Business

Due diligence is a relatively common term. Used in business, it broadly refers to the process of investigating and verifying information about a company or investment opportunity. Specifically for compliance teams, it comes up when you consider relationships with new vendors and third parties. Yet it can be difficult to understand what due diligence really is and how best to incorporate it into your procedures. The dictionary gives the term ‘due diligence’ a basic meaning. Depending on the context in which the term is used, it can hold other meanings — especially for corporations, nonprofits and educational institutions. Due diligence as it pertains to business. The definition cites ‘research and analysis of a company or organization done in preparation for a business transaction (such as a corporate merger or purchase of securities).’ What Is Due Diligence? Due diligence is an investigation, audit, or review performed to confirm facts or details of a matter under consideration. In the financial world, due diligence requires an examination of financial records before entering into a proposed transaction with another party. Due diligence became common practice (and a common term) in the United States with the passage of the Securities Act of 1933. With that law, securities dealers and brokers became responsible for fully disclosing material information about the instruments they were selling. Failing to disclose this information to potential investors made dealers and brokers liable for criminal prosecution.1 The writers of the act recognized that requiring full disclosure left dealers and brokers vulnerable to unfair prosecution for failing to disclose a material fact they did not possess or could not have known at the time of sale. Thus, the act included a legal defense: as long as the dealers and brokers exercised “due diligence” when investigating the companies whose equities they were selling, and fully disclosed the results, they could not be held liable for information that was not discovered during the investigation. Due diligence is performed by equity research analysts, fund managers, broker-dealers, individual investors, and companies that are considering acquiring other companies. Due diligence by individual investors is voluntary. However, broker-dealers are legally obligated to conduct due diligence on a security before selling it. Types of Due Diligence Commercial due diligence considers a company’s market share and competitive positioning, including its future prospects and growth opportunities. This will consider the company’s supply chain from vendors to customers, market analysis, sales pipeline, and R&D pipeline. This can also encompass a firm’s overall operations, including management, human resources, and IT. Legal due diligence makes sure that a company has all of its legal, regulatory, and compliance eggs in a row. This includes everything from pending litigation to intellectual property rights to being sure the company was properly incorporated Financial due diligence audits a company’s financial statements and books to make sure that there are no irregularities and that the company is on solid financial footing. Tax due diligence looks at the company’s tax exposure, whether it may owe any back taxes, and where it can reduce its tax burden going forward. Hard vs. Soft Due Diligence Due diligence can be categorized as “hard” or “soft” based on the approach used. Hard due diligence is concerned with the numbers and data found on the financial statements like the balance sheet and income statement. This can entail fundamental analysis and the use of financial ratios to get a grasp on a company’s financial position and make projections into the future. This type of due diligence can also identify red flags or accounting inconsistencies however, Hard due diligence, which is driven by mathematics and legalities, is susceptible to rosy interpretations by eager salespeople. Soft due diligence acts as a counterbalance when the numbers are being manipulated or overemphasized. Soft due diligence is a more qualitative approach that looks at aspects such as the quality of the management, the people within the company, and the loyalty of its customer base. There are indeed many drivers of business success that numbers cannot fully capture, such as employee relationships, corporate culture, and leadership. When M&A deals fail, as an estimated 70%-90% of them do, it is often because the human element is ignored How to Perform Due Diligence for Stocks Step 1: Analyze the Capitalization of the Company – A company’s market capitalization, or total value, indicates how volatile the stock price is, how broad its ownership is, and the potential size of the company’s target markets.Large-cap and mega-cap companies tend to have stable revenue streams and a large, diverse investor base, which tends to lead to less volatility. Mid-cap and small-cap companies typically have greater fluctuations in their stock prices and earnings than large corporations. Step 2: Revenue, Profit, and Margin Trends- The company’s income statement will list its revenue or its net income or profit. That’s the bottom line. It’s important to monitor trends over time in a company’s revenue, operating expenses, profit margins, and return on equity. The company’s profit margin is calculated by dividing its net income by its revenue. It’s best to analyze profit margin over several quarters or years and compare those results to companies within the same industry to gain some perspective. Step 3: Competitors and Industries- Now that you have a feel for how big the company is and how much it earns, it’s time to size up the industry in which it operates and its competition. Every company is defined in part by its competition. Due diligence involves comparing the profit margins of a company with two or three of its competitors. For example, questions to ask are: Is the company a leader in its industry or its specific target markets? Is the company’s industry growing?Performing due diligence on several companies in the same industry can give an investor significant insight into how the industry is performing and which companies have the leading edge in that industry. Step 4: Valuation Multiples- Many ratios and financial metrics are used to evaluate companies, but three of the most useful are the price-to-earnings (P/E) ratio, the price/earnings to growth (PEGs) ratio, and price-to-sales (P/S) ratio. These ratios are already calculated for you on websites such as Yahoo! Finance.As you research ratios for a company,

A take rate is how much money a business makes from a transaction. Take rates help companies understand how well the business is doing. Typically, higher take rates indicate that a company is successful because it can generate more revenue. By keeping a close watch on their take rates, companies can make better business decisions — for example, knowing when to allocate resources to maximize sales or increase their marketing efforts. Although take rates are not new, the term has become more popular with the increase of companies like Airbnb, Shopify, Etsy, and PayPal. However, the card networks like American Express, Mastercard, and Visa have used take rates to define their revenues for many years. What Is Take Rate? Take rate is a formal term for ‘take a cut.’ Before explaining the concept, let us understand the background. Businesses follow many options to sell their products. New companies with less investment sell on third-party websites like Amazon, eBay, etc. When these platforms help generate sales, they expect a portion of the revenue to facilitate the transaction. Apart from serving as a platform linking the buyer and the seller, the websites provide payment services, advertise for the client, and offer reverse logistic services. Three different platforms charge these fees: eCommerce: These marketplaces facilitate transactions, thus reducing businesses’ need to maintain a separate website or app. Examples include Amazon, eBay, etc. Payment providers:  Online shopping has been expedited to a great extent through online payment services. Payment gateways, e-wallets, etc., charge a fee for this. Examples include PayPal, Visa, etc. Service platforms: These marketplaces bring together customers and service providers. They collect a commission for acting as a link. Examples include Uber, Airbnb, etc. The amount that a platform collects as commission depends entirely on its business and revenue model. It varies from website to website and relies on the nature of the service offered. Some marketplaces collect a fixed rate, whereas others collect fixed and variable components. For example, the Airbnb take rate is 3% of the revenue from hosts. They also collect a 14% fee from guests, which is not usually considered the take rate (since the metric only applies to sellers). Another example is that of Amazon. According to the eCommerce Marketplace, the seller has to pay two components – first, $0.99 per unit sold—and secondly, an 8-15% referral fee on the gross merchandise value. How to Calculate Take Rate Take rate calculation involves the following formula given below: The gross merchandise value or GMV is the business’ total sales facilitated through that particular platform or service provider. Calculation Example Airbnb charges a service fee of 3% to hosts. Suppose Ryan is a host who charges Paul $500 for a day’s stay at his house. Here, the GMV from this particular transaction is $500. Ryan would have to pay a fee of $15 (3%) from the amount Paul pays him. Take another example of Amazon. Leonard sells 30 pairs of shoes at $200 each. His revenue is $6000. He is charged a referral fee of 10%. Commission charged by Amazon: ($0.99 x 30) + ($6000 x 10%)  = $629.7 Factors That Affect a Take Rate When it comes to product marketplaces that enable transactions on behalf of third-party sellers, the take rate can differ based on the goods that are offered. As an example, the take rates Amazon charges vary based on the type of product it is selling. That means that the take rate for electronic items is not the same as the take rate for household products. Chargebacks can also reduce a merchant’s take rate as a result of the penalties and fees that the merchant needs to pay back to its customers. Additionally, the more transactions merchants process, the higher their take rates (and vice versa). That’s because many payment processors will offer discounts to companies with high-volume sales. Importance Marketplace take rates are an essential source of revenue for most companies. Lt us consider Amazon. It brings together buyers and sellers. It employs almost a million and a half people around the globe. The income from referral and affiliate marketing enables platforms like Amazon to charge a fee for their services and their role in commerce. Now, there is a general conception that higher take rates are reasonable. A higher commission indicates that the platform can generate higher sales for the seller. But before a seller is ready to pay a higher commission, they should verify if the platform is worth it. Otherwise, giving up a portion of profits for less-than-expected sales will be a loss for the seller. Due to these platforms and payment providers’ competition, they are forced to charge lower rates. A typical example in this regard is eBay. The company charged higher commissions, due to which sellers started opting for newer marketplaces with lower fees, like Etsy. Also, when a payment provider takes a cut, they receive a partial commission. For example, if a seller gets payments through PayPal, but the buyer uses a credit or debit card, a portion of the commission amount collected would be paid to payment networks like Visa, Mastercard, etc. FAQs What is the difference between the take rate and conversion rate? The conversion rate is another significant eCommerce metric that indicates the percentage of people who visit a website converted from visitors to customers. It is calculated as the ratio of total converts to total visitors. The take rate is entirely different as it determines the amount of commission to a third party. Are take rates fixed or variable? Take rates can be fixed or variable, depending on the platform or service provider. Some platforms charge a fixed commission rate for their services, while others employ a variable approach, incorporating factors like transaction value or volume to determine the fee. Do payment providers also have take rates? Yes, payment providers often have take rates in the form of transaction fees. They charge a percentage of the transaction amount for processing payments, making take rates standard in the payment processing industry. It helps them generate revenue for

Working capital represents a company’s ability to pay its current liabilities with its current assets. This figure gives investors an indication of the company’s short-term financial health, capacity to clear its debts within a year, and operational efficiency. Working capital is the difference between a company’s current assets and current liabilities. The challenge here is determining the proper category for the vast array of assets and liabilities on a corporate balance sheet so as to decipher the overall health of a company and its ability to meet its short-term commitments. What Is Working Capital? Working capital, also known as net working capital (NWC), is the difference between a company’s current assets—such as cash, accounts receivable/customers’ unpaid bills, and inventories of raw materials and finished goods—and its current liabilities, such as accounts payable and debts. It’s a commonly used measurement to gauge the short-term health of an organization. Working capital estimates are derived from the array of assets and liabilities on a corporate balance sheet. By only looking at immediate debts and offsetting them with the most liquid of assets, a company can better understand what sort of liquidity it has in the near future.Working capital is also a measure of a company’s operational efficiency and short-term financial health. If a company has substantial positive NWC, then it could have the potential to invest in expansion and grow the company. If a company’s current assets do not exceed its current liabilities, then it may have trouble growing or paying back creditors. It might even go bankrupt. Working Capital Formula To calculate working capital, subtract a company’s current liabilities from its current assets. Both figures can be found in the publicly disclosed financial statements for public companies, though this information may not be readily available for private companies.   Working Capital = Current Assets – Current Liabilities   Working capital is often stated as a dollar figure. For example, say a company has $100,000 of current assets and $30,000 of current liabilities. The company is therefore said to have $70,000 of working capital. This means the company has $70,000 at its disposal in the short term if it needs to raise money for a specific reason.When a working capital calculation is positive, this means the company’s current assets are greater than its current liabilities. The company has more than enough resources to cover its short-term debt, and there is residual cash should all current assets be liquidated to pay this debt.When a working capital calculation is negative, this means the company’s current assets are not enough to pay for all of its current liabilities. The company has more short-term debt than it has short-term resources. Negative working capital is an indicator of poor short-term health, low liquidity, and potential problems paying its debt obligations as they become due.It is worth noting that negative working capital is not always a bad thing; it can be good or bad, depending on the specific business and its stage in its lifecycle; however, prolonged negative working capital can be problematic. Components of Working Capital Current Assets- Current assets are economic benefits that the company expects to receive within the next 12 months. The company has a claim or right to receive the financial benefit, and calculating working capital poses the hypothetical situation of the company liquidating all items below into cash. Cash and Cash Equivalents: All of the money the company has on hand. This includes foreign currency and certain types of investments such as money market accounts with very low risk and very low investment term periods. Inventory: All of the unsold goods being stored. This includes raw materials purchased to manufacture, partially assembled inventory that is in process, and finished goods that have not yet been sold. Accounts Receivable: All of the claims to cash for inventory items sold on credit. This should be included net of any allowance for doubtful payments. Notes Receivable: All of the claims to cash for other agreements, often agreed to through a physically signed agreement. Prepaid Expenses: All of the value for expenses paid in advance. Though it may be difficult to liquidate these in the event of needing cash, they still carry short-term value and are included. Others: Any other short-term asset. An example is some companies may recognize a short-term deferred tax asset that reduces a future liability. Current Liabilities- Current liabilities are simply all debts a company owes or will owe within the next twelve months. The overarching goal of working capital is to understand whether a company will be able to cover all of these debts with the short-term assets it already has on hand. Accounts Payable: All unpaid invoices to vendors for supplies, raw materials, utilities, property taxes, rent, or any other operating expense owed to an outside third party. Credit terms on invoices are often net 30 days, so essentially all invoices are captured here. Wages Payable: All unpaid accrued salary and wages for staff members. Depending on the timing of the company’s payroll, this may only accrue up to one month’s worth of wages (if the company only issues one paycheck per month). Otherwise, these liabilities are very short-term in nature. Current Portion of Long-Term Debt: All short-term payments related to long-term debt. Imagine a company finances its warehouse and owes monthly debt payments on the 10-year debt. The next 12 months of payments are considered short-term debt, while the remaining 9 years of payments are long-term debt. Only 12 months are included when calculating working capital. Accrued Tax Payable: All obligations to government bodies. These may be accruals for tax obligations for filings not due for months; however, these accruals are usually always short-term (due within the next 12 months) in nature. Dividend Payable: All authorized payments to shareholders. A company may decide to decline future dividend payments but must fulfill obligations on already authorized dividends. Unearned Revenue: All capital received in advance of having completed work. Should the company fail to complete the job, it may be forced to return capital back to the client. Limitations of Working Capital Working capital can be very insightful to determine a company’s short-term health. However, there are some downsides to

General trade is the older of the two models, and was established before India opened its markets to organized retailing. Modern trade, on the other hand, is a purely urban phenomenon that grew in popularity between the 1990s and early 2000s, when many corporates and first-generation entrepreneurs entered the retail business. What is General Trade? General trade is a traditional form of trading that includes local standalone stores, roadside stalls, and kiosks that do not have a huge infrastructure and are run by entrepreneurs as opposed to investors or shareholders. Kirana stores in India, Sari-Sari stores in the Philippines, and Mom & Pop shops in the USA are examples of local standalone stores covered by the general trade channel. The most important distinction of general trade from all other types of trade, however, is the fact that sales reps are responsible for taking orders from store owners. As a result, sales reps play a very important role in identifying opportunities, onboarding, and sustaining relations with general store owners.  Advantages of General Trade for Brands Deeper penetration whereby brands are able to reach consumers who live in areas such as older and traditional neighbourhoods, remote villages, and in tier 3 and tier 4 cities where modern stores are not prevalent. As general stores are closer to residential areas than their modern counterparts, they enable consumers to easily buy products without having to travel a long distance. Brands have a strong affinity for stores who have a captive consumer base as it significantly increases chances of offtake. General stores focus on developing interpersonal relationships between store owners and consumers that are mutually beneficial. When store owners comprehend the preferences of consumers, sometimes on a personal level, it helps grow familiarity between retailer and consumer. Also, such understanding pushes store owners to tailor their secondary trade orders in accordance with consumer needs. This readily available consumer loyalty is what brands count on when partnering with general stores. Brands will always look to access as much of the economic strata of consumers as possible. Carrying out distribution via general trade gives them the opportunity to do so; products at general stores are usually non-premium and therefore, may not be as extravagantly priced as in modern stores. Alongside this, bargaining is also a common practice at general stores, making it even more economically feasible for low to middle income consumers to buy your products. Challenges of General Trade Restricted purchasing ability – General stores have a limited budget and prefer buying in smaller batches that don’t always meet the expectations of brands. This sometimes limits the range and definitely limits the amount of items in a general store. This limitation stems from the fact that general stores don’t see as large a cash inflow from business transactions as modern stores do.  Space constraints – General stores that are handed down from generation to generation usually continue business operations within the same space. A space that may be, from lack of funds or foresight, quite limited. This results in both a poorly lit store and compact shelf space for displaying products making it challenging to keep point of sale equipment or materials like a visi-cooler. As a brand, you may find that kind of a setup challenging unless you have a reliable visual merchandising app to document and flag store issues accurately. Pushing new products is hard – Small-time retailers of general stores store a small number of products due to limited buying ability. Persuading them to buy more from your brand is therefore a significant challenge. The consequence of such an approach is that general stores run out of products faster, necessitating frequent deliveries. More frequency means the cost of delivery goes up, making these businesses untenable at times.  Lack of foresight and market insights – Some general store owners don’t have the resources to carry out extensive market research before investing in a product. As such, this leads to poor purchase decisions that bring low returns and debt issues. Environmental hazard: General trade stores, with their sheer number, involve the movement of a large number of goods across huge distances, leading to a huge carbon footprint and pollution. This can directly cause deforestation and increased waste production. A sales enablement tool that also provides the most optimised delivery routes with visibility for both brand and retailer can ensure unhindered and optimised deliveries, reducing carbon emissions. What is Modern Trade? Modern trade is the antithesis of general trade in that it operates on a much bigger scale and infrastructure, with a national or a global presence. All orders placed in modern trade are placed on the company level where specialised teams are responsible for orders or the retail HQ sends the order request to the brand HQ. There is no involvement of sales reps in the ordering process and they are mostly limited to ensuring product availability and visibility at the stores, footfall conversion and capturing feedback, etc.  Advantages of Modern Trade for Brands Stronger infrastructure that allows for huge scalability for brands. Direct negotiation between brand and retail chain eliminates the role of sales reps, making the process booth streamlined and efficient. Brands get access to the entire network of stores under a retail corporation without having to go and visit each and every store. This means that your products will reach more stores with a single agreement, translating to less effort and more store space.  Higher revenue per retail outlet as modern stores are more spacious to accommodate more of your products and have generally better visual merchandising opportunities because of the space. As such, consumers buy more from a huge variety of products, resulting in generally excellent sales.  The ability to sell premium products targeted towards the higher economic strata of consumers. As opposed to general stores, brands with high-priced, premium products find a better footing in modern stores to sell their products. Bigger pack sizes in modern trade owing to the fact that more high-income consumers are likely to visit and buy from modern

Revenue run rate, or sales run rate, is a financial metric that projects current revenue in a given period over a future period of time to give businesses a baseline understanding of future earnings. Companies can use weekly, monthly, or quarterly revenue data to extrapolate their annual income and inform strategic planning. Why you should track your revenue run rate Easily estimate your annual recurring revenue – You can use run rate (while accounting for other SaaS metric base rates) to quickly predict your company’s annual recurring revenue (ARR). Helps investors quickly estimate your growth and top line – Your revenue run rate helps you place growth in context by comparing previous run rates to the current run rate.  Offers a starting point for capacity planning – You can use the revenue run rate to predict your company’s ARR as explained above. Your predicted ARR can then be used to plan the capacity you will need to achieve your revenue goals and fulfill customer expectations. Simplifies continuous planning – Run rate is easy to calculate regularly, making it a very useful metric for a SaaS company’s continuous planning efforts. Using the revenue run rate to measure how growth affects revenue forecasts can help you adjust your business plans and revenue goals on a rolling basis. How to calculate the revenue run rate Revenue Run Rate = Total Revenue during the most current Time Period * the number of those Time Periods in one year Example of a revenue run rate calculation You can calculate revenue run rate using different time periods, including weeks, months, and quarters. Here’s a simple example of calculating a company’s revenue run rate using two different periods:  the calculations using different time periods produced different results. This is because the revenue run rate is heavily influenced by any revenue trends during the base period used for the calculation. Generally, the longer the time period, the more those trends tend to smooth out. How Revenue Run Rate and Annual Recurring Revenue (ARR) Are Different Since the revenue run rate is an annualized revenue projection, it is often confused with the annual recurring revenue (ARR). But they are different metrics. The annual recurring revenue (ARR) is the total annual contract value (ACV) of subscriptions in a SaaS business. In other words, it only accounts for revenue you can reasonably assume due to customer contracts. ARR is more commonly used than revenue run rate since it is a more stable predictor of revenue. However, ARR can’t show the complete picture of your revenue since it excludes one-time purchases and fees. So it is usually only used by companies with a subscription model.Businesses often use ARR to show growth rate over time by comparing each year’s recurring revenue.   What It Is Why Use It Business Type Revenue Run Rate Annual revenue based bookings from subscription sales. Projecting future revenue for non-annual contracts or non-subscription revenue streams. Any business and business model can use the revenue run rate metric. Annual Recurring Revenue Annual revenue based bookings from subscription sales. Gauging the top-line health of the business and forecasting revenue. ARR only applies to SaaS businesses due to subscription models. Drawbacks to using the revenue run rate The revenue run rate isn’t always the most accurate metric for revenue forecasting because it’s based solely on historical data. Some of the drawbacks that make revenue run rate risky to use are that it:   Does not account for seasonality – Monthly and quarterly sales revenue can differ greatly when measured during the high season compared to the low season. Revenue run rate calculations for the same company will vary depending on the time of year in which they are made. Does not account for churn – Churn occurs when customers do not renew subscriptions. Churn rates will reduce your ARR should more customers stop using your services compared to those who sign up. The revenue run rate assumes growth will be constant, which could result in major discrepancies between the run rate and actual revenue captured. Can present unrealistic numbers in tough economic conditions – Revenue run rate cannot anticipate major economic shifts in a turbulent business climate. If sales drop due to an external factor like a recession, the run rate won’t account for that. Assumes capacity remains the same – Run rate assumes your capacity will remain the same. However, you might remodel your capacity based on metrics like the Q factor. Revenue run rates are based on revenue data that is current at the time they are calculated and cannot account for changes not yet made at that time.  Does not account for one-time revenue windfalls –  A significant one-time sale during the period you use to calculate the revenue run rate will skew projections for the entire year resulting in a result that is artificially inflated and thus inaccurate.    Does not account for new business ARR – Your company may be about to introduce a new product or service that will boost sales and revenue. The revenue run rate can’t account for this future increase and its predictions may fall short of real revenue growth. When to use the revenue run rate When you’re trying to secure funding for a new company – If you haven’t been in business long enough to use alternative metrics, and given the market is stable, the revenue run rate can offer investors a quick picture of your growth prospects. When you are changing strategies – When switching growth strategies, you can use the revenue run rate as a benchmark to gauge whether your changes are working and whether your new plan is feasible. For example, if you’ve restructured your sales team and you see an increase in your revenue run rate, you can be fairly certain your strategy is working to boost your revenue.‍ When you want to provide quick insights to your sales and GTM teams – Run rate is an easy metric that sales and GTM teams can use to assess whether their efforts are in line to meet their revenue quotas and targets. FAQs What is the run rate of a company? Revenue run rate is a method used

Turnaround time (TAT) is the time interval from the time of submission of a process to the time of the completion of the process. It can also be considered as the sum of the time periods spent waiting to get into memory or ready queue, execution on CPU and executing input/output. Turnaround time is an important metric in evaluating the scheduling algorithms of an operating system. What is Turn Around Time (TAT)? Turnaround time (TAT) is the time taken to complete a process. It is measured as the duration between an order request and the task completion (execution). It sapplies to any process, task, operation, or activity but is usually used in manufacturing, computing, or logistics. Many businesses use TAT to assess how fast they can serve their customers. Thus, firms aim for more work done in minimum TAT—customers also want the same thing. Thus, TAT directly correlates with customer satisfaction, market retention, and brand perception. To reduce TAT, companies strategize and implement various ideas and tools. In computing, the firm attempts new algorithms. The term is confused with other similar metrics—lead time, waiting time, etc. Each industry has different terminology. For example, in manufacturing, TAT refers to the time taken for maintenance, upgrade, and fixation. On the other hand, in the context of computing, TAT refers to the duration between submission and the output (result). TAT refers to the duration between order submission and order fulfillment in logistics. Formula The turnaround time formula is as follows: Turnaround Time = Completion Time – Arrival Time Alternatively, it is also calculated as follows: TAT = Burst Time + Waiting Time Example Let us assume that arrival and completion data (in hours) for a process is as follows: P1 (arrival time = 2, completion time = 3) P2 (arrival time = 4, completion time = 6) P3 (arrival time = 6, completion time = 9) P4 (arrival time = 9, completion time = 11) Here, P represents the process. Now, according to the formula, TAT = Completion Time – Arrival Time We apply the formula and deduce values for each process. P1 = 1 P2 = 2 P3 = 3 P4 = 2 Therefore, we get the following collaborative TAT: Collaborative TAT = P1 + P2 + P3 + P4 (1 + 2 + 3 + 2) Collaborative TAT = 8 Now the average TAT is computed as follows: Average TAT = (P1 + P2 + P3 + P4) /4 Average TAT = 8/4 = 2 Thus, the turnaround time is 8 hours, whereas the average turnaround time is 2 hours. Importance The importance of turnaround time is as follows: In business, time is often equated with money; the longer the process, the larger the monetary expenditure. In that context, a shorter TAT directly results in increased profits. Services with less TAT help create goodwill and trust among consumers. Customers dislike waiting for long periods.   A business that encounters a longer TAT struggles to survive in a competitive market. To improve TAT, businesses cut unnecessary steps and reduce communication. Simultaneously, these measures also end up cutting costs.  What is Waiting Time (WT)? WT refers to the total time that a process spends while waiting in a ready queue before reaching the CPU. The difference between (time) of the turn around and burst time is known as the waiting time of a process. BT (Burst Time) – It is the total time that a process requires for its overall execution. Thus, TAT – BT = WT Now, we can also easily calculate the Turn Around Time using the Burst Time and the Waiting Time. Here, BT + WT = TAT Turnaround Time And Waiting Time Turnaround time (TAT) is the duration between a process leaving the queue and getting completed. On the other hand, waiting time refers to the total time. Waiting time also includes the time spent in the queue. TAT affects the speed of the output device or channel. In contrast, waiting time does not affect the output speed. For the same process, an algorithm can produce multiple TATs. In contrast, algorithms cannot alter the waiting time. Turnaround Time vs Lead Time vs Throughput Turnaround time (TAT) defines a job’s total amount of time. On the other hand, the lead time is the gap between the order placement and delivery. In contrast, throughput is a data processing unit. The turnaround and the lead are measured in time units. On the contrary, throughput is the rate at which a company can offer services or manufacture products. A company will always seek to improve its turnaround and lead time by reducing it. On the other hand, businesses try to increase their throughput. When a business reduces TAT or lead times, customers are happier (they have to wait less). In comparison, when a business increases throughput, it generates more revenue. FAQs How to calculate the average turnaround time? there are five processes. First, TAT for each process is calculated. Then, the individual TATs are summed up and divided by the frequency of the complete process. How to improve turnaround time? TAT can be improved by taking these measures:– Plan ahead.– Work on post-TAT reporting.– Induce better communication and transparency.– Make quick management decisions during the turnaround.– Vertical integration. What is the turnaround time for shipping? TAT is referred to as vessel turnaround time (VTT) in shipping. VTT is the duration between a vessel’s arrival and departure (from a port). Thus, VTT measures the time a vessel spends at a particular port. TAT is the time between placing an order and package delivery. Practice area’s of B K Goyal & Co LLP Income Tax Return Filing | Income Tax Appeal | Income Tax Notice | GST Registration | GST Return Filing | FSSAI Registration | Company Registration | Company Audit | Company Annual Compliance | Income Tax Audit | Nidhi Company Registration| LLP Registration | Accounting in India | NGO Registration | NGO Audit | ESG | BRSR | Private Security Agency | Udyam Registration | Trademark Registration | Copyright Registration | Patent Registration | Import Export Code | Forensic Accounting

Banks and Banking Institutions are critical to a country’s development. Banks are economic actors, and they, like other sectors, are subject to hazardous operations. A bank auditor examines the banking sector’s services during a Banking Audit. A Bank Auditor is defined as an accounting professional who evaluates the procedure. Audits of credit unions or banks might be either external or internal. One of the most important aspects of a bank audit is Revenue Leakage. Some banks undertake it individually, while others include it as part of a Concurrent Audit, Statutory Audit, or Internal Audit before beginning the audit.  Audit of Bank An Audit of Banking is a process that inspects an institution’s financial stability to guarantee that the rules and regulations are followed in accordance with the legislation. Banking companies are audited by a bank auditor. The goal of a banking company audit is to ensure compliance. The goal of a bank audit is to determine if the institutions’ financial activities are lawful, fair, and complete. The primary goal of a bank audit is to undertake an impartial examination of the bank’s performance, information systems, and controls. To obtain the findings, the system must be subjected to a number of tests, and auditors can recommend some possible corrective steps that the institution could do to improve its performance. Regulatory and financial reports are examined to see if they were properly submitted. Tests are performed to discover transactions that are incomplete, incorrect, or unauthorized. Control testing is a means of determining whether or not the bank is being operated properly and effectively. Bank Audits of Various Types Bank audits are classified into several forms, including risk-based internal audits, statutory audits, and tax audits, stock audits, credit audits, RBI inspection system audits, forensic audits, concurrent audits, snap audits, and foreign exchange audits. However, the following three types are mostly prevailing and common: Concurrent Audit Internal Audit or Information Systems Audit Statutory Audit Let us discuss them one by one in detail. Concurrent Audit: Concurrent audit refers to the study or audit of a transaction while it is currently taking place. Features of Concurrent Audit: The following are the features of Concurrent Audits: Synchronous Audit: A concurrent audit is one that occurs throughout the year. Monthly Basis: Concurrent audits are performed on a monthly basis by external auditors, often Chartered Accountants. Daily Transaction Evaluation– Concurrent audits assess and check the transactions that occur on a daily basis to ensure consistency. Purpose of Concurrent Audit: Concurrent auditing ensures the smooth flow of work at bank branches and the correction of any errors to avoid the cascade impact that arises from irregularities. Concurrent auditing is a method of assisting branches in order to function smoothly and correcting any mistakes in order to minimize the cascade effect of irregularities instantly at the moment they occur. It aids in the detection of fraud at the formation stage, resulting in the preservation of public funds. Internal Audit or Information Systems Audit: Features of Internal Audit or Information Systems Audit: The following are the features of an Internal Audit or Information Systems Audit: One-on-one Visits: Internal auditors from within the organization visit branches one by one at the location and time specified for auditing. Aspect-centric: Internal audit can be aspect-centric, which means it can focus on any one area/aspect of the branch or the entire spectrum of the branch, depending on the audit program and requirement. Conducted by the organization Itself: Internal audit is carried out by the corporation itself or, in the case of a bank, by the bank itself. Purpose of Internal Audit or Information Systems Audit: Internal control audits are performed to assure the seamless, accurate, and secure flow of information throughout the business via the channels, as well as the security (of information).Internal Control audits are performed to guarantee that new financial software is functional as well as accessible and secure.Information Systems Audit is a new field that has grown in popularity in recent years. With the fast growth of computerization in the banking industry – core banking, ATMs, mobile banking, and internet banking – it is increasingly important to conduct periodic reviews of the operation of these systems. Internal control audits look at information flow, channels, information security, and so forth. It also evaluates and reviews the functionality of new developing financial software as well as their security and access. Audit by Statute Statutory Audit relates to the audit that is mandated by law to be performed by a Statutory Auditor. A statutory audit is a legal requirement imposed by the RBI for banks. The RBI appoints the Statutory Auditor in collaboration with the Institute of Chartered Accountants of India. Features of Statutory Audit: The following are the features of Statutory Audit: Every year, at the end of March or the beginning of April, a Statutory Audit is performed. In banks, the completion of financial years signals the year-end audit i.e. Statutory Audit. Statutory Audit finishes NPA, and hence it is a crucial audit. It should be highlighted that NPA provisions have an impact on the bank’s profitability, as well as the Balance Sheet, Profit & Loss Account, and, ultimately, shareholder dividends. The RBI appoints Statutory Auditors in collaboration with the ICAI to appoint Chartered Accountants for the audit. Purpose of Statutory Audit Statutory audits focus on loans and advances, adherence to PSL requirements, SLR, CRR, and so on, as well as compliance with other statutory norms according to the most recent RBI announcements.Banks conduct multiple transactions on a regular basis, resulting in copious documentation and other formalities that the banks must follow. A contemporaneous audit makes it easier to detect and correct any inconsistencies and non-conformities. This prevents the buildup of irregularities, which may be a major headache for any branch during the end-of-year audit. Concurrent Auditors monitor daily maximum cash balance adherence, KYC requirements, documents connected to loan distribution and loan disbursement in accordance with laws and regulations, income leakage, and so on. Several banks do internal audits in addition to concurrent auditing. With the rapid digitization of the banking industry, information systems audit—a subset of internal

Time to market (TTM) is the total length of time it takes to bring a product from conception to market availability. Companies use time-to-market metrics during new product development (NPD) and new product introduction (NPI) as they strive to gain first-mover advantages (e.g., market share, sales revenue).Time to market (TTM) refers to the amount of time from the moment of conceiving the idea about a product through to launching the final product or service to customers. Everyone involved in the development of the product or service has an impact on the TTM achieved. The concept is most commonly used for new products or services, or new features of existing products and services. The term can also be used for the time for a new marketing campaign to get to market, or for a new process to go live. The concept might occasionally be referred to by the term speed to market (STM). What is time to market? Time to market refers to the duration it takes to bring a product from initial ideation to market delivery. It’s a critical factor in determining the success of your product release.If you move too slowly, you risk falling behind competitors who might capture the market before you do. If you rush, you could exhaust resources trying to push a product onto a market that isn’t ready for it. But if you get the timing right, you’ll be on track for success. What factors impact your time to market? Two main categories of factors affect time to market: those within your control and those beyond it. The factors within your control relate to how you execute bringing a product to market, including the product development process, cross-team coordination, and go-to-market (GTM) strategy. External factors usually related to the market — such as market readiness, health, and competitive risk — are beyond your control. Understanding these differences is crucial when considering time-to-market strategies. In the following sections, we’ll delve deeper into each of these factors and discuss strategies for optimizing them without compromising product quality or customer satisfaction. Why Reducing Time to Market Is So Powerful Understanding time to market helps you create a more seamless development experience for your team. You can reduce the time it takes to launch products into the public, deliver continual value to customers, and build stronger relationships at scale. When you improve TTM, you deliver value to customers faster. This helps you gain a competitive advantage and capture revenue quicker. Developing new products takes valuable time and resources, which you spend upfront. So being able to release your products faster helps offset those costs and recoup your initial investment. Reducing TTM increases your release cadence as well. That helps you build a more consistent and predictable revenue model for your business and reminds customers of your value, which informs their overall satisfaction with your product. Use your understanding of these benefits to refine your product development strategy. This understanding helps you think critically about how your team scales various processes and workflows and helps maximize resource costs for the best return on investment. Improving your time to market makes these processes and workflows more efficient and easy to complete. That efficiency streamlines your developers’ experience and builds a more engaged and collaborative team culture. How time to market offers a competitive advantage In an imaginary market where there was no competition and your audience would be waiting to buy from you whenever you were ready, time to market would be rendered irrelevant. But that’s not reality. There are competitors in all markets, and your success depends not only on impressing your customers, but doing so in a manner that gives you an edge over the other players.If you are late to the market – that is, if your competitors beat you to the market with a new product or service – you’ll need to find a way to overcome that disadvantage. While not impossible, you’ll be playing from behind, and no business wants to be in that spot. Unless your product is so good that it simply can’t be ignored, you may never catch up with the competition that first gained the attention of the relevant customers or clients.With this concept of gaining a competitive advantage at the heart of why time to market matters, it’s easy to see a paradox developing. You want to get to the market quickly to gain an edge on your competitors – but offering the best product on the market is also a competitive advantage. So, something has to give. It’s striking the right balance between getting to the market quickly while still meeting quality and innovation expectations that is central to success with TMM initiatives. Other benefits of improving time to market Explore more opportunities. As your time to market comes down, decision-makers in your organization may see an opportunity to test out more new product and service ideas. If there is only a six-month lead time to take a product to the market, rather than two years, for example, the barrier to trying new things is lowered. With a reduced time and financial investment demanded by each project, more projects can be given the green light. From there, it’s a simple matter of math to see how your organization can benefit – if half of your projects are a hit, and you launch 10 instead of 5 in a given timeframe, you’ll be left with twice as many strong products in your portfolio. Launch on time. Not only does a streamlined time to market process help you beat the competition, but it also helps you time your product launches accurately to meet customer demand. Have a new product that will be a big seller for the holiday season? With strong time to market procedures in place, you can be sure it will be available by November. Or, launching something that is primarily a summer product? Schedule the development and production process so it is available by April or May. When organizations don’t put an emphasis on time to market,

Boosting the visibility of your online store is crucial for enhancing sales and generating more income. Modern brands have realized that direct selling doesn’t always work with customers. They prefer to be informed and engaged regarding the products and services offered. Retailers need to merge their commerce with a content-based approach. By doing so, they can craft eCommerce experiences that are rich in content, leading to higher conversion rates and improved customer retention What is content commerce? Content commerce is more than the buzzword; it’s an innovative approach to eCommerce that integrates relevant, engaging content with product offerings to deliver an immersive, informative shopping experience. It’s about providing your audience with value beyond the products or services you sell. Content commerce means creating and sharing content to boost online sales. It’s like content marketing but for online stores. Brands mix this content with their sales strategies to improve the shopping experience, aiming to get more customers and sales. The key lies in thinking of your content less as a marketing tool and more as a product that you’re offering your customers.  By effectively communicating the benefits of your product through engaging content, you can drive customer engagement, build trust, and ultimately drive sales. Think of a lifestyle blog by a clothing brand that seamlessly features their products in their posts – that’s Content Commerce. Maximizing the benefits of content commerce Content commerce aligns with customer preferences, doubling down on active engagement. Customers no longer passively consume content; they interact, share, and initiate meaningful dialogues. It’s about creating a two-way street that fosters consumer participation and strengthens brand relationships. Driving customer engagement with content commerce Product videos, interactive quizzes, and user-generated content are some of the many tools used in content commerce. Videos, in particular, are growing in importance – with over $78.5 billion being spent on digital video advertising alone in 2023, These elements not only highlight a product’s benefits but also increase time spent on site and foster a sense of community amongst users. This interaction isn’t purely transactional – it enables customers to feel an emotional connection to the product and the brand. Using content commerce, you bring the customer’s focus onto the value proposition. Their purchasing decision is based not just on the product itself but also on the material surrounding it. This newfound customer engagement isn’t just a buzzword; it’s a proven method to increase customer retention and build loyalty. The power of user-generated content User-generated content (UGC) is a powerful ingredient in the content commerce mix. Featuring consumer testimonials, partnered content, or user-made videos, UGC guides potential buyers toward a purchase decision. It furthers trust and credibility, a clear example of consumers advocating for a product they believe in. By integrating UGC into your content commerce strategy, you’re enabling a higher level of customer buy-in and fostering an engaged community. Boosting sales with content commerce Content commerce provides a conversion-friendly ecosystem. It merges editorial content and eCommerce, providing educational and entertaining material that directs the customer’s purchase journey. In other words, your product becomes part of an enjoyable content experience rather than being a standalone entity. The result: increased conversion rates.Personalized content is an essential aspect of content commerce that directly impacts sales. By analyzing customer behavior, you can tailor content to suit their needs and interests better. This personalized experience fosters closer relationships with customers, transforming them into loyal, return customers. Remember, content commerce is not about hard selling; it’s about subtly guiding users toward making a purchase decision while delivering the content they enjoy. Role of analytics in boosting sales Understanding the correlation between content and sales is crucial. The use of analytics can help with this, providing invaluable data that enables you to fine-tune your content strategy. Performance metrics like click-through rates and conversion rates can clearly demonstrate the impact of your content. It’s about steering your strategy based on what has worked best – and remembering that what works best is what resonates with your audience. FAQs What types of content are effective for content-to-commerce strategies? Various types of content can be effective, including product tutorials, reviews, blog posts, social media updates, video content, and user-generated content. The key is to create content that aligns with the target audience’s interests and needs. Can content-to-commerce be applied to both B2C and B2B businesses? Yes, the content-to-commerce approach can be adapted for both B2C and B2B contexts. In B2B, it may involve creating educational content, case studies, and thought leadership pieces to support the purchasing decision-making process. How can personalization enhance content-to-commerce strategies? Personalization involves tailoring content and product recommendations based on individual user preferences and behaviors. It can be implemented through data analysis, AI-driven algorithms, and customer segmentation to provide a more customized shopping experience. 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The Permanent Account Number or PAN is a 10-digit number issued to every individual residing in India. It is an important and mandatory document that a person should have. It helps a person to carry out important work like opening a bank account and tax filing, and it also works as an identity proof. However, there can be situations where a person may wish to opt for PAN Card cancellation. Some reasons among them can be wrong details in the PAN card, loss of the previous card, etc. PAN Card cancellation has become hassle-free and does not require an individual to invest a lot of time in the process. When an individual has more than a single PAN card, it may lead to that person being heavily penalised, or worse, could even be jailed. Since the Government of India has made it mandatory to link one’s Aadhaar with their PAN card, every individual and business entity with more than one PAN issued in their name have been compelled to cancel or surrender their addition PAN cards. This article talks about PAN Card Cancellation with respect to individuals and entities who have more than a one Permanent Account Number (PAN). Consequences of Additional PAN When an individual is in possession of more than one PAN card, they may be penalised as per the law set by the Government of India. According to Section 139A of the Income Tax Act of 1961, an individual is only permitted to hold one single PAN card. This section of the Act talks about the eligibility for obtaining a PAN card. Therefore, an Income Tax Officer has the power to impose a penalty of INR 10,000 on any individual who has more than one PAN card as per Section 272B of the Income Tax Act. However, individuals have been given the opportunity to cancel/ surrender the additional PAN cards by merely visiting the NSDL online portal and complete the Form for PAN corrections. The individual would receive a notification once the Form and payment have been successfully processed. Additionally, one may even surrender/ cancel their additional PAN card by submitting the PAN Correction Form at their nearest NSDL Collection Centre. Once the Form is duly completed, the same may be sent and paid for to the Assessing Officer of the respective jurisdiction. Online Cancellation Process Step 1: Visit the official NSDL web portal. Step 2: Click on the Services tab and select the option of PAN. Step 3: Under the Change/ Correction in PAN data, click on the option to Apply. Step 4: Click on Application Type. From the drop-down menu, click on the Changes or Correction in existing PAN Data/ Reprint of PAN Card (No changes in existing PAN Data) option. Step 5: From the Category drop-down menu, click on Individual. Step 6: Fill the given Form with appropriate details and click on the Submit icon. After the Form has been submitted successfully, the request will be registered, and a token number would be generated. This token number would be sent on the Email Address that was provided in the application. Step 7: It is recommended to take a note of the token number for future references. Continue further by clicking on the Continue with PAN Application Form icon given below the page. Step 8: The user would be re-directed to a new webpage. On the top of the displayed page, click on the Submit scanned images through e-Sign option. Step 9: On the bottom left corner of the page, the user will be required to mention the PAN number that they want to retain. Step 10: Then, the user has to fill the Form with personal details including their contact number. Step 11: Below the next page, the user would be required to mention the additional PAN cards and the details that they want to surrender. After doing so, click on the Next icon. Step 12: On the next page, select the appropriate Proof of Identity along with Residence Address and Date of Birth as required. Step 13: The user would then be required to upload scanned images of their photograph along with authorising signatures and relevant documents. The individual must sign the acknowledgement receipt or must be approved by authorised signatories in order to request for surrender of PAN. For example, a Director is an authorised signatory in the case of surrender of PAN by a Company. On the other hand, for a Partnership Firm/ LLP, an authorised signatory would be a partner. Step 14: The user will be able to preview their application form once they have submitted their details successfully. The user is required to verify the details and make corrections, if necessary, and proceed to make the payment. Step 15: The user has to make the necessary payment via Debit Card, Credit Card, Internet Banking or Demand Draft. Step 16: Once the payment has been successful, the user will be able to download a soft copy of the payment acknowledgement. This payment receipt has to be saved and printed for future references and also, stands as a proof of payment. Step 17: The user has to send a printed copy of the acknowledgement to the National Securities Depository Limited eGovernment along with two attached photographs of the user. Step 18: Before the receipt is sent out; the envelope has to be labelled under Application for PAN Cancellation along with the Acknowledgment Number. Step 19: Post the signed acknowledgement (along with the Demand Draft if that payment option was chosen) to the address below. NSDL e-Gov at ‘Income Tax PAN Services Unit,NSDL e-Governance Infrastructure Limited,5th Floor, Mantri Sterling,Plot No. 341, Survey No. 997/8,Model Colony, Near Deep Bungalow Chowk,Pune – 411 016 Surrendering PAN of Deceased Once a PAN card holder passes away, the relatives of the deceased individual are required to write a letter to the Income Tax Officer who presides over the respective jurisdiction. The letter must comprise of the reason for surrender (here, it is the death of the PAN card holder)  and the death certificate of the deceased. Other vital information such as the Name, PAN Card Number, Date of Birth and so on are to be mentioned in the letter. The same process of surrendering PAN card is applicable in the case of the demise of