (2007).Corporate finance. Boston: Pearson Addison Wesley. Brealey, R., Myers, S. and Marcus, A. (2004).Fundamentals of corporate finance. Boston, Mass.: McGraw-Hill Irwin. Coombs, H., Hobbs, D. and Jenkins, D. (2005).Management accounting. London: SAGE Publications. Davies, T., Boczko, T. and Chen, J. (2008).Strategic corporate finance. London: McGraw-Hill Higher Education. Hansen, D. and Mowen, M. (2005).Management accounting. Mason, OH: Thomson/South-Western. Harrison, W. and Horngren, C. (2001).Financial accounting. Upper Saddle River, NJ: Prentice Hall. Madura, J. and Madura, J. 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