Financial Modeling

Subject : Financial Modelling

Subject Code : UGB317

Lecturer : Ms Dharaminder Kaur Chahal

TOPICS

1 Costing

2 CVP analysis

3 Budgeting

4 Risk and Return

5 Investment Appraisal

6 Capital Structure

7 Financial Instruments

8 Standard Costing and Variance Analysis

9 Working Capital Management

Chapter 1: Costing

Definition

This is a technique and processes of ascertaining costs, the classifying, recording and appropriate allocation of expenditure for the determination of the costs of products or services, the relation of these costs with sales values and the ascertainment of profitability.

Overheads

• Allocation

This is the term used, where overhead cost items are charged to a specific cost centre, without the need for any estimating procedure.

• Apportionment

This occurs when the total value of an overhead item is shared between two or more cost centre. The apportionment basis used must reflect the benefit extracted by a cost centre.

• Re-apportionment

Re-apportionment occurs when service cost centre overheads are charged to user cost centre. This will always be in proportion to the extend of service provided.

• Absorption

This is the item used when overhead costs are charged into cost units from the production cost centre.