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Performance Evaluation Using Ratio Analysis: Public Versus New-Generation Private Sector Banks
--B Amarender Reddy and D Sreenivasa Chary
Stabilization and Structural Adjustment Program of 1991 has brought unprecedented changes in the Indian economy. The post policy initiatives resulted in the abolition of licensing policy, de-reserving the areas for the participation of private entities, disinvestment of government investments in public sector organizations, opening up of the Indian economy for global players in various sectors, disintermediation in the financial markets, reducing the role of public financial institutions, and the emergence of new-generation private sector banks. This paper examines the impact of the entry of new-generation private sector banks on the performance of public sector banks, by analyzing 29 performance-related ratios for 12 years (2004-05 to 2015-16), relating to these banking groups, to determine whether there is any significant difference in their performance. The results indicate that new-generation private sector banks are able to show better performance by judiciously sourcing the funds either from public/market at a cheaper rate of interest and deploying them on deserving assets at less operational costs. The competition warranted the public sector banks to improve their performance, to comply with the profitability considerations and as well realize the social obligations.
© 2017 IUP. All Rights Reserved.
Impact of Changes in Regulatory Framework on Financial Reporting Quality: A Study of S&P CNX Nifty Companies
--Taminder Kaur and Archana Goel
The quality of information provided in annual reports depends upon many factors. A large number of studies identified various factors that influence Financial Reporting Quality (FRQ) such as ownership structure, financing pattern, domestic and foreign listing of shares, diversity in management, audit committee and board structure. One of the important factors which influence FRQ and has not been explored much in accounting literature is legal and regulatory environment of a country. Very few studies have focused on the impact of legal and regulatory environment on FRQ. This paper is an attempt to examine the impact of change in legal statute on FRQ of Indian companies by examining the annual reports of S&P CNX Nifty companies before and after the enactment of the new Companies Act 2013. The results show that there is no significant improvement in most of the elements in FRQ which may indicate lack of interpretation of new regulations or lack of strict implementation of rules. This may also implicate that policy makers should bring more clarity to current regulations, assigning responsibility to relevant authorities for proper implementation of rules.
© 2017 IUP. All Rights Reserved.
Accounting for Farms in India:
An Analysis in the Context
of Recognition, Measurement
and Presentation of Financial Data
--Haripriya Dutta and Debabrata Das
The farm accounting practice in India is said to be in its infant stage. This paper seeks to examine the rationale for a full-fledged farm accounting practice in the country. Literature reveals a strong relationship between the degrees of commercialization with that of the adoption of accounting practices. Therefore, the study attempts to examine the commercial traits in Indian farms, which genuinely envisage such practices in the sector. Thereafter, the existing practices of accounting in India are discussed by underscoring the measurement and valuation techniques of different farm account heads. Lastly, the study tries to draw attention to certain lacunas in the existing system. These are drawn using the authors’ own observations, supported by past research. As outcomes of the study, a considerable commercial appeal is seen in the Indian farm sector. Certain farm accounts heads and their respective treatments are provided to explore the existing system of farm accounting in the country. The drawbacks of present practice are found in terms of recognition, measurement and presentation of financial data.
© 2017 IUP. All Rights Reserved.
Conceptual Issues in Lean Accounting:
A Review
--Vineeta Arora and G Soral
In today’s business world, accounting is defined as not only a tool for measuring financial figures, but also a foolproof system that can measure and manage the value. This has forced the companies to re-think on their internal processes so that the process also meets the value definition of the customer. Lean accounting can be the answer to all the expectations raised. It is a principle-based operating system which can be expressed in terms of customer value, value stream, flow and pull with minimum interruption, pursuit of perfection, and empowered people. It is a systematic approach to eliminate waste like overproduction, waiting, transportation, inventory, over-processing, etc. through continuous improvement. The current cost accounting system earns profit by full utilization of resources, and is associated with large inventory, long lead time and poor delivery, while lean system earns profit through ‘maximized flow’ on pull from customers and elimination of waste, resulting in superior customer value, good quality, good delivery and shorter lead time. This paper tries to explore the conceptual issues of lean accounting, i.e., its meaning, definition, evolution, need, and also presents a comparison between lean accounting and traditional accounting which helps the readers to understand the term lean accounting clearly.
© 2017 IUP. All Rights Reserved.
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