- It is an absolutely risk free investment, since it is issued by the sovereign government. Hence, they are called gilt-edged securities meaning that they are covered by gold
- You can get the highest rate of interest since the yield rates are determined in the market.
- Since these bonds are tradable in the secondary market, you can obtain instant liquidity by selling them in the market.
- All receipts of interest and maturity proceeds are fully repatriable.
- You could also have a joint investment with some other person or persons. Hence, it is a very good way to share your investments with loved persons.
- You are not subject to further taxation, since a withholding tax of 10 percent is charged at source.
- No stamp duty is payable on these bonds.
- You can get the best service from the CBSL which maintains your investment in its state of the art, Scripless Security Settlement System and the fully automated Central Depository System (CDS).
Wednesday, October 26, 2011
What Benefits Can I Derive by Investing in Treasury Bonds
What Types of Treasury Bills Foreign Investors Can Purchase?
- Eligible foreign investors are permitted to purchase Treasury bills issued by the Government of Sri Lanka from direct placement/primary auctions through PDs
- Foreign investors are permitted to enter into Repo/Reverse Repo transactions with eligible investors only, using Treasury bills purchased under this scheme as collateral.
- Foreign investors are permitted sell Treasury bills in the secondary market at any time.
How Can An Investor Apply for Treasury Bills?
- You can purchase Treasury bills at any time through Primary Dealers (PDs) or Licensed Commercial Banks (LCBs) registered with the CBSL. PDs are the institutions appointed by the CBSL for trading in Government securities. Contact details of these institutions are given below.
- You can purchase Treasury bills by sending bids to the primary auctions through PDs or through direct placements.
- In order to make arrangement for fund transfers, you can advise your own bank to open a Rupee account named “Treasury bill Investment External Rupee Account - 2 (TIERA - 2)” in an LCB in
- After completing the transaction, your agent (LCB/PD) will open a security account for you in the CDS maintained by the CBSL. This account is debited /credited simultaneously based on your tradings in the market.
Wednesday, June 22, 2011
Financial Statement Analysis Ratios
Financial ratios quantify many aspects of a business and are an integral part of financial statement analysis. To compare the company’s performance, position and stability we have used several ratios. According to the financial aspects of the business we have categorize the ratios as below.
- Profitability Ratios - measure the firm's use of its assets and control of its expenses to generate an acceptable rate of return.
- Return on investment - performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments.
- Liquidity Ratios - measure the availability of cash to pay debt.
- Efficiency Ratios - used to analyze how well a company uses its assets and liabilities internally.
- Gearing Ratios - measure of financial leverage, demonstrating the degree to which a firm's activities are funded by owner's funds versus creditor's funds.
http://en.wikipedia.org
Gross Profit Rate
Gross margin, Gross profit margin or Gross Profit Rate is the difference between the sales and the production costs excluding overhead, payroll, taxation, and interest payments. Gross margin can be defined as the amount of contribution to the business enterprise, after paying for direct-fixed and direct-variable unit costs, required to cover overheads (fixed commitments) and provide a buffer for unknown items. It expresses the relationship between gross profit and sales revenue. It is a measure of how well each Rupee of a company's revenue is utilized to cover the costs of goods sold.
It can be expressed in absolute terms:
Gross margin = Net Sales - Cost of goods sold + annual sales return
or as the ratio of gross profit to sales revenue, usually in the form of a percentage:
Gross Profit Margin = (Revenue-Cost of goods sold)/Revenue
However in an insurance concern Gross Profit Margin is calculated by dividing underwriting results by the net earned premium.
While net earned premium is the result of gross written primium net of premiums ceded to re- insurers, underwriting results reflect the net earned premium after deducting insurance cliams, transfers to long term ins fund etc.
Formula for Gross Profit Rate
Gross Profit Rate (Year 2009) = Gross Profit * 100
Revenue
Gross Profit Markup
The mathematical relationship between Gross Profit Markup and Gross Profit Margin can be expressed as follows:
Gross Profit Margin (GM) = [Markup/(1 + Markup)]
Thus markup can be defined as an amount added to a cost price in calculating a selling price.
Thus;
Gross Profit Markup = Gross Profit/ Cost of Sales
Gross Profit Markup = Gross Profit * 100
Cost of sales
= Gross Profit * 100
Net Revenue- Gross Profit
Operating Profit Rate
In business, operating margin, operating income margin, operating profit margin or return on sales (ROS) is the ratio of operating income (operating profit) divided by net sales, usually presented in percent.
It is a measurement of what proportion of a company's revenue is left over, before taxes and other indirect costs (such as rent, bonus, interest, etc.), after paying for variable costs of production as wages, raw materials, etc. A good operating margin is needed for a company to be able to pay for its fixed costs, such as interest on debt. A higher operating margin means that the company has less financial risk.
Operating Profit Rate = Operating Profit * 100
Net Revenue
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