Mayuresh Joshi of Angel Broking told CNBC-TV18, “The NFBC space had got heated up, and the valuations likely had been trading at average imply highs. Having said that, probably for the sector as a whole, when you have the distinctive sub-segments come into play, within the NBFC area itself, there are housing finance businesses; there are rural gadget finance corporations.
You have, in all likelihood, got the other set of NBFCs that also cater to the microfinance part itself. But a large run-up had likely happened onto those stocks, and somewhere, the valuations, in all likelihood, were searching on the better facet. But having stated that, selectively, within the NBFC space, housing space as an instance, something like a Dewan Housing, if it corrects similarly, incrementally a few a part of your money can pass into this stock due to the fact the kind of money that they have in all likelihood raised, the type of leverage they could deliver over the next few years can be pretty sizeable. Our very own sense is 21 percentage profits increase now ruled out. So Dewan Housing, in all likelihood, seems very interesting within the housing area on similarly declines.
Rural financing companies Housing appearance dips very promising at this point Corporation of time. With excellent monsoons anticipated to come via and expectancies of appropriate discretionary spending from the rural aspect, they will possibly get a massive quantity of offtake in terms of call for Agri equipment, seeds, and fertilizers on and so on. So once more selectively organizations like Mahindra and Mahindra Financial Services that have probably pronounced asset first-class to the song of the eight-nine percentage even touching double digits over the last few quarters,
That ache can very well preserve for the subsequent 2-three quarters. But once more searching in the manner the authorities are transferring and expectancies of the ex-chequer inside the subsequent Budget being more rural-friendly and rural targeted, those companies must also do well. So any decline selectively inside these areas itself, a backside up approach can be followed.” list the different types of corporations.
Most CEOs, especially in small and mid-size enterprises, come from operational or sales backgrounds. They have often gained some knowledge of finance and accounting through their careers, but only to the extent necessary. But as the CEO, they must make judgments about the performance and competence of the accountants as well as the operations and sales managers.
So, how does the diligent CEO evaluate the finance and accounting functions in his company? All too often, the CEO assigns a qualitative value based on the quantitative message. In other words, if the Controller delivers a positive, upbeat financial report, the CEO will have positive feelings toward the Controller. And if the Controller delivers a bleak message, the CEO will have a negative reaction to the person. Unfortunately, “shooting the messenger” is not at all uncommon.
The dangers inherent in this approach should be obvious. The Controller (or CFO, bookkeeper, whoever) may realize that to protect their career, they need to make the numbers look better than they really are. They need to draw attention away from negative matters and focus on positive matters. This raises the probability that important issues won’t get the attention they deserve. It also raises the probability that good people will be lost for the wrong reasons.
The CEOs of large public companies have a big advantage in evaluating the finance department’s performance. They have the audit committee of the board of directors, the auditors, the SEC, Wall Street analysts, and public shareholders giving them feedback. In smaller businesses, however, CEOs need to develop their own methods and processes to evaluate their financial managers’ performance.
Here are a few suggestions for the small business CEO
Timely and Accurate Financial Reports
The chances are that you have been advised that you should insist on “timely and accurate” financial reports from your accounting group at some point in your career. Unfortunately, you are probably a perfect judge of what is timely, but you may not be nearly as good a judge of what is accurate. Certainly, you don’t have the time to test the recording of transactions and to verify the accuracy of reports, but there are some things that you can and should do.
- Insist that financial reports include comparisons over several periods. This will allow you to judge the consistency of recording and reporting transactions.
- Make sure that all anomalies are explained.
- Recurring expenses such as rents and utilities should be reported in the appropriate period. An explanation that – “there are two rents in April because we paid May early” – is unacceptable. The May rent should be reported as a May expense.
- Occasionally, ask to be reminded about the company’s policies for recording revenues, capitalizing costs, etc.
Beyond Monthly Financial Reports
You should expect to get information from your accounting and finance groups daily, not just when monthly financial reports are due. Some good examples are:
- Daily cash balance reports.
- Accounts receivable collection updates.
- Cash flow forecasts (cash requirements)
- Significant or unusual transactions.
Consistent Work Habits
We’ve all known people who took it easy for weeks, then pulled an all-nighter to meet a deadline. Such inconsistent work habits are strong indicators that the individual is not attentive to processes. It also sharply raises the probability of errors in the frantic last-minute activities.
Willingness to Be Controversial
As the CEO, you need to make it very clear to the finance/accounting managers that you expect frank and honest information and that they will not be victims of “shoot the messenger” thinking. Once that assurance is given, your financial managers should be an integral part of your company’s management team. They should not be reluctant to express their opinions and concerns to you or other department leaders.
We created Finance For Business Owners to help business owners, CEOs, and other non-financial managers gain a better perspective and understanding of the financial side of the business. With our affiliate, The Fidelis Consulting Group, we created a series of 10 – 15-minute presentations and short articles to help business leaders better understand financial issues and incorporate that understanding into their daily operations and strategic planning.