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Companies/Organisations Articles
Page 47 of 59
Distinguish between active and passive investment.
The major differences between active and passive investment are as follows &mius;Active InvestmentIt is an investment invested after doing independent analysis on value of each investment.The main objective is to beat market performance.It focuses on absolute terms.In view of investor perception, market may be inefficientIt has higher transaction frequency.It has high returns and more risk.It has high operating cost.It includes short term price fluctuations.High skills are required to make decisions.It is highly flexible in investing.Passive InvestmentIt is invested after investor portfolio is matched with market portfolio.The main objective is to match tracked index.It focuses on relative returns.In the view of ...
Read MoreDifferentiate between capital account and current account.
The major differences between capital account and current account are as follows −Capital AccountThese are accounts related to capital investments and expenditures of a country to another.It measures inflow and outflow of capital in economy.It evaluates country net investment position.Impacts foreign assets and liabilities of a country.Deals with source and utilisation of capital.Current AccountThese are accounts related to trade of goods and services of a country.It measures inflow and outflow of goods and services in the economy.Merchandise trade, services, income receipts and unilateral transfers are key components.It evaluates trade surplus/trade deficit of a country.Impacts on net income and output of ...
Read MoreWrite the difference between large cap stock and small cap stock.
The major differences between large cap stock and small cap stock are as follows −Large Cap StockIf market capital is greater than 20, 000 crores, then it is called large cap stock.The risk is less.There are less returns.It has relatively high stability in business.The availability of information is high.It has less growth potential.Small Cap StockIf the market capital is less than 500 crores, then it is called as small cap rock.The risk is high.There are high returns compared to mid-cap.It has relatively low stability in business.Less information is available.It has high growth potential.
Read MoreCompare annuity and lump sum.
The major differences between annuity and lump sum are as follows −AnnuityThe payments are spread across the period of time.An investor who wants regular inflow of payments prefers annuity.It is short term in nature.The types of annuity are deferred and immediate.An amount received is very less to take decision about investment or business.The cash flow will add up to larger amount.Lump sumThe payment is made at once.An investor who is willing to get the money at point of time will prefer lump sum.It is long term in nature.There are no types in lump sums.It includes high tax burden.The payment is ...
Read MoreDistinguish between period cost and product cost.
The major differences between period cost and product cost are as follows −Period CostIt’s the cost not allocated to any products and is charged as expenses.It is also called as operating costs.Time is the basic for period cost.It contains only non-manufacturing cost.It is recorded as expense in income statement.It is not considered for valuation of inventory.It is considered by valuation (cost inventory).It includes Administrative cost, distribution cost etc.It is not a part cost of production.The cost is fixed.Examples − audit fees, rent etc.Product CostIt is the cost allocated to products.It is also called as inventorial cost.The volume is basis for ...
Read MoreDifferentiate between revenue and turnover.
The major differences between revenue and turnover are as follows −RevenueIt is the total value of goods sold by a company.It is the money earned by selling goods/services.It effects the profitability of a company.It calculates the gross profit, net profit and operating profit.It determines growth of the company.The types of revenue are operating revenue and non-operating revenue.It is mandatory to report on income statement.TurnoverIt is an income generated by trading of goods/services.It is makes/burns of the asset by a company.It effects the efficiency of a company.It calculates inventory turnover ratio, asset turnover ratio, sale turnover ratio, accounts receivable and accounts ...
Read MoreCompare marginal tax rate and effective tax rate.
The major differences between marginal tax rate and effective tax rate are as follows −Marginal Tax RateIt is additional tax paid on additional dollar is earned.It’s a percentage of income paid on additional dollar earned.Different tax rates are applicable.Amount paid is higher (calculated amount).Higher income people/companies pays more taxes.Taxation goes down when income decreases.Not good for business expansion and is a complicated method.Effective Tax RateIt is tax paid on taxable income.Its percentage of income paid on taxes.Multiple tax rates are applicable.The tax amount is less (compared to marginal tax rate).It has diversified impact.It has minimal impact when income decreases.It promotes ...
Read MoreWhat are the differences between limited partner and general partner?
The major differences between limited partner and general partner are as follows −Limited partnerLiable to extend of investment made.Ownership is predefined in agreement.Minimal control partner.Profit/loss is shared according to investment proportion.It has complex structure.More paperwork is required.Less participation in day to day business activities.General PartnerIt has unlimited lability.It has equal ownership right.More control as compared to limited partner.Profit/loss shared equally or according to agreement.It has simple structure.Less paperwork is required.Major participation in day to day business activities.
Read MoreWrite the difference between calendar year and fiscal year.
The major differences between calendar year and fiscal year are as follows −Calendar yearIt has fixed time period.It is used in normal life undertaking.It includes 365 days (from January 1st to December 31st).Tax reporting is easy.MNC’s Financials is simple.Easy to compare financials of different companies.Fiscal yearBusiness can choose its starting date as per their requirement.It is used to prepare business accounting, financial reporting and tax reporting.12 months’ period is there in a fiscal year.Tax reporting is complicated as compared to calendar year.MNC’s financial is time taking.Comparison of financials of different companies is difficult.
Read MoreCompare limited liability companies and partnership.
The major differences between limited liability companies and partnership are as follows −Limited liability companiesPartnershipsOffers features of both partnership and a body corporate.It is governed by Limited Liability Partnership Act, 2008.Registration is mandatory with the ministry of corporate affairs.Charter document is LLP agreement.Liability is limited to capital contribution (except for fraud cases).Can be sued/sue in its nameThey have separate legal status.Name of the firm contains LLP in its suffix.No limit for maximum partnersThere is perpetual succession.Audit of account is mandatory, only if turnover is above 40 lakhs and capital is above 25 lakhs.LLP can’t be converted to partnership.Cost of formation ...
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