NOLEGEIN Journal of Financial Planning and Management 2018 Issue 1 by Mba Journals

NOLEGEIN Journal of Financial Planning and Management eISSN: 2581-4087

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NOLEGEIN Journal of Financial Planning and Management Nolegein - Journal of Financial Planning and Management is focused towards the rapid publication in the following areas of

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Personal Finance and Corporate financial Service Industry Financial statement analysis Sources of Financing Capitalization and Capital Structure Cost of Capital Leverage & Dividend Decision Capital Budgeting Working Capital Management Financial System Mutual Funds, Insurance, Stock Markets, Wealth Management Banking Service and Macro Economy Sections covered by this journal are review papers, research papers, interviews, news, companies/ institutions write-ups, short popular articles and case studies. All contributions to the journal are rigorously refereed and are selected on the basis of quality and originality of the work. The journal publishes the most significant new research papers or any other original contribution in the form of reviews and reports on new concepts in all areas pertaining to its scope and research being done in the world, thus ensuring its scientific priority and significance.

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EDITORIAL BOARD MEMBERS Shalini Aggarwal Associate Professor Department of Management, Chandigarh University, Mohali, Punjab, India

Dr. Paritosh Basu Senior Professor Department of Finance in Management, NMIMS School of Business Management, Maharashtra, Mumbai, India

B.Raghavendra Prabhu Associate Professor Department of Business Administration, Sahyadri College of Engineering and Management, Mangaluru, Karnataka, India

Dr. Paresh Shah Professor Department of Management, Rai University and Accredited Management Teacher and Researcher, Ahmedabad, Gujarat, India

Dr. Ramu Nagarajapillai Associate Professor Department of Commerce, Annamalai University, Chidambaram, Tamil Nadu, India

Ashish Nag Assistant Professor Department of Finance and Marketing in Management, Central University of Himachal Pradesh, Shahpur, Himachal Pradesh, India

K.Lubza Nihar Assistant Professor Department of Accounting and Finance in Management, GITAM School of International Business,Visakhapatnam, Andhra Pradesh, India

Dr. Jnaneshwar Pai Maroor Assistant Professor MBA Department - Finance and Human Resource Management, Justice K.S. Hegde Institute of Management,Mangaluru, Karnataka, India

Binny Rawat Faculty Department of Finance & Accounts in Management, Amrut Mody School of Management, Ahmedabad, Gujarat, India

Dr. Kajalbaran Jana Assistant Professor Department of Commerce, Tamralipta Mahavidyalaya, Tamluk, West Bengal, India

Nidhi Sharma Sahore Assistant Professor Department of Management, Bharatiya Vidya Bhavan's usha and lakshmi Mittal Institute of Management, Gandhi Marg, New Delhi, India

Dr. Elgin Alexander Assistant Professor Department of Marketing and HR Area in Management, Saintgits Institute of Management, Kottayam,Kerala, India

Dr.MurthyJogalapuram Associate Professor MBA department, Sree Vidyanikethan Institute of Management, Tiruputhi, Andhra Pradesh, India

Dr. Mahajan Shrikrishna Shankar Professor Department of Commerce and Management,, Shivaji University, Kolhapur, Maharashtra, India

Sumitkumar S. Acharya Assistant Professor Department of Management, Shree Swaminarayan Institute of Management, Porbandar, Gujarat, India

From the Editor's Desk Dear Readers, We would like to present, with great pleasure, the inaugural First volume of a new scholarly journal, NOLEGEIN Journal of Financial Planning and Management. This journal is part of the Financial Planning and Management, and is devoted to the scope of present management issues, from different. This new journal was planned and established to represent the growing needs of marketing as an emerging and increasingly vital field, now widely recognized as an integral part of Management. Its mission is to become a voice of the Management community, addressing researchers and practitioners in this area. The core vision of NOLEGEIN Journal of Financial Planning and Management in MBA Journals is to propagate novel awareness and know-how for the profit of mankind ranging from the academic and professional research societies to industry practitioners in a range of topics in advertising in general. MBA Journals acts as a pathfinder for the scientific community to published their papers at excellently, well-time & successfully. NOLEGEIN Journal of Financial Planning and Management focuses on original high-quality research in the Capital Budgeting, Banking Service and Macro Economy, Consumer Credit, Debt Planning and Management, Taxation Planning and Estate Planning, Financial System etc. The Journal is intended as a forum for practitioners and researchers to share the views of Financial Planning and Management in the area. Many researchers have contributed to the creation and the success of the Financial Planning and Management. We are very thankful to everybody within that community who supported the idea of creating an innovative platform. We are certain that this issue will be followed by many others, reporting new developments in the field of Financial Planning and Management. This issue would not have been possible without the great support of the Editorial Board members, and we would like to express our sincere thanks to all of them. We would also like to express our gratitude to the editorial staff of MBA Journals, who supported us at every stage of the project. It is our hope that this fine collection of articles will be a valuable resource for Management readers and will stimulate further research into the vibrant area of Financial Planning and Management.

Puneet Mehrotra Managing Director

Contents 1. Financial and Capital Markets Today P. Megaladevi, S. Akila, T. Ajith Ambedkar

2. A Study on Financial Analysis of Profitability and Liquidity Position of Software Companies in India D. Ananthi, R. Mohana Soundari

3. Review on Expenses Related to Financial Statement Rahul Kumar

4. Impact of Receivables on Profitability and Liquidity â&#x20AC;&#x201C; Using Multi-Linear Regression Model-Nestle India Paresh Shah

5. The Analysis of the Factors Contributing to the Fluctuations of FII in India J. Pai Maroor, B. Vamana Baliga

6. Measuring Financial Performance Using Camel's Model: A Comparative Analysis of Indian Public and Private Sector Banks Preeti Chaudhary, Nailesh Limbasiya

NOLEGEIN: Journal of Financial Planning and Management eISSN: 2581-4087 Vol. 1: Issue 1

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Financial and Capital Markets Today P. Megaladevi*, S. Akila, T. Ajith Ambedkar Jay Shriram group of Institutions, Tirupur, Tamil Nadu, India

ABSTRACT Financial market is a market where financial instruments are exchanged or traded and helps in determining the prices of the assets that are traded in and is also called the price discovery process. The financial market development is one of the key drivers of economic growth in developed and developing countries. The empirical evidence suggests that the development of stock markets in China, USA, United Kingdom, Japan and Hong Kong have independently a strongly positive correlation with their economic growth. The result brings out the stock market in present days and its types include capital and money markets. And trading instruments, institutions of capital and money market. Keywords: capital and money markets, exchanged, financial market, growth

INTRODUCTION A financial market is a market that brings buyers and sellers together to trade in financial assets such as stocks, bonds, commodities, derivatives and currencies. The purpose of a financial market is to set prices for global trade, raise capital and transfer liquidity and risk. Although there are many components to a financial market, two of the most commonly used are money markets and capital markets.

CAPITAL MARKET (1) Capital market is the market for leading and borrowing of medium and long-term funds. (2) The demand for long-term funds comes from industry, trade, agriculture and government (central and state). (3) The supply for funds comes from individual savers, corporate savings, banks, insurance companies, specialized financial institutions and government.

Money markets are used for a short-term basis, usually for assets up to one year. Conversely, capital markets are used for long-term assets, which are any asset with maturity greater than one year. Capital markets include the equity (stock) market and debt (bond) market. Together the money and capital markets comprise a large portion of the financial market and are often used together to manage liquidity and risks for companies, governments and individuals.

New York Stock Exchange is one of the largest secondary capital markets in the world. As of 2013, most of the NYSEâ&#x20AC;&#x2122;s trades are executed electronically, but its hybrid structure allows some trading to be done face to face on the floor. Most 21st century capital market transactions are executed electronically, sometimes a human operator is involved, and sometimes unattended computer systems execute the transactions, as happens in algorithmic trading.

NOLEGEIN: Journal of Financial Planning and Management eISSN: 2581-4087 Vol. 1: Issue 1

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A Study on Financial Analysis of Profitability and Liquidity Position of Software Companies in India D. Ananthi*, R. Mohana Soundari Tiruppur Kumaran College for Women, Tiruppur, Tamil Nadu, India

ABSTRACT Indian economy stands today as one of the influential and attractive economies. The liberalization moved by the Indian Government in 1990s has given a boost to the Indian economy and put her into a fast track economic growth route. IT industry is one of the successful industries in India. Its rapid growth and development has caught the attention of the world, so that India is now being identified as the major powerhouse for incremental development of computer software. The reason for this attention is not the actual size of the industry but its rapid growth rate over the nineties and the subsequent decade. The growth of the company can be measured in terms of changing investment, sales, profit and profitability. Hence, an analysis of profitability and liquidity is felt relevant. The study is confined to only the IT industry in India. As many as 34 Software companies were selected for the study. The present study was based on secondary data and covers a period of ten years from 2004–2005 to 2014–2015. To analyze the profitability and liquidity position of selected Software companies in India, various accounting and statistical techniques have been applied. Accounting techniques including ratio analysis adopted to analyze and interpret general financial statements to assess the profitability and liquidity position. The tools and techniques are Mean, Standard deviation, Coefficient of variation, Analysis of variance, Correlation, and Multiple regressions. The determination of profitability of a company and analyses of overall trend and pattern of profitability of the total sample companies will help to understand the performance of Software companies. Keywords: Indian economy, liquidity, profitability, software companies

INTRODUCTION Indian economy stands today as one of the influential and attractive economies. The liberalization moved by the Indian Government in 1990s has given a boost to the Indian economy and put her into a fast track economic growth route. With the beginning of the new millennium, India was considered as an emerging super power. In 2009, Indian GDP based on purchasing power parity (PPP) stood at USD 3.5 trillion making it the fourth largest economy. The agricultural sector which was the backbone of postindependence Indian economy took a back seat in the 21st century and contributed only 17.5 percent to the GDP while India’s service industry accounted for 62.5 percent

of the GDP. Indian service sector has witnessed a major boom and is one of the major contributors to both employment and national income in recent times. Among all the major service sector industries, information technology industry is undoubtedly a vital sector for Indian economy. Information technology industry in India is among the fastest growing segment of Indian industry compounding with an annual growth rate exceeding 50 percent. The liberalization of the Indian economy in the early nineties has played a major role in the growth of the IT industry of India. Deregulation policies adopted by the Government of India have led to

NOLEGEIN: Journal of Financial Planning and Management eISSN: 2581-4087 Vol. 1: Issue 1

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Review on Expenses Related to Financial Statement Rahul Kumar* Department of Marketing, Jaipuria Institute of Management Studies, Ghaziabad, UP, India

ABSTRACT Expense is an accounting and planning term typically alluding to something an organization or association burns through cash on. More correctly and more comprehensively, however, accountants characterize cost as a lessening in proprietor's value brought on by spending resources. Costs happen when resources are devoured or liabilities are expanded to deliver income. More particularly, costs speak to a gross abatement in resources or gross increment in liabilities that outcome from benefit coordinated exercises that change proprietor’s value. This paper shows the detail data about costs, monetary records, expenses and financial statements. Keywords: expenses, financial statement, investors, suppliers, traders

INTRODUCTION Cost of earning revenue is called the expense. Expenses occur when assets are consumed or liabilities are increased to produce revenue. More specifically, expenses represent a gross decrease in assets or gross increase in liabilities that result from profit-directed activities that change owner’s equity [1]. For example, if a firm pays wages to its workers; then it incurs an expense. The firm used the services of its workers in manufacturing the products which have been sold and resulted in revenue. If the wages are paid in cash, assets of the firm have decreased [2, 3]. As liabilities are not at all affected by this, the decrease will be in owner’s equity. Even if the wages are not paid in cash but are payable, still an expense is incurred. If the services have been rendered by the workers, the firm has an obligation to pay to them. So, there is an increase in liabilities of the firm. As net assets of the firm decrease due to increase in liabilities, owner’s equity will decrease [4, 5]. Cost is not the same thing as an expense. Cost is an outlay incurred to acquire some

(a) Expired costs: Expired costs are the ones which have helped to produce revenues. Expired costs are recognized as expenses in the income statement. Expired costs are also known as revenue expenditures. (b) Unexpired costs: Unexpired costs are those costs which will help in producing revenue in future. Such costs are recognized as assets in balance sheet. Thus, assets (unexpired costs) become expenses (expired costs) as they are used up and lose their ability to generate revenue in future periods. Unexpired costs are also known as capital expenditures. EXPENSE RECOGNITION Three expense recognition principles may be followed in matching expenses with revenues [6]. These are as follows: (a) Principle of associating cause and effect: According to this principle certain costs expire in an accounting period because they can be associated directly with specific revenue recognized during that period. Examples of such costs are the costs specifically related to producing certain goods that are sold. (b) Principle of systematic and rational allocation: It deals with those costs which

NOLEGEIN: Journal of Financial Planning and Management eISSN: 2581-4087 Vol. 1: Issue 1

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Impact of Receivables on Profitability and Liquidity – Using Multi-Linear Regression Model-Nestle India Paresh Shah* Department of Commerce and Management, Rai University, Dholka, Ahmedabad, Gujarat, India

ABSTRACT Profitability and liquidity management of the company plays a pivotal role to the management. Management of working capital essential as it has direct impact on profitability and liquidity. An attempt has been made in this research paper to study the one of the main components of working capital, i.e., receivables on profitability and liquidity of Nestle India. The paper makes an attempt to study the relationship and influence between receivables and profitability and liquidity of Nestle India. The study is based on secondary data of Nestle for the period from 2006–2007 to 2015–2016. Multi-linear regression model and ANOVA were used to check the significant impact on the profitability and liquidity of receivables management. Keywords: current ratio, debtor’s ratio, debtors to sales ratio, debtors to gross profit, net profit margin

INTRODUCTION Account receivables are the customers who have not paid yet the amount of goods and services bought and availed respectively. Account receivable (debtors) requires proper management regarding the collection of the receivables because the funds are tied up and may turn out doggy in future. Profitability refers to the difference between expenses and revenues of the company while liquidity refers to availability of cash or fund in the firm at any point of time. Sometimes profitable firm may not have enough liquidity because all funds are invested into different projects and firm with enough liquidity might not be profitable because of lack of proper opportunities. Profitability and liquidity are not same, and the firm has to maintain an equilibrium balance between the two. Credit policy reflects that the credit time period given to debtors for the payment specifies collection procedure and

provides guideline to collect unpaid invoice that can reduce delays for the payments of goods and services and other outstanding dues by firm. If the account receivables rate is high then it has negative impact on the profitability of the business; also resulted into short of funds and it in turn lead to liquidity crunch. Debtor’s payment affects profitability and liquidity both because payment of the outstanding receivables increases the revenue and collection management helps firm to have fund the for liquidity purpose at any time. LITERATURE REVIEW The competition is a major challenge that every firm encounters during their working capital decision making process for optimum utilization of scarce resources. To examine the effects of receivables management, it is important to consider the effect of credit policy in order to manage the firm profitability and liquidity.

NOLEGEIN: Journal of Financial Planning and Management eISSN: 2581-4087 Vol. 1: Issue 1

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The Analysis of the Factors Contributing to the Fluctuations of FII in India J. Pai Maroor1,2*, B. Vamana Baliga1,2 Justice K.S. Hegde Institute of Management, Nitte, Karnataka, India Sri Mahaveera College, Moodbidri, Karnataka, India

ABSTRACT Foreign Institutional Investment (FII) has emerged as an engine of Indian economic growth as it meets the much-needed capital requirement. Though FII has flown largely to Indian market, it is not consistent and stable. FII appears to be sensitive to several global and domestic macroeconomic factors. The present study has the objective to investigate the factors contributing to the fluctuations in the FIIs. The study is based on secondary data which are collected on monthly basis from April, 2005 to December, 2016. A linear multiple regression model has been developed with BSE sensex, exchange rate, whole sale price index, index of industrial production and treasury bill yield rate as explanatory variables and FII as dependent variable. The results show that Exchange rate, Inflation and Treasury bill yield have significant impact on FII in India. It has been found that Exchange rate has inverse relationship with the FII. This leads to the inference that appreciation of the domestic currency may discourage FII in Indian capital market. Surprisingly, inflation seems to have positive impact on FII and Treasury bill yield appears to be inversely related to FII. Based on the outcome of the study, it has been suggested to the government to pursue appropriate monetary and fiscal policy measures to stabilize interest rate, inflation and exchange rate to ensure stable FII inflow to Indian capital market which would strengthen Indian economy. Keywords: FII, IIP, treasury bill yield, WPI

INTRODUCTION India, being one of the leading developing countries in the world, is recording a rapid economic growth. There can be many reasons responsible for this rapid economic growth. One among them is increased inflow of foreign capital. Almost all the countries in the world depend on foreign capital for its economic development. It is not possible for every country to possess all the economic resources that are required for its economic development. This is true in the case of India also. Indian Government is trying to attract more and more foreign capital which are utilized in achieving an all-round development. The foreign capital started flowing into the country since 1991

with the policies of Liberalization, Globalization and Privatization. The decision taken by the then Government laid a foundation for achieving a rapid economic growth. The rate of flow foreign capital into the country was not great initially. But later with the various Government Initiatives it started increasing at an increasing rate. Now, India has become one of the top destinations for investment in the world. It has become an attractive spot for investment. Foreign Capital flows into an economy in two forms. They are Foreign Direct Investment (FDI) and Foreign Institutional

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Measuring Financial Performance Using Camel’s Model: A Comparative Analysis of Indian Public and Private Sector Banks Preeti Chaudhary, Nailesh Limbasiya* Department of Management, RK University, Rajkot, Gujarat, India

ABSTRACT Execution assessment of the keeping money area is a convincing measure and pointer to check the soundness of monetary exercises of an economy. In the present investigation an undertaking has been made to survey the execution and monetary soundness of chose Public and Private Sector Banks in India. The investigation has been made for the time of 2016– 2017. CAMEL approach has been used to examine the financial strength of the selected banks. Composite Rankings and Independe`1nt two sample t-test has been applied here to reach conclusion through the comparative and significant analysis of different parameters of CAMEL. The findings of the study show that Public Sector Banks, viz. Central Bank, Indian Bank, State Bank of India, Bank of Baroda and Bank of India has been ranked at the top five positions compared to other banks under the study in their financial performance during the study period. On the other hand, IDBI Bank is at a lowest position under the study. The Private Sector Banks, namely, IDFC Bank, HDFC Bank, Kotak Mahindra Bank, Yes Bank and ICICI Bank shared the top five positions. On the other hand, RBL Bank is at lowest position under the study. The empirical results show that there is a statistically significant difference between the CAMEL ratios of the selected Public Sector Banks, Private Sector Banks in India, thus, signifying that the overall performance of within and between Public Sector Banks and Private Sector Banks are different. Results depict that the excellent performance of the Banks in regard with various parameters of CAMEL can be attributed to the adoption of modern technology, banking reforms, and good recovery mechanisms. However, the Banks also need to improve its position with regards to a few sub-parameters (ratios) of CAMEL approach to strengthen their weak areas. Keywords: asset quality, capital sufficiency, earnings capacity, management quality, liquidity

INTRODUCTION Managing an account segment assumes an essential part in the financial advancement of a nation. The saving money segment changes in India were begun as a subsequent measure of monetary progression and budgetary area changes in the nation. The managing an account division being the life line of the economy was treated with most extreme significance in the money related area changes. The changes were gone for to make the Indian

keeping money industry more focused, profitable and productive and to take after global bookkeeping norms. The changes in the keeping money industry began in the mid-1990s have been proceeded till now and the Indian managing an account industry enrolled gigantic development in the post-progression time. Since the start of 1991, there have been extensive changes in the principles and control, association, degree and movement level of Indian Banking area. [Recent Economic