Tag: Profitability Analysis

Management Notes

Sources of Working Capital

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Working Capital is the capital used to finance a company’s day-to-day operations, ensuring smooth functioning of production, sales, and service activities. It is the difference between current assets and current liabilities, and its availability is essential for maintaining liquidity and solvency. Businesses raise working capital from both internal and external sources, depending on their needs, cost of funds, and repayment capacity. The sources can be classified into Short-term and Long-term, with each playing a vital role in managing financial stability and operational efficiency.

  • Trade Credit

Trade credit is one of the most common short-term sources of working capital, where suppliers allow businesses to purchase goods or raw materials on credit and pay later. It provides immediate access to goods without requiring upfront cash payments, thus helping firms maintain liquidity. Trade credit is especially beneficial for small and medium enterprises as it reduces the need for bank borrowings. However, the extent of credit depends on the supplier’s trust, financial health of the buyer, and past payment record. While it is an easy and interest-free source, delayed payments can damage supplier relationships and affect creditworthiness.

  • Commercial Banks

Commercial banks play a crucial role in providing working capital through loans, overdrafts, cash credits, and short-term advances. Businesses can borrow funds from banks to finance daily operational needs, such as paying wages, purchasing raw materials, or meeting short-term obligations. Bank finance is flexible, as limits can be increased or reduced depending on business requirements. However, interest must be paid on borrowed funds, which adds to financial costs. Banks generally assess a firm’s creditworthiness, financial performance, and collateral before granting loans. Despite costs, commercial bank finance remains a reliable and widely used source of working capital for businesses.

  • Public Deposits

Public deposits are funds raised directly from the public by companies to meet their working capital needs. Businesses invite deposits from customers, shareholders, or general investors for a fixed period at a prescribed interest rate. Public deposits are relatively easy to raise, as they do not involve complex procedures or external restrictions like bank loans. They also help companies build goodwill by engaging directly with the public. However, the success of raising public deposits depends heavily on the company’s reputation and trustworthiness. Failure to repay on time may damage credibility. Thus, public deposits are an inexpensive yet reputation-sensitive source of working capital.

  • Trade Bills (Bills of Exchange)

Trade bills, or bills of exchange, are short-term credit instruments used in business transactions. When a seller supplies goods on credit, they may draw a bill of exchange on the buyer, requiring payment after a specified period. The seller can discount the bill with a bank before maturity to obtain immediate cash. This provides liquidity without waiting for the payment date. Trade bills are a safe and negotiable instrument, widely accepted in commercial transactions. However, reliance on trade bills requires mutual trust between buyer and seller. They remain an effective source of working capital, particularly in industries with credit-based sales.

  • Retained Earnings

Retained earnings are internal funds generated by the business from profits that are not distributed as dividends but reinvested for operational needs. They serve as a cost-free and permanent source of working capital, improving financial independence and reducing reliance on external borrowings. Retained earnings enhance the firm’s creditworthiness since they strengthen reserves and financial stability. However, their availability depends on profitability—loss-making firms cannot rely on them. Moreover, excessive retention may dissatisfy shareholders expecting dividends. Despite limitations, retained earnings are a sustainable and low-risk source of working capital for well-performing companies with consistent profits.

  • Commercial Paper

Commercial paper is a short-term unsecured promissory note issued by financially strong companies to raise working capital directly from investors, usually at a discount. It is a cost-effective financing method as interest rates are often lower than bank loans. Since commercial paper is unsecured, only companies with excellent credit ratings can issue it successfully. It provides flexibility and quick access to funds without lengthy procedures. However, small firms may find it difficult to use due to stricter eligibility requirements. Commercial paper is a popular source of working capital among large corporations needing short-term funds at lower costs.

  • Retained Earnings

Retained earnings are an internal source of working capital generated from the profits of the business. Instead of distributing all profits as dividends, companies keep a portion aside to reinvest in operations. This source is economical, as it does not involve interest or repayment obligations. Retained earnings enhance financial independence and reduce reliance on external borrowing. However, it is available only when the company is profitable, and excessive retention may dissatisfy shareholders expecting dividends. Despite its limitations, retained earnings strengthen long-term liquidity, stabilize working capital, and demonstrate efficient financial management.

Management Notes

Consequences of Excess or Inadequate Working Capital

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Working Capital Management is crucial for maintaining financial balance in a business. Both excess and inadequate working capital create difficulties. While excess working capital indicates inefficient use of funds, inadequate working capital hampers liquidity and smooth functioning. Hence, maintaining an optimal level of working capital is essential for stability and profitability.

  • Idle Funds and Low Profitability

Excess working capital results in idle funds lying unutilized, which could otherwise generate returns if invested effectively. Funds locked in surplus cash, inventories, or receivables lower profitability as they fail to earn adequate returns. Inadequate working capital, on the other hand, restricts business activities, reduces sales, and impacts profit margins. In both cases, profitability suffers significantly.

  • Poor Operational Efficiency

Inadequate working capital disrupts daily operations, leading to production stoppages, delays in payments, and failure to meet customer demands. On the other hand, excess working capital encourages inefficiency, as surplus liquidity often reduces cost consciousness and financial discipline. Both extremes reduce operational efficiency, affecting productivity, delivery schedules, and overall organizational performance.

  • Weak Creditworthiness

A company with inadequate working capital fails to meet obligations on time, damaging its credit rating and reputation with suppliers and lenders. Conversely, excess working capital suggests poor financial planning, which may reduce investor confidence. In both scenarios, the firm’s ability to raise funds or negotiate favorable credit terms is weakened.

  • Decline in Shareholder Value

Excess working capital reduces profitability and, consequently, dividends, leading to shareholder dissatisfaction. Investors view surplus idle funds as a sign of weak financial management. Inadequate working capital, meanwhile, creates financial instability, lowers earnings, and can even risk insolvency. Both conditions adversely affect shareholder wealth, market reputation, and firm valuation.

  • Increased Risk of Insolvency or Mismanagement

Inadequate working capital may push a company toward insolvency due to the inability to meet short-term obligations. Suppliers may refuse credit, and banks may deny loans. On the other hand, excess working capital may lead to careless spending, poor credit control, and mismanagement. Both conditions expose the firm to financial risks.

  • Missed Growth Opportunities

Firms with inadequate working capital may miss profitable opportunities such as bulk purchasing, expansion projects, or entering new markets due to liquidity shortages. Similarly, firms with excess working capital fail to channel funds into growth-oriented investments, losing competitive advantage. Thus, both extremes restrict the organization’s long-term growth and expansion potential.

  • Loss of Business Opportunities

Inadequate working capital prevents a firm from taking advantage of market opportunities such as sudden bulk orders, favorable raw material prices, or investment in new projects. On the other hand, excess working capital shows funds are locked unnecessarily instead of being used for profitable ventures. In both cases, the business loses chances for growth, innovation, and competitive advantage. A balanced level of working capital ensures that the firm is financially flexible and ready to capitalize on opportunities without missing strategic advantages in a competitive market.

  • Strained Relationships with Stakeholders

Insufficient working capital often causes delays in payments to suppliers, employees, and creditors, creating dissatisfaction and strained relationships. Suppliers may withdraw trade credit, employees may feel insecure, and creditors may demand stricter terms. Conversely, excess working capital indicates weak financial management and may reduce investor trust. Both situations damage stakeholder confidence and goodwill. Maintaining adequate working capital builds trust, improves relationships, and ensures smoother collaboration with stakeholders, which is essential for business continuity, reputation, and long-term partnerships with suppliers, employees, investors, and customers.

  • Reduced Bargaining Power

When working capital is inadequate, businesses are forced to rely heavily on creditors or emergency borrowings, weakening their bargaining power with suppliers and lenders. They may have to accept unfavorable terms, such as higher interest rates or shorter repayment periods. Excess working capital also reduces bargaining power by creating complacency, as the firm may fail to negotiate cost benefits from suppliers due to surplus liquidity. Adequate working capital, on the other hand, provides financial strength and negotiation leverage, enabling the firm to secure better deals, discounts, and favorable credit terms from stakeholders.

  • Inefficient Asset Management

Excess working capital often results in over-investment in current assets such as inventories or receivables, leading to wastage, obsolescence, and higher storage costs. Idle cash may also remain unproductive, reducing return on investment. Inadequate working capital causes under-utilization of assets, as production may be halted due to insufficient raw materials or delays in payments. Both conditions reflect poor asset management and reduce overall efficiency. Properly balanced working capital ensures that assets are used optimally, inventory levels are maintained effectively, and receivables are collected on time, enhancing financial discipline and operational productivity.

  • Adverse Effect on Dividend Policy

A company with inadequate working capital may not be able to distribute sufficient dividends, as profits are tied up in meeting urgent financial obligations. This leads to shareholder dissatisfaction and reduced investor confidence. Excess working capital, on the other hand, often results in low profitability, which also limits dividend payouts. A weak dividend policy adversely affects the firm’s reputation in capital markets and discourages potential investors. Adequate working capital ensures that the company has enough liquidity to balance dividend payments with reinvestment needs, thereby satisfying shareholders and maintaining long-term financial stability.

  • Decline in Market Reputation

Both excess and inadequate working capital harm a firm’s reputation in the market. Inadequate working capital creates an image of financial weakness, leading creditors, suppliers, and investors to doubt the firm’s stability. Excess working capital, on the other hand, indicates inefficiency, poor planning, and inability to utilize funds productively. This perception reduces investor attraction and weakens competitiveness. A strong and balanced working capital position enhances confidence among all stakeholders, improves brand image, and strengthens the firm’s credibility in the market, which is vital for long-term growth and sustainability.

Bangalore North University BBA Notes

Financial Management Bangalore North University BBA SEP 2024-25 3rd Semester Notes

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Unit 1 [Book]
Introduction, Meaning of Finance VIEW
Business Finance VIEW
Finance Functions VIEW
Organization Structure of Finance Department VIEW
Financial Management, Meaning and Objectives of Financial Management VIEW
Financial Decisions, Meaning and Types of Financial Decisions VIEW
Role of a Financial Manager VIEW
Financial Planning, Meaning VIEW
Principles of a Sound Financial Plan VIEW
Steps in Financial Planning VIEW
Factors affecting Financial Plan VIEW
Unit 2 [Book]
Meaning, Need of Time Value of Money VIEW
Future Value (Single Flow, Uneven Flow & Annuity) VIEW
Present Value (Single Flow, Uneven Flow & Annuity) VIEW
Doubling Period VIEW
Unit 3 [Book]
Financing Decision VIEW
Sources of Long–Term Finance VIEW
Meaning of Capital Structure VIEW
Optimum Capital Structure VIEW
Factors Influencing Capital Structure VIEW
Leverages, Meaning VIEW
Types of Leverages:
Operating Leverages VIEW
Financial Leverages VIEW
Combined Leverages VIEW
EBIT-EPS Analysis VIEW
Dividend Decision, Meaning VIEW
Determinants of Dividend Policy VIEW
Types of Dividends VIEW
Bonus Shares VIEW
Unit 4 [Book]
Capital Budgeting, Meaning, Features and Significance VIEW
Steps in Capital Budgeting VIEW
Techniques of Capital Budgeting:
Payback Period VIEW
Accounting Rate of Return VIEW
Net Present Value VIEW
Internal Rate of Return VIEW
Internal Rate of Return under Trial and error Method VIEW
Profitability Index VIEW
Unit 5 [Book]  
Working Capital, Meaning, Concepts of Working Capital VIEW
Significance of Adequate Working Capital VIEW
Consequences of Excess or Inadequate Working Capital VIEW
Determinants of Working Capital Requirements VIEW
Sources of Working Capital VIEW
Problems on Estimation of Working Capital VIEW
Bangalore University BBA Notes

Fundamentals of Costing BU BBA 4th Semester Notes

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Unit 1 [Book]
Meaning and Definition of Cost, Costing VIEW
Features, Objectives, Functions, Scope, Advantages and Limitations of Cost Accounting VIEW
Installation of Costing System VIEW
Essentials of a good Cost Accounting System VIEW
Difference between Cost Accounting and Financial Accounting VIEW
Cost Concepts, Classification of Cost VIEW
Methods and Techniques of Cost Accounting VIEW
Marginal costing and Absorption Costing VIEW
List of Cost Accounting Standards (CAS 1 to CAS 24) VIEW
Classification of Cost VIEW
Elements of Cost VIEW
Cost Sheet VIEW
Presentation of Costing Information in Cost Sheet VIEW
Unit 2 [Book]
Materials: Meaning, Importance and Types of Materials, Direct and Indirect Material VIEW
Materials Control VIEW
Inventory Control VIEW
Material Storage VIEW
Techniques of Inventory Control:
Stock Levels VIEW
Economic Order Quantity (EOQ) VIEW
ABC Analysis VIEW
VED Analysis VIEW
JIT VIEW
Tender and Quotation making and analysis VIEW
Procedure for procurement of Materials, Documentation Involved in Materials Accounting, Invoice, Delivery Challans VIEW
Introduction to E-Procurement, GEM Portal VIEW
CPP (Central Public Procurement) VIEW
e-proc.Karnataka.gov.in VIEW
Debit Note, Credit Note VIEW
Pricing of Material Issues: VIEW
FIFO VIEW
Weighted Average Price and Standard price Methods VIEW
Duties of Store keeper VIEW
Unit 3 [Book]
Introduction Employee Cost / Labour Cost, Types of Labour Cost VIEW
Labour Cost Control VIEW
Time Keeping, Time Booking VIEW
Pay roll Procedure VIEW
Preparation of Pay roll VIEW
Idle Time, Causes, Treatment of Normal and Abnormal Idle Time VIEW
Over Time Causes and Treatment VIEW
Labour Turnover Meaning, Causes VIEW
Effects and Measures Labour Cost Reporting VIEW
Methods of Wage Payment: Time Rate System and Piece Rate System VIEW
Incentive Schemes: Halsey Plan, Rowan Plan VIEW
Labour Hourly Rate VIEW
illustrations on Wage Payment methods and Incentive plans VIEW
Unit 4 [Book]
Introduction, Meaning and Classification of Overheads VIEW
Accounting and Control of Manufacturing Overheads, Estimation and Collection VIEW
Cost Allocation VIEW
Apportionment VIEW
Re-apportionment VIEW
Absorption of Manufacturing Overheads VIEW
Absorption of Service Overheads VIEW
Treatment of Over and Under absorption of Overheads VIEW
Methods of Absorption:
Machine Hour Rate VIEW
Distribution of Overheads VIEW
Types of Distribution: Primary and Secondary Distribution VIEW
Repeated & Simultaneous Equation method VIEW
Reporting of Overhead Costs VIEW
Statement of Overhead Distribution Summary VIEW
Unit 5 [Book]
Reasons for differences in Profit /Loss shown by Cost Accounts and Profit/ Loss shown by Financial Accounts VIEW
Preparation of Reconciliation Statement VIEW
Memorandum Reconciliation Account VIEW
Management Notes

Reasons for differences in Profit /Loss shown by Cost Accounts and Profit/ Loss shown by Financial Accounts

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Cost Accounts and Financial Accounts are maintained for different purposes, using different principles and methods. Cost Accounting focuses on recording, analyzing, and controlling internal costs related to production, helping in decision-making. Financial Accounting, on the other hand, is concerned with the overall financial performance and position of the business, prepared as per accounting standards and statutory requirements. Since both systems treat items like overheads, stock valuation, depreciation, and incomes differently, the profit or loss figures may not match. A reconciliation statement is often required to identify and explain these differences systematically.

  • Items Appearing Only in Financial Accounts

Some incomes and expenses are recorded only in financial accounts, not in cost accounts. Examples include interest received, profit or loss on asset sale, penalties, donations, and income from investments. These items affect the profit/loss in financial accounts but are ignored in cost records as they are not related to production. As a result, the net profit in financial accounts may be higher or lower than in cost accounts, depending on whether the net impact of these items is positive or negative.

  • Items Appearing Only in Cost Accounts

Certain notional or imputed costs are considered only in cost accounts, not in financial accounts. For instance, notional rent for owned premises, interest on owner’s capital, or notional salary to the proprietor are included in cost accounts for decision-making and accurate cost estimation. These charges increase the cost of production but are not actual expenses, so they are excluded in financial accounting. This leads to a difference in profit as shown in both sets of accounts.

  • Over- or Under-Absorption of Overheads

In cost accounting, overheads are absorbed based on predetermined rates, which may not match actual expenses incurred. If overheads are over-absorbed, the cost account will show higher profit, and if under-absorbed, it will show lower profit. Financial accounts, however, record actual overheads only. This difference in treatment leads to variations in profit or loss between the two accounting systems and must be adjusted during reconciliation.

  • Valuation of Stock

Cost and financial accounts often use different stock valuation methods. In cost accounts, inventory may be valued at cost of production, while financial accounts may use cost or market value, whichever is lower, following the conservatism principle. Also, the inclusion or exclusion of certain overheads affects stock values. As opening and closing stocks directly affect the cost of goods sold and profit, any valuation difference causes a mismatch in reported profit.

  • Depreciation Methods and Approaches

Depreciation is charged differently in both systems. Financial accounts use methods like Straight Line Method (SLM) or Written Down Value (WDV) as per statutory norms and accounting standards. Cost accounts may use a machine-hour rate or other production-based methods. The amount of depreciation charged affects the total cost and thus the profit or loss reported. Hence, the difference in depreciation treatment results in variation in profit figures between cost and financial accounts.

S. No.

 Reason Type

1

Appropriation Items

Financial Only

2

Notional Charges

Cost Only

3

Overheads Absorption

Method Difference

4

Stock Valuation

Valuation Basis

5

Depreciation Method

Treatment Basis

6

Interest Received

Financial Only

7

Loss on Asset Sale

Financial Only

8

Over-Absorbed Overheads

Cost Difference

9

Under-Absorbed Overheads

Cost Difference

10

Imputed Rent

 Cost Only

11

Income from Investments

Financial Only
12 Donations or Fines

Financial Only
Management Notes

eproc.Karnataka.gov.in, History, Benefits, Users

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eproc.karnataka.gov.in is the official e-Procurement portal of the Government of Karnataka, designed to facilitate transparent, efficient, and streamlined procurement processes for all government departments and public sector undertakings in the state. Launched as part of Karnataka’s e-Governance initiative, the portal enables online tendering, bid submission, evaluation, and contract management. It reduces manual intervention, ensures real-time monitoring, and promotes fair competition among vendors. The system supports procurement of goods, works, and services and complies with government policies and audit requirements. By automating public procurement, eproc.karnataka.gov.in enhances transparency, accountability, and cost-efficiency in the utilization of public resources.

History of e-proc.Karnataka.gov.in:

The e-Procurement initiative in Karnataka began in the early 2000s as part of the state’s broader e-Governance reforms aimed at improving transparency, efficiency, and accountability in public administration. Recognizing inefficiencies in manual procurement methods—such as delays, lack of standardization, and limited vendor participation—the Government of Karnataka launched eproc.karnataka.gov.in in 2007. It was developed with support from the National Informatics Centre (NIC) and became one of the pioneering state-level e-procurement platforms in India.

Over the years, the portal has evolved into a robust and secure platform handling procurement for more than 150 departments, boards, and corporations. The portal supports end-to-end tendering processes, including online bid submission, evaluation, and contract awarding. The system has gained recognition for bringing down procurement costs, improving compliance, and increasing vendor participation, especially for small and medium enterprises. Today, eproc.karnataka.gov.in serves as a model for other states implementing digital procurement reforms.

Benefits of e-proc.Karnataka.gov.in:

  • Enhanced Transparency

The e-Procurement portal of Karnataka ensures transparency by digitizing the entire procurement process—from tender publication to contract award. All procurement details, including tender notices, bid openings, and evaluation reports, are publicly accessible. This openness prevents manipulation, favoritism, and corruption. Real-time notifications and audit trails further build trust among stakeholders. Transparency not only fosters public confidence in government dealings but also encourages more vendors to participate, knowing that the system is fair and objective. Overall, this transparent approach enhances accountability in public spending and ensures equal opportunities for all bidders.

  • Cost Efficiency

By enabling competitive bidding and eliminating middlemen, eproc.karnataka.gov.in ensures cost savings for the government. Vendors from various locations can participate in tenders, increasing competition and driving down prices. Additionally, the system reduces paper use, administrative overheads, and physical infrastructure costs. Pre-set templates, automated evaluations, and centralized controls avoid delays and rework, thereby optimizing operational costs. Over time, departments can compare historical data and make informed purchasing decisions. These cumulative savings contribute significantly to efficient utilization of public funds, making the procurement process not only cost-effective but also financially responsible.

  • Time-Saving Process

The portal significantly reduces procurement cycle times by automating processes such as bid submission, document verification, and evaluation. Unlike manual systems that required weeks for tender processing, eproc.karnataka.gov.in allows tasks to be completed within days. Real-time alerts and online communications eliminate the need for physical meetings and follow-ups. Additionally, the system provides status updates at every stage, helping stakeholders plan better and meet project deadlines. This speed and efficiency lead to faster decision-making and execution, which is particularly beneficial for time-sensitive government projects in infrastructure, health, and emergency response.

  • Wider Vendor Participation

eproc.karnataka.gov.in enables vendors across Karnataka and even from outside the state to access and respond to tenders, removing geographical barriers. Its 24/7 availability, multilingual support, and user-friendly design help small and medium enterprises (SMEs) participate in the bidding process. The platform’s transparency and equal opportunity framework boost vendor confidence, leading to more bids per tender and higher quality competition. Training and helpdesk support are also available to assist new users. As a result, the portal has widened the supplier base and improved the diversity and quality of goods and services procured.

  • Robust Monitoring and Compliance

The system ensures compliance with procurement laws, guidelines, and financial rules by incorporating built-in validations, workflow approvals, and digital records. It offers monitoring tools like dashboards, audit logs, and automated alerts, which help departments track every stage of the procurement cycle. This oversight reduces the chances of errors, fraud, and delays. Additionally, eproc.karnataka.gov.in simplifies reporting for internal audits, performance reviews, and public disclosure requirements. This focus on governance and accountability supports better decision-making and helps establish a procurement culture based on integrity, efficiency, and legal compliance.

Users of eproc.Karnataka.gov.in:

  • Government Departments

All state government departments use the portal to publish tenders, evaluate bids, and finalize contracts. It helps them ensure transparency, control costs, and maintain compliance with procurement laws. From infrastructure to health and education, departments streamline their purchase activities efficiently using the portal.

  • Public Sector Undertakings (PSUs)

PSUs in Karnataka rely on the portal to procure goods, services, and works in a transparent manner. The platform allows them to follow standardized procedures and promote competitive bidding. It reduces administrative burdens and ensures accountability in large-scale public projects and operations.

  • Vendors and Suppliers

Private contractors, service providers, and suppliers use the portal to access tenders and submit bids online. It offers them equal opportunity to compete, reduces paperwork, and increases business prospects. Vendors benefit from fair evaluation, timely payments, and access to a wide market.

  • Auditors and Regulators

Auditors and regulatory bodies use the portal to review procurement activities for transparency, compliance, and financial accountability. The platform’s digital records, audit logs, and tracking features simplify inspections and help ensure that procurement rules and financial norms are properly followed.

  • System Administrators (NIC/IT Team)

Technical teams from NIC and designated IT departments manage the backend, ensure security, update functionalities, and resolve user issues. They maintain smooth operations, manage user access, and support both buyers and vendors in troubleshooting and training to keep the system functional and secure.

Management Notes

CPP (Central Public Procurement), History, Benefits, Users

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Central Public Procurement (CPP) refers to the procurement of goods, services, and works by central government ministries, departments, and public sector undertakings (PSUs) in India. It is governed by standardized procedures to ensure transparency, fairness, and cost-effectiveness in the use of public funds. The Central Public Procurement Portal (CPPP) (https://eprocure.gov.in) is the official platform for publishing tenders, bids, contracts, and related procurement activities. It enables online submission of bids, real-time tracking, and e-tendering processes. CPP promotes efficiency, competition, and accountability in public spending, ensuring that government procurement is conducted in a transparent, fair, and rule-based manner.

History of Central Public Procurement:

Central Public Procurement in India evolved significantly post-independence to support large-scale development activities and infrastructure growth. Initially, procurement processes were decentralized and manual, lacking uniformity across departments. Over time, the need for standardized practices led to the development of procurement guidelines, with agencies like the Directorate General of Supplies and Disposals (DGS&D) playing a central role in managing government purchases. However, issues like inefficiency, lack of transparency, and corruption prompted reforms.

In response, the Government of India launched the Central Public Procurement Portal (CPPP) in 2012 to digitize and centralize tendering activities. This portal made procurement processes more transparent and accessible. The implementation of e-procurement systems, aligned with the General Financial Rules (GFR) and recommendations from international bodies like the World Bank, marked a new era. These reforms brought accountability, improved vendor participation, and established fair and efficient public procurement practices.

Benefits of Central Public Procurement:

  • Transparency and Accountability

Central Public Procurement ensures high levels of transparency by publishing all tenders, bids, and contracts on a centralized platform such as the Central Public Procurement Portal (CPPP). All stakeholders, including vendors and the public, can access procurement-related information, reducing the chances of favoritism or corruption. Digital audit trails, bid opening logs, and online grievance redressal mechanisms enhance accountability. These practices uphold public trust and align with global procurement standards. By mandating fair competition and clearly defined processes, CPP increases confidence in the integrity of government purchases.

  • Efficiency and Timely Execution

CPP introduces automation and standardization through e-tendering and e-procurement systems, reducing time-consuming manual work. Procurement processes such as bid submission, evaluation, and award of contracts are completed more quickly due to digital workflows and real-time notifications. This speeds up project implementation and reduces delays in public service delivery. Templates and predefined terms also help in minimizing ambiguities and repetitive documentation. By increasing speed and reducing bureaucratic hurdles, CPP ensures efficient use of resources, which is crucial for critical projects such as infrastructure, health, and education.

  • Cost Savings and Value for Money

Through competitive bidding, price benchmarking, and centralized purchasing, CPP helps secure better pricing and quality for government departments. E-procurement systems allow multiple vendors to participate, creating competition that leads to lower costs. Standard specifications, reverse auctions, and rate contracts also reduce the risk of inflated prices. CPP helps avoid duplication and wastage by aggregating demand across departments. These factors ensure that public funds are utilized efficiently, providing the best possible value for money, which is critical for managing national budgets and implementing large-scale development programs.

Users of Central Public Procurement:

  • Central Government Ministries and Departments

These are the primary users of the CPP system, utilizing it to procure goods, services, and works required for public projects. Ministries like Defence, Railways, Health, and Education use the platform to ensure transparency, standardization, and efficiency in procurement. By following set guidelines and competitive bidding processes, they optimize resource use and maintain accountability. The portal helps departments track procurement status, manage supplier performance, and ensure compliance with procurement laws and financial rules.

  • Central Public Sector Enterprises (CPSEs)

CPSEs such as ONGC, NTPC, and BHEL use the CPP portal to acquire materials and services needed for operations and infrastructure development. The system provides a centralized and transparent framework to float tenders, evaluate bids, and award contracts. By using e-procurement, CPSEs ensure fairness, reduce procurement cycle time, and save costs. They also benefit from better vendor reach, data management, and audit compliance, all while adhering to guidelines under the General Financial Rules (GFRs).

  • Vendors and Contractors

Private vendors, MSMEs, and large contractors actively use the CPP portal to bid for tenders issued by central ministries and CPSEs. The online system simplifies registration, allows quick access to nationwide tenders, and offers fair and open competition. Vendors can upload documents, receive alerts, and track bid status in real time. This increases their business opportunities, reduces geographical barriers, and promotes inclusion, especially for small enterprises seeking to engage with central government buyers.

  • Regulatory Bodies and Auditors

Entities like the Comptroller and Auditor General (CAG), Central Vigilance Commission (CVC), and internal finance divisions use CPP data for oversight and regulatory checks. The portal’s digital audit trails, procurement logs, and reports help monitor transparency, flag irregularities, and ensure procedural compliance. These bodies ensure that public funds are utilized efficiently and lawfully, maintaining integrity in the procurement system and preventing misuse of authority or manipulation during the procurement lifecycle.

  • IT Administrators and Support Teams

Technical teams, often from NIC or outsourced IT providers, manage the functioning, security, and updates of the CPP portal. They ensure seamless operation, conduct user training, troubleshoot issues, and provide system support to buyers and vendors. These administrators help implement new features, maintain system integrity, and ensure adherence to cybersecurity protocols. Their role is crucial for the day-to-day usability and scalability of the portal across all users and sectors of the central procurement ecosystem.

Bangalore University B.com Notes

Fundamentals of Costing BU B.Com Notes

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Unit 1 [Book]
Meaning and Definition of Cost, Costing VIEW
Features, Objectives, Functions, Scope, Advantages and Limitations of Cost Accounting VIEW
Installation of Costing System VIEW
Essentials of a good Cost Accounting System VIEW
Difference between Cost Accounting and Financial Accounting VIEW
Cost Concepts, Classification of Cost VIEW
Methods and Techniques of Cost Accounting VIEW
Marginal costing and Absorption Costing VIEW
List of Cost Accounting Standards (CAS 1 to CAS 24) VIEW
Classification of Cost VIEW
Elements of Cost VIEW
Cost Sheet VIEW
Presentation of Costing Information in Cost Sheet VIEW
Unit 2 [Book]
Materials: Meaning, Importance and Types of Materials, Direct and Indirect Material VIEW
Materials Control VIEW
Inventory Control VIEW
Material Storage VIEW
Techniques of Inventory Control:
Stock Levels VIEW
Economic Order Quantity (EOQ) VIEW
ABC Analysis VIEW
VED Analysis VIEW
JIT VIEW
Tender and Quotation making and analysis VIEW
Procedure for procurement of Materials, Documentation Involved in Materials Accounting, Invoice, Delivery Challans VIEW
Introduction to E-Procurement, GEM Portal VIEW
CPP (Central Public Procurement) VIEW
e-proc.Karnataka.gov.in VIEW
Debit Note, Credit Note VIEW
Pricing of Material Issues: VIEW
FIFO VIEW
Weighted Average Price and Standard price Methods VIEW
Duties of Store keeper VIEW
Unit 3 [Book]
Introduction Employee Cost / Labour Cost, Types of Labour Cost VIEW
Labour Cost Control VIEW
Time Keeping, Time Booking VIEW
Pay roll Procedure VIEW
Preparation of Pay roll VIEW
Idle Time, Causes, Treatment of Normal and Abnormal Idle Time VIEW
Over Time Causes and Treatment VIEW
Labour Turnover Meaning, Causes VIEW
Effects and Measures Labour Cost Reporting VIEW
Methods of Wage Payment: Time Rate System and Piece Rate System VIEW
Incentive Schemes: Halsey Plan, Rowan Plan VIEW
Labour Hourly Rate VIEW
illustrations on Wage Payment methods and Incentive plans VIEW
Unit 4 [Book]
Introduction, Meaning and Classification of Overheads VIEW
Accounting and Control of Manufacturing Overheads, Estimation and Collection VIEW
Cost Allocation VIEW
Apportionment VIEW
Re-apportionment VIEW
Absorption of Manufacturing Overheads VIEW
Absorption of Service Overheads VIEW
Treatment of Over and Under absorption of Overheads VIEW
Methods of Absorption:
Machine Hour Rate VIEW
Distribution of Overheads VIEW
Types of Distribution: Primary and Secondary Distribution VIEW
Repeated & Simultaneous Equation method VIEW
Reporting of Overhead Costs VIEW
Statement of Overhead Distribution Summary VIEW
Unit 5 [Book]
Reasons for differences in Profit /Loss shown by Cost Accounts and Profit/ Loss shown by Financial Accounts VIEW
Preparation of Reconciliation Statement VIEW
Memorandum Reconciliation Account VIEW
Bangalore City University BBA Notes

Marketing & Financial Analytics Bangalore City University BBA SEP 2024-25 6th Semester Notes

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Bangalore City University BBA Notes

Financial Management Bangalore City University BBA SEP 2024-25 4th Semester Notes

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Unit 1
Financial Management, Meaning and Definition, Scope, Functions and Goals VIEW
Role of Finance Manager VIEW
Financial Planning, Meaning, Need, Importance VIEW
Steps in Financial Planning VIEW
Principles of a Sound Financial plan VIEW
Factors affecting Financial Plan VIEW
Source of Funds, Long and Short-Term Sources of Funds VIEW
Unit 2
Capital Structure, Introduction, Meaning and Definition VIEW
Factors Determining the Capital Structure VIEW
Optimum Capital Structure VIEW
EBIT-EPS Analysis VIEW
Leverages, Meaning, Definition and Types VIEW
Unit 3
Time Value of Money, Introduction, Meaning VIEW
Time Preference of Money VIEW
Techniques of Time Value of Money, Compounding Technique and Discounting Technique VIEW
Unit 4
Capital Budgeting, Introduction, Meaning and Definition, Features, Significance VIEW
Steps in Capital Budgeting Process VIEW
Techniques of Capital Budgeting VIEW
Unit 5
Working Capital, Introduction, Meaning, Definition, Types, Needs VIEW
Sources of Working Capital VIEW
Operating Cycle VIEW
Determinants of Working Capital VIEW
Merits of Adequate Working Capital VIEW
Dangers of Excess and Inadequate Working Capital VIEW
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