Forward Contract

There are no sure things in global markets. Deals that looked good six months ago can quickly turn sour if unforeseen economic and political developments trigger fluctuations in exchange rates or commodity prices Over the years traders have developed tools to cope with these uncertainties. One of this tool is the forward agreements “A contract that commits one party to buy and other to sell a given quantity of an asset for fixed price on specified future date”. In Forward Contracts one of the parties assumes a long position and agrees to buy the underlying asset at a certain future date for a certain price. The specified price is called the delivery price. The contract terms like delivery price, quantity are mutually agreed upon by the parties to contract. No margins are generally payable by any of the parties to the other. Features of Forward Contract • It is negotiated contract between two parties i.e. Forward contract being a bilateral contracts, hence exposed to counterparty risk. • Each Contract is custom designed and hence unique in terms of contract size, expiration date, asset quality, asset type etc. • A contract has to be settled in delivery or cash on expiration date • In case one of two parties wishes to reverse a contract, he has to compulsorily go to the other party. The counter party being in a monopoly situation can command at the price he wants.

Derivative

Derivatives are financial contracts whose value/price is dependent on the behavior of the price of one or more basic underlying asset (often simply known as underlying).These contracts are legally binding agreements, made on trading screen of stock exchange, to buy or sell an asset in future. The asset can be share, index, interest rate, bond ,rupee dollar exchange rate ,sugar , crude oil, soya been, coffee etc. Everybody wants to know about them, everybody wants to talk about them. Derivatives however remain a type of financial instrument that few of us understand and fewer still fully appreciate, although many of us have invested indirectly in derivatives by purchasing mutual funds or participating in a pension plan whose underlying assets include derivative products A simple example of derivative is curd, which is derivative of milk. The price of curd depends upon price of milk which in turn depends upon the demand and supply of milk. Section 2(aa) of Securities Contract (Regulation) Act 1956 defines Derivative as: "Derivative" includes - • “a security derived from a debt instrument, share, loan whether secured or unsecured, risk instrument or contract for differences or any other form of security; • a contract which derives its value from the prices, or index or prices, of underlying securities ”. A working definition of derivative which will help to lay foundation. “A derivative can be defined as a financial instrument whose value depends on (or derives from) the values of other, more basic underlying variables.” ---John C. Hull Derivatives are compared to insurance. Just as you pay an insurance company a premium in order to obtain some protection against a specific event, there are derivative products that have a payoff contingent upon the occurrence of some event for which you must pay a premium in advance. Example Suppose you have a home of Rs. 50, 00,000. You insure this house for premium of Rs 15000 (It is a very risky house!) Now you think about policy (ignoring the house) as an investment. • Suppose the house is fine after 1 year. You have lost the premium of Rs 15000. • Suppose your house is fully damaged and broken in one year . You receive Rs 50,00,0000 on just paying premium of Rs 15,000.If you have bought insurance of any sort you have bought an option. Option is one type of a derivative.

RATIO ANALYSIS

A ratio is used as a yard stick for evaluating the financial position and performance of a firm. Ratio analysis is the process of establishing liquidity, solvency and profitability of a concern. Ratio analysis can be used by the management as a means of checking up on the efficiency with which working capital is being managed in the enterprise. This is the most important tool available to financial analysts for their work. An accounting ratio shows the relationship in mathematical terms between two inter related accounting figures. Ratio analysis simplifies the comprehension of financial statements. Ratio calculated here on the following ways: a) Assessing the liquidity. b) Assessing the solvency position. c) Assessing the efficiency in resource utilization. d) Assessing the profitability of the firm.

MANAGEMENT OF WORKING CAPITAL

Guided by the above criteria, management will use a combination of policies and techniques for the management of working capital. These policies aim at managing the current assets (generally cash and cash equivalents, inventories and debtors) and the short term financing such that cash flows and returns are acceptable.  Cash Management: Identify the cash balance which allows for the business to meet day-to-day expenses, but reduces cash holding costs.  Inventory Management: Identify the level of inventory which allows for uninterrupted production but reduces the investment in raw materials and minimizes re ordering cost and hence increases cash flow ;  Debtors Management :Identify the appropriate credit policy ie credit terms which will attract customers , such that any impact on cash flows and cash conversion cycle will be offset by increased receive and hence return on capital.  Short Financing: Identify the appropriate source of financing; given the cash conversion cycle, the inventory is ideally financed by credit granted by the supplier: however it may be necessary to utilize a bank loan, or to convert “debtors to cash”.  These items are also referred to as circulating capital.

FACTORS DETERMINING WORKING CAPITAL

Working Capital refers to that part of the firm’s capital, which is required for financing short-term or current assets such a cash marketable securities, debtors and inventories. Funds thus, invested in current assets keep revolving fast and are constantly converted into cash and this cash flow out again in exchange for other current assets. Working Capital is also known as revolving or circulating capital or short-term capital.The following factors determine the working capital requirements of a firm --- 1.     Nature of the Industry 2.     Demand of Industry 3.     Cash requirements 4.     Nature of the Business 5.     Manufacturing time 6.     Volume of Sales 7.     Terms of Purchase and Sales 8.     Inventory Turnover 9.     Business Turnover 10. Business Cycle 11. Current Assets requirements 12. Production Cycle 13.     Credit control 14.     Inflation or Price level changes 15.     Profit planning and control 16.     Repayment ability 17.     Cash reserves 18.     Operation efficiency 19.     Change in Technology 20.     Firm’s finance and dividend policy 21.     Attitude towards Risk

Health Tourism in Kerala/Medical tourism in kerala

Kerala, the "God's own country" is ornamental with emerald backwaters, serene beaches and lush green coconut groves. Each year 1000's of travelers from around the world visit here to explore the tranquil beauty of kerala. Recently Kerala, the south Indian state has attained a pride of place in the field of medicine. For many years kerala has been offering ayurvedic treatments and now a days medical tourism is added as another facet of Kerala's tourism industry. With a medical tourism package a medical tourist will get a product where apart from travel package, he / she will be provided medical treatment at the best hospitals. The medical treatment for various ailments are packaged with leisure packages at the best tourist resorts. Kerala state tourism department, in collaboration with the various tour operators, travel agents, hoteliers and with the people who are in the medical field is trying to develop kerala as a world class destination for medical tourism. Presently, kerala tourism is marketing several Ayurveda & health packages and has got tremendous potential to boom in the medical tourism arena. Kerala is famous across the globe for its alternative medical therapies such as Ayurveda. In all the 14 district of kerala one can find quality ayurveda centers. Ayurveda is an ancient form of treatment which enables the patient to rejuvenate and revitalize the mind, body and soul and it has abundant of well trained people who deals in this special form of treatment. Besides Ayurveda, Kerala has got experienced allopathic medical professionals and well equipped hospitals that offer treatments of western standards at an affordable price. Recent years has witnessed that patients of western countries has started choosing Kerala as a destination for treatment of various diseases due to high quality services and lower treatment costs. Kerala is well connected to several Middle East European and Southeast countries by air. Even it has good number of hospitals and renowned specialized doctors in most of the disciplines. Moreover the above said features, the wonderful climate in kerala and the ability of natives to speak English helps Kerala to be the most sought after destination for medical treatment in the entire nation. Patients from around the globe settled for Kerala as because the charges of major surgical procedures like cardiac surgery, dentistry, and cosmetic surgery is very low in compare to develop western countries. Even in Kerala, patients get the countries. The medical professionals of Kerala provides good pre and post-operative care to their patients so that they can have a positive experience. After medical treatments the medical tourists can spend time in high quality resorts or houseboats in kerala.

Chi square test

A chi-squared test, also referred to as chi-square test or test, is any statistical hypothesis test in which the sampling distribution of the test statistic is a chi-squared distribution when the null hypothesis is true, or any in which this is asymptotically true, meaning that the sampling distribution (if the null hypothesis is true) can be made to approximate a chi-squared distribution as closely as desired by making the sample size large enough. The chi-square test is used to determine whether there is a significant difference between the expected frequencies and the observed frequencies in one or more categories. Do the number of individuals or objects that fall in each category differ significantly from the number you would expect? Is this difference between the expected and observed due to sampling error, or is it a real difference?