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What is Indirect method
Indirect method is what you would probably be familiar with. It requires a lot less information to produce it and hence can be argued to be easier method.
With indirect method, profit before taxation (or profit before interest and tax) is taken from income statement and adjusted for non-cash items (that is depreciation, provisions). It's also adjusted for loss or profit on disposal of assets. Other items which will be classified under financing or investing are also adjusted for. Lastly adjustments are made for changes during the period in inventories, trade and other receivables and payables. This requires looking at current and prior year's statement of financial position.
Explain the term- quality of decisions Performance and business risk This is focussed on " quality of decisions ". The comparison of an organisations performance with t
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How would you judge the potential profit of Bajaj Electronics on the first year of sales to Booth Plastics and give your views to increase the profit.
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Q. Show the Disadvantages of adjusted discount rate? (1) The risk premium rates resolute under this method are arbitrary. Therefore this method mayn't give objective results.
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