Financial knowledge

Debit and credit bookkeeping

2. Debit and credit bookkeeping refers to a double entry bookkeeping method that takes the accounting equation as the accounting principle and borrows and credits as the accounting symbol to reflect the increase and decrease of economic business. With the development of commodity economy, debit and credit bookkeeping method has been widely used. The object of bookkeeping is no longer limited to creditor’s rights and debt relations, but expanded to record the change of increase and decrease of property materials and calculate operating profit and loss. Under the debit and credit bookkeeping method, the structure of all accounts is debit on the left side and credit on the right side, but the increase and decrease nature of debit and credit reflecting the changes in the quantity of accounting elements is not fixed. Accounts of different nature, the debit and credit registered content is different, the structure of each account is explained below. (1) Structure of Asset Account In an asset account, the debit side records the increase in assets and the credit side records the decrease in assets. During the same accounting period (year, month), the total amount of debits recorded is called the current amount of debits incurred, the total of credits recorded is called the current amount of credits incurred, at the end of each accounting period debits and credits incurred are compared, the difference is called the ending balance. The ending balance of an asset account is usually on the debit side. The ending balance of asset class account according to the following formula: ending balance (debit) = beginning balance ten debit the amount incurred in current credit amount in current account (2) liabilities and owners’ equity account of the structure of the liabilities and owners’ equity account structure is the opposite of assets accounts, the credit record an increase in liabilities and owners’ equity; The debit records the reduction in liability and owner’s equity, and the ending balance is generally credited. The ending balance of the liability account and owners’ equity account can be calculated according to the following formula: Ending balance (credit) = beginning balance ten current amount of credits incurred – current amount of debits incurred

Conclusion:

• As assets increase, liabilities and equity decrease
• A loan is a decrease in assets and an increase in liabilities and equity

Profit and loss balance

• Definition: Profit and loss equalization refers to the amount included in the subscription or redemption of fund shares calculated according to the ratio of undistributed fund net income (or accumulated fund net loss) to the net value of the fund. The profit and loss equalization is recognized on the fund subscription confirmation date or fund redemption confirmation date and is fully transferred to the undistributed fund net income (or accumulated fund net loss) at the end of the period.

The convertible bond

• Definition: A Convertible Bond, Convertible Bond, is one in which the bondholder converts the Bond into common stock of a company at a price agreed upon at the time of issue. Simply put, it is essentially a bond, and the difference with ordinary bonds is: the normal bond borrows money, the agreement of interest each year. But convertible bonds come with an option to convert the bond into shares in the issuing company. Because of this option, the coupon is usually very low. Therefore, we can think of a convertible bond as a normal bond and use the interest to buy an option.

• Relevant provisions

  • Downward revision to share price clause

  The core of downward correction is that when the closing price of at least 15 trading days in 30 consecutive trading days is lower than 80% of the current conversion price (some convertible bonds are 90%, see the prospectus for the specific content), the listed company has the right to lower the conversion price. It is important to note here that the company has the right to lower the convertible price, but does not have to. Because the conversion price is too low will lead to the conversion of too many shares, harm the interests of the original shareholders. So in order to protect the interests of the original shareholders and prevent the new eat too ugly, in terms of lower price, and puts forward some requirements, such as more than two-thirds of the voting power of the pass, such as fixed transfer price is not lower than The Times of shareholders’ general meeting after 20 trading days before the company average stock trading and the previous session’s average stock trading company, For example, the corrected conversion price shall not be lower than the latest audited net asset value per share and par value of the stock. Talked about a pile, the core is to protect the interests of the original shareholders, certain circumstances under the transfer of stock prices must be lowered, but do not lower too hard. One point that must be noted here is the revised: the transfer price shall not be lower than the latest audited net asset value per share and par value of the stock. Let me explain this sentence by introducing an indicator: If the current net conversion ratio is <= 1, it means that there is no room for downward adjustment of the conversion price (of course, the passive downward adjustment of the conversion price caused by dividend transfer and other reasons will not be affected). This point must pay attention to, do not see the stock price for a long time below the transfer price of the silly, you know, in this case, you have to wait for that TA will never come.

  • Back to the sales terms

  During the last period of time (different convertible bonds), if the closing price of the stock is less than 70% of the convertible price of the current period in any 30 consecutive trading days, the convertible bond holder has the right to sell his convertible bond back to the Company.

  • Compulsory redemption clause

  The mandatory redemption clause will be triggered by two conditions. One is that the closing price of the stock shall not be lower than 130% of the current convertible share price for at least 15 trading days out of 30 consecutive trading days, and the other is that the unconverted balance of convertible bonds is less than 30 million yuan.

The above content was extracted from the wechat official account “Surplus grain of the rich family”.

Discount rate and discount rate

The discount rate

• Definition: A discount rate is the rate at which expected future earnings are discounted to present value. The capitalization rate and capitalization or reduction rate are usually ratios that convert expected future earnings to present value indefinitely. The discount rate of fixed assets purchased by installment is essentially the necessary rate of return of suppliers.
• Calculation formula:

The simplest way to determine the discount rate is to determine the interest rate of risk-free investment varieties in the current market. (such as Yu ‘ebao and other baby products, goods base, etc.)

The discount rate

• Concept: The discount rate is the interest rate used to change future payments to present value, or the interest rate used is deducted by the bank in advance when the holder asks the bank to cash in a note that is not due. This discount rate also refers to the rediscount rate, whereby member banks pledge discounted bills as collateral for the interest they pay to borrow from the central bank.
• Calculation formula: discount rate = discounted interest/note face value 100%

The difference between

1. The calculation process is different. The discount rate is the internal discount rate, which is the rate after deducting the discount interest. And the discount rate is the plus rate, which is the rate at which you pay interest at maturity.
2. The discount rate is mainly used in the bill acceptance discount; The discount rate is widely used in all aspects of corporate financial management, such as financing decisions, investment decisions and income distribution.

Mortgage and pledge difference

• The fundamental difference between pledge and mortgage is whether to transfer the possession of secured property.

The mortgage does not transfer the form of possession of the mortgaged property, and the mortgagor is still responsible for the custody of the mortgaged property; The pledgee is responsible for the custody of the pledges. Generally speaking, the mortgagor shall be liable for the damage or value reduction of the mortgaged property, while the pledgee shall be liable for the damage or value reduction of the mortgaged property. The creditor does not have the right to dispose the mortgaged property directly, so it needs to complete the disposal of the mortgaged property after negotiation with the mortgagor or judgment by the court through litigation. The pledgee can dispose the pledgings beyond the time specified in the contract without negotiation or judgment by the court.