Productivity Secrets

Productivity Secrets

Productivity Secrets

7 Productivity Secrets of Sports Champions

One of the main goals of any company is to improve productivity. Increased productivity means higher revenues and a stronger bottom line. So how can you improve productivity in the workplace? In many of the same ways that you improve productivity on the field. Here are what some of the most successful sports figures had to say about how to increase productivity.

1. Understand planning vs. execution.

Football legend Steve Young said, “I was taught early on that I should plan my work and then work my plan. The best strategy in the world won’t be effective if it isn’t backed up with muscle and sweat.”

Setting goals is a necessary first step. But it’s only the first step. Make sure those goals are attainable, and then work to attain them.

Related: Startup Success Equals Strategy Plus Execution

2. You can’t improve what you don’t measure.

If you’re not measuring your performance, you have no benchmark for improvement. Cameron MacMillan, co-founder and COO of Daily Fantasy Sports site Rotogrinders says – when it comes to working with statistics – “Numbers don’t lie; every incremental improvement you make can be measured and compared to previous productivity. A graph of your achievements, with the line going up, is just as good as a pat on the back from the boss.”

3. Stay away from time wasters.

Facebook is perhaps the biggest time suck ever invented. It’s useful for a lot of things, but can also be detrimental to your productivity. Golfer Tiger Woods is quoted as saying, “I can either play golf or play on the internet -- guess which one I chose?”

The fact that he actively chooses to pursue his passion instead of getting caught up in time wasting activities is what makes him such a great golfer. Angry Birds, Wikipedia, and YouTube can wait until after you get home. When you’re working on a project, give your full attention to working on the project. If you let yourself get distracted, things will never get done.

4. Make room for down time.

On the other hand, no one can be productive all day every day. Vince Lombardi, the uber-coach of the Green Bay Packers, told reporters, “I not only plan to win, but also plan for player down time -- it’s a given that has to be factored in. Instead of pulling out my hair in frustration, I just leave some wiggle room in the schedule, so that when it happens I already have a way of dealing with it. That’s why so many coaches go crazy -- they never plan for player down time.”

Down time can mean an accident or unforeseen circumstances that keep you from working. Or it can simply mean taking a breather for a few minutes, and pausing to relax and unwind. If you don’t do the latter, the chances of the former are much greater. Either way, if staying on schedule means working constantly, you’ll find yourself behind schedule very quickly.

Related: 7 Ways to Maximize Downtime

5. Compete against yourself, not against others.

Sasha Trubnikov is a former Olympic shotputter from Russia and now a productivity engineer at Interactive Strategies. How does he keep focus? “I only try to beat my own record. That way I never waste any time getting mad at anyone else or being discouraged.”

A little friendly competition in the workplace can actually help productivity to some degree. Seeing how well others are doing can motivate you to improve your own numbers. But in the long run, comparing yourself to others is detrimental. If you get caught up in the competition, you to lose sight of your actual goals. Concentrating on improving your own performance instead of beating someone else’s will help you focus more on the task at hand and ultimately motivate you to continue doing better.

6. Schedule.

Yankee legend and noted wordsmith Yogi Berra once quipped, “What’s a calendar for if it don’t keep my head empty for other things?”

Now we have more than just desk calendars. We have mobile devices that can store all of our important appointments, deadlines and other events. They can even send us reminders of what we have going on. This allows you to prioritize your tasks and budget your time, without having to be constantly worried about how many tasks and projects you still have coming up. Your calendar will keep you on task, and remind you of what you need to do. That way, you can keep your head clear for the work that’s right in front of you.

7. Don’t be afraid to try.

Hockey legend Wayne Gretzky famously said, “You miss 100 percent of the shots you don’t take.” If you’re afraid to act because you’re afraid to fail, then you end up getting nothing done at all. You’ve failed, before you even began.

Sonja Henie, a Norwegian ice skater who parlayed an Olympic medal into a Hollywood career, is quoted as saying, “I was told I could skate but not act, or act but not skate -- but I wanted to try doing both at the same time. It didn’t scare me; my parents taught me that failure is only a detour, not a wall.”

Learn to embrace those detours. They may hinder your productivity temporarily, but will improve it in the long run. Particularly over those who aren’t taking any shots at all.

The key to productivity is twofold: half planning and half hard work. Between the two, you can do anything you set your mind to. So get out there and give it 110 percent. If you do that, you can knock it out of the park, and win just one for the Gipper.

Skills of Self Made Millionaires

Skills of Self Made Millionaires

Skills of Self Made Millionaires

6 Skills of Self-Made Millionaires That You Should Be Using, Too

Heed the advice of those who have reaped success. Here are six skills used by self-made millionaires that you should be using and building upon each day.

1. Be able to identify fruitful opportunities.

Carlos Slim Helu, Mexican business magnate and philanthropist, said, “When there is a crisis, that’s when some are interested in getting out, and that’s when we are interested in getting in.”

Learn to identify open doors when they appear, then consider the risks and weigh them against potential benefits. An opportunity can be a great one regardless of whether no one or everyone is rushing to grab it -- if no one is, that’s your cue to move forward; if everyone is, that’s your chance to prove you’re better than the rest.

Related: 8 People Just Like You Who Made $1 Million

2. Focus on actions over words.

Actions speak louder than words,” supposedly, and the late Andrew Carnegie agreed. As his career grew, he said, “As I grow older, I pay less attention to what men say. I just watch what they do.”

Understand that a shining business plan or investment presentation means little when you don’t demonstrate the ability to carry out your ideas well. Customers and clients want to see flawless application of your company’s core values and mission statement. Keep this formula in mind when seeking out employees, as well. A perfect resume doesn’t necessarily constitute a perfect employee, if that person can’t properly act on his qualifications and intentions.

3. Maintain a clear vision of success.

“Vision is perhaps our greatest strength... it has kept us alive to the power and continuity of thought through the centuries, it makes us peer into the future and lends shape to the unknown.”

Hong Kong business magnate Li Ka-Shing, the richest person in all of Asia, believes in vision as a motivational tool for success. What does success look like to you? If your answer is just “a lot of money,” this may not be the article for you.

Many people envision success as finally seeing their product on store shelves, making up for initial overhead costs, gaining a certain following or changing the community in which they live. In order to stay on track toward fulfilling your goals, it’s important to maintain a clear vision of what that goal is -- and what things will look like once it’s achieved.

Related: 5 Words Millionaires Understand Better Than Others

4. Never stop learning.

Entrepreneurs who don’t acknowledge the need to constantly learn new things are denying themselves and their businesses the chance to grow. Even once you achieve some degree of success, understand that those around you (even those who are less successful) know something you don’t.

Listen to what others have to say about their experiences. Learn from their achievements and their mistakes. If you don’t want to base your development on other people, try taking a step back and exploring the areas of entrepreneurship you can still improve upon. Elon Musk, founder of PayPal, SpaceX and Tesla Motors, says “that’s the single best piece of advice -- constantly think about how you could be doing things better and questioning yourself.”

5. Get the job done.

This one sounds simple, but you’re likely procrastinating without even knowing it. Those who spend an immense amount of time marketing a business before there’s even a business to advertise are putting off actually building a brand. The same goes for those who spend time attempting to perform Web or graphic design themselves, obsessively organize finances and legal paperwork, and so on.

Even as an entrepreneur, you can’t wear every hat, and it’s often smart to assign tasks that aren’t immediately related to building your business to someone else. Don’t be afraid to ask for help from a small team of employees or some remote freelancers if it means you’ll be able to turn your company into everything you dreamed.

“Getting the job done has been the basis for the success my company has achieved,” said Michael Bloomberg, entrepreneur, investor and former mayor of New York City.

6. Only hire rock stars.

You can’t exemplify greatness if the people who make up your company aren’t great, too. My brother Matthew and I have always made a point of carefully selecting those we hire on to our teams, even if it takes a little extra time. We like people with a heavy determination to GSD (Get Stuff Done).

mobile 25 top

mobile 25 top

mobile 25 top

قائمة تايم لأكثر 50 جهازًا تأثيرًا فى العالم.. أبل تتصدر بآيفون وآيباد وآيبود

كشفت مجلة تايم الأمريكية عن قائمتها لأكثر 50 جهازًا تأثيرًا فى العالم، والتى استطاعت جذب ملايين المستخدمين ومساعدتهم وتسهيل كل شئون حياتهم، إذ تشمل هذه الأجهزة هواتف ذكية وأجهزة لوحية ومكتبية وأجهزة موسيقى، ولا ترتبط بوقت معين أو تاريخ إطلاق محدد، إذ تركز على الأجهزة التى أحدثت ثورة كبيرة عند إطلاقها وزودت بمزايا وتقنيات أبهرت العالم.

1 هاتف أبل "آيفون" الذى مهد الطريق للجيل الحالى من الهواتف الذكية

2

جهاز سونى Trinitron الذى أحدث ثورة عند إطلاقه عام 1968 وغير من مفهوم أجهزة التليفزيون

3

جهاز أبل ماكينتوش

4

جهاز ووكمان التابع لشركة سونى الذى كان بمثابة جهاز الموسيقى الأشهر فى العالم

5

جهاز IBM موديل 5150 الأنجح فى العالم

6

مشغل الموسيقى Victrola والذى الجهاز الأبرز فى المنازل

7

جهاز الراديو ترانزستور Regency TR-1

8

كاميرا كوداك براونى التى كانت تستهدف الأطفال عند إطلاقها لكن صغر حجمها ومزاياها المتعددة رفعت من شعبيتها

9

جهاز آيبود لتشغيل الموسيقى التابع لشركة أبل والذى فاجأت به الشركة العالم لتقنياته ومزاياه المتعددة

10

جهاز Magic Wand الذى أطلقته شركة "هاتشى" والمتخصص فى التخفى من توتر مستخدمه من خلال جلسات الماساج التى يقدمها

11

آلة حاسبة تابعة لشركة كانون كانت مخصصة لرجال الأعمال وطرحت بسعر 345 دولارا عام 1970

12

جهاز فيليبس N1500 VCR

13

جهاز أتارى 2600

14

جهاز US Robotics Sportster 56K Modem للتصال بالإنترنت قبل ظهور أجهزة الراوتر الحديثة

15

جهاز نيتندو للألعاب

16

جهاز جيم بوى شركة نينتندو

17

الآلة الكاتبة التابعة لشركة IBM التى أطلقتها عام 1961

18

جهاز موتورولا Bravo Pager الذى كان أبرز وسائل التواصل قبل ظهور الهواتف الذكية

19

كاميرا JVC اليديوية لتسجيل لفيديوهات

20

هاتف موتورولا Droid الذى ساهم فى زيادة شعبية وانتشار نظام أندرويد

21

جهاز Thinkpad 700C التابع لشركة IBM

22

جهاز تحديد المواقع TomTom GPS

23

جهاز Phonemate 400 للبريد الصوتى

24

هاتف بلاك بيرى 6210 الذى مهد لعصر الهواتف متعددة المزايا والمهام

25

جهاز آيباد التابع لشركة أبل الذى اطلق عام 2010

Meeting Students

Meeting Students

Meeting Students

Meeting Students Where They Are

By Bill Gates  | March 22, 2016

When I was applying to college, I wanted to go to one of the best schools. At the time, I thought of “the best,” as the colleges that were the most selective. I applied to Harvard, Yale, and Princeton—schools whose reputations are burnished as much by the huge numbers of applicants who are denied admission, as the privileged few who are let in.

But over the years I’ve learned that there are many other ways to measure what makes a school great.

Institutions like Harvard (where I ended up going) have an important role to play in higher education. They do amazing research (which is something I support, enthusiastically) and can have their pick of the top students from around the world.

But equally impressive to me are the universities that take on the students who haven’t had a great high school experience. The students who graduate with low GPAs and poor SAT scores and might have trouble getting accepted to college. These students, many of them first-generation college students from low-income backgrounds, know a college degree is the surest path to the middle class. But they are also the ones who are at the highest risk of dropping out.

Our foundation is always looking for universities that have learned how to give these students the support they need to graduate. They are not just opening the door to college for a new generation of students. They are also helping to redefine the future of higher education in the U.S.

Last month, I had the chance to sit down in Seattle with administrators from two outstanding institutions–Johnson C. Smith University and Delaware State University—who are experimenting with exciting new ways to serve these at-risk students.

“We take pride in the fact that we do not cherry-pick our students. You can come to us as you are,” Dr. Harry Williams, president of Delaware State University, located in Dover, Delaware, told me.

Encouraging more low-income and first-generation college students to get college degrees is critical—not just for the students themselves, but for the health of America’s economy. By 2025, two-thirds of all jobs in the US will require education beyond high school. At the current rate the US is producing college graduates, however, the country is expected to face a shortfall of 11 million skilled workers to fill those roles over the next 10 years.

The problem isn’t that not enough students want to go to college. More students are enrolling in higher education programs than ever before. The problem is that too many drop out before completing their degrees, especially students from low-income families. In fact, a student from a wealthy family in the U.S. is eight times more likely to earn a bachelor’s degree by age 24 than a student from a low-income family.

I met one student, Earlee Corbin, from Johnson C. Smith University who is an example of that statistic. He went to college a decade ago on a baseball scholarship, but then dropped out after his freshman year to take care of his father, who was ill, and to work to help support his family. Now 29, he’s back in a night school program to finish his degree while still working full time. The hours are long, but the personal support from his university—from both his professors and other students—is making the difference, he told me.

“They treat us like family. They put us in a position to succeed and the only option we have is to succeed,” he said.

Giving at-risk students a shot to beat the odds is central to the missions of Johnson C. Smith and Delaware State Universities. That commitment is rooted in their histories. Both institutions are historically black universities, founded after the Civil War to provide African-Americans an opportunity for higher education. While the legal barriers that once blocked black students from attending other institutions are now removed, America’s historically black colleges and universities still play an outsized role in providing education to underprivileged students. More than 60 percent of the students they enroll come from low-income backgrounds or are the first in their family to attend college.

Among historically black colleges, Johnson C. Smith University and Delaware State University are two of the most innovative when it comes to recruiting at-risk students, keeping them in school, and giving them the support they need to graduate.

Johnson C. Smith University offers students who don’t meet the GPA or SAT requirements for regular admission the opportunity to apply for an intensive first-year program to help them be successful in college. In addition to looking at the grades and test scores of applicants, the school examines their non-cognitive and meta-cognitive skills—like their problem-solving abilities and perseverance—to determine if they have what it takes to get a degree. The school prides itself on seeing the potential in students other schools may not.

“We put them into a very rigorous program of study and we watch them get to that ‘Aha!” moment. That’s when we know we have them on the right track.” said Dr. Ronald Carter, president of Johnson C. Smith University in Charlotte, North Carolina.

Delaware State University created a personalized guidance program which provides first-year students with mentoring, tutoring, and other resources to help them navigate the often difficult transition to college life.

Both institutions collect and analyze huge amounts of data to track students throughout their college careers. If a student taking a psychology quiz gets a failing grade, it triggers an email or phone call from a counselor to find out what went wrong and how to get that student back on track.

During one point in our conversation, Dr. Williams and his staff shared a chart showing how many students were expected to drop out between their freshman and sophomore years. Using predictive analytics, they have been able to target students who are considered the most likely to drop out—based on SAT scores, financial background, and other factors—and give them the support they need before they encounter a problem.

“The data shows that if we can keep you in college after your first year you have a higher percentage chance of graduating,” Dr. Williams said.

Providing so much personal coaching to students can be expensive, placing increased pressure on already strained higher education budgets. Both schools have made difficult budget cuts, eliminating unpopular majors and thinning administration and staff to help support these programs.

Why not just let the students who can’t make it drop out? Delaware State University staff told me this surprising fact: It actually costs a university more—in lost tuition—to allow a student to drop out than it does to pay for the support needed to help retain that student.

If it makes more financial sense to retain a student than let them drop out, other colleges may soon have a lot to learn from Johnson C. Smith and Delaware State about how to help more students complete their degrees.

For now, both schools are still learning themselves. The graduation rate at Delaware State is 37%, and 42% at Johnson C. Smith. While those rates are up over previous years, and remain higher than other institutions serving underprivileged students, both schools are working hard to boost them further.

I look forward to hearing more about the progress these schools are making in the years ahead. What’s already clear is that their innovative efforts to give more students the opportunity to obtain a college degree have yielded impressive results. They’re not just transforming how colleges operate. They are transforming lives.

How to Become a Millionaire

How to Become a Millionaire

How to Become a Millionaire

Here are the 10 steps that will guarantee you will become a millionaire by 30.

1. Follow the money. In today’s economic environment you cannot save your way to millionaire status. The first step is to focus on increasing your income in increments and repeating that. My income was $3,000 a month and nine years later it was $20,000 a month. Start following the money and it will force you to control revenue and see opportunities.

2. Don’t show off -- show up! I didn’t buy my first luxury watch or car until my businesses and investments were producing multiple secure flows of income. I was still driving a Toyota Camry when I had become a millionaire. Be known for your work ethic, not the trinkets that you buy.

3. Save to invest, don’t save to save. The only reason to save money is to invest it.  Put your saved money into secured, sacred (untouchable) accounts. Never use these accounts for anything, not even an emergency. This will force you to continue to follow step one (increase income). To this day, at least twice a year, I am broke because I always invest my surpluses into ventures I cannot access.

4. Avoid debt that doesn’t pay you. Make it a rule that you never use debt that won’t make you money. I borrowed money for a car only because I knew it could increase my income. Rich people use debt to leverage investments and grow cash flows. Poor people use debt to buy things that make rich people richer.

5. Treat money like a jealous lover. Millions wish for financial freedom, but only those that make it a priority have millions. To get rich and stay rich you will have to make it a priority. Money is like a jealous lover. Ignore it and it will ignore you, or worse, it will leave you for someone who makes it a priority.

Related: LISTEN: How to Make a Million Dollars Online

6. Money doesn’t sleep. Money doesn’t know about clocks, schedules or holidays, and you shouldn’t either. Money loves people that have a great work ethic. When I was 26 years old, I was in retail and the store I worked at closed at 7 p.m. Most times you could find me there at 11 p.m. making an extra sale. Never try to be the smartest or luckiest person -- just make sure you outwork everyone.

7. Poor makes no sense. I have been poor, and it sucks. I have had just enough and that sucks almost as bad. Eliminate any and all ideas that being poor is somehow OK. Bill Gates has said, "If you’re born poor, it’s not your mistake. But if you die poor, it is your mistake."

8. Get a millionaire mentor. Most of us were brought up middle class or poor and then hold ourselves to the limits and ideas of that group. I have been studying millionaires to duplicate what they did. Get your own personal millionaire mentor and study them. Most rich people are extremely generous with their knowledge and their resources.

9. Get your money to do the heavy lifting. Investing is the Holy Grail in becoming a millionaire and you should make more money off your investments than your work. If you don’t have surplus money you won’t make investments. The second company I started required a $50,000 investment. That company has paid me back that $50,000 every month for the last 10 years. My third investment was in real estate, where I started with $350,000, a large part of my net worth at the time. I still own that property today and it continues to provide me with income. Investing is the only reason to do the other steps, and your money must work for you and do your heavy lifting.

10. Shoot for $10 million, not $1 million. The single biggest financial mistake I’ve made was not thinking big enough. I encourage you to go for more than a million. There is no shortage of money on this planet, only a shortage of people thinking big enough.

Apply these 10 steps and they will make you rich. Steer clear of people that suggest your financial dreams are born of greed. Avoid get-rich-quick schemes, be ethical, never give up, and once you make it, be willing to help others get there too.

innovation

innovation

  

innovation

America’s Secret Weapon

By Bill Gates  | April 18, 2016

This presidential election has the country captivated. As many commentators have pointed out, the primaries are more focused on personalities than policy. While the parties focus on who is going to represent them in the fall, I want to make the case for something that I hope every candidate will agree on in November: America’s unparalleled capacity for innovation. When the United States invests in innovation, it creates companies and jobs at home, makes Americans healthier and safer, and saves lives and fights poverty in the world’s poorest countries. It offers the next president a tremendous opportunity to help people in America and around the world.

Of course, America’s capacity for innovation is nothing new. We have been inventing for more than two centuries: think of Benjamin Franklin, Margaret Knight, Thomas Edison. By the end of World War II, the United States led the world in automobiles, aerospace, electronics, medicine, and other areas. Nor is the formula for success complicated: Government funding for our world-class research institutions produces the new technologies that American entrepreneurs take to market.

What is new is that more countries than ever are competing for global leadership, and they know the value of innovation. Since 2000, South Korea’s R&D spending (measured as a percentage of GDP) has gone up 90 percent. China’s has doubled. The United States’ has essentially flatlined. It’s great that the rest of the world is committing more, but if the U.S. is going to maintain its leading role, it needs to up its game.

I have seen first-hand the impact that this type of research can have. I was lucky enough to be a student when computers came along in the 1960s. At first they were very expensive, so it was hard to get access to them. But the microchip revolution, made possible by U.S. government research, completely changed that. Among other things it enabled Microsoft, the company I co-founded, to write software that made computers an invaluable tool for productivity. Later, the Internet—another product of federal research—changed the game again. It is no accident that today most of the top tech companies are still based in the United States, and their advances will have a massive impact in every area of human activity.

My favorite example is health. America’s investment in this area creates high-paying jobs at universities, biotech companies, and government labs. It leads to new treatments for disease, such as cancer therapies. It helps contain deadly epidemics like Ebola and Zika. And it saves lives in poor countries. Since 1990, the fraction of children who die before age 5 has fallen by more than half. I think that’s the greatest statistic of all time, and the United States deserves a lot of credit for making it happen.

The next few years could bring even more progress. With a little luck we could eradicate polio, a goal that is within reach because of vaccines developed by U.S. scientists. (Polio would be the second disease ever eradicated, after smallpox in 1979—in which the U.S. also played an irreplaceable role.) There is also exciting progress on malaria: The number of deaths dropped more than 40 percent from 2000 to 2012, thanks in part to America’s support for breakthrough tools like drugs and bed nets. But to make the most of these opportunities, we need to invest more in basic health research and specific areas like vaccines.

 Until this year, the DOE’s research budget hadn’t seen a real increase since the Reagan administration.

Energy is another great example. American-funded research defines the state of the art in energy production. Early advances in wind and solar technology were developed with federal money. And this research offers a strong return on investment. Between 1978 and 2000, the Department of Energy spent $17.5 billion (in today’s dollars) on research on efficiency and fossil fuels, yielding $41 billion in economic benefits. Yet until this year, the DOE’s research budget hadn’t seen a real increase since the Reagan administration.

If we step up these investments, we can create new jobs in the energy sector and develop the technologies that will power the world—while also fighting climate change, promoting energy independence, and providing affordable energy for the 1.3 billion poor people who don’t have it today. Some of the more promising areas include making fuel from solar energy, much the way plants do; making nuclear energy safer and more affordable; capturing and storing carbon; and creating new ways to store energy that let us make the most of renewables.

There’s a lot of momentum right now on clean energy research. Last year the leaders of 20 countries, including the United States, committed to double federal investments in this area. Complementing that crucial effort, I helped launch the Breakthrough Energy Coalition, a group of private investors who will back promising clean-energy companies. The next president will have a chance to accelerate this momentum.

Investing in R&D isn’t about the government picking winners and losers. The markets will do that. It’s about doing what we know works: making limited and targeted investments to lay a foundation for America’s entrepreneurs. This approach has been fundamental to U.S. leadership for decades, and it will become only more important in the years ahead.

By the end of this summer, the political parties will have chosen their leaders and will start looking ahead to the November election. The nominees will lay out their vision for America and their agenda for achieving it. These visions will probably have more differences than similarities. But I hope we can all agree that, no matter how you see America’s future, there will always be an essential role for innovation.

LIABILITIES

LIABILITIES

LIABILITIES

CORPORATE FINANCING OPTIONS

Corporations can raise funds by issuing common stock, preferred stock, long-term bonds or notes. The board of directors is responsible for choosing financing options. A great number of factors influence financing options such as the ability to raise funds, interest rates, tax considerations, and investor income return expectations. The type and mix of securities issued have an important effect on net income and earnings per share.

INTRODUCTION TO BONDS

Each time a corporation issues a bond, a contract, known as the bond or trust indenture, is executed. The principal or face value of the bond, when interest payments are due and the interest rate are stated in the bond indenture. Bonds differ by the following characteristics: transferability of ownership, issuance and maturity dates, conversion provisions, redemption rights, and whether they are secured or not.

USING PRESENT VALUE

Present value is used for both financial analysis and to make business decisions. The concept of present value indicates that the value of a dollar today is not the same as the value of a dollar in the future. When a bond is issued two obligations arise: 1) periodic interest payments and 2) paying the the face amount of the bond at maturity. The selling price of a bond is determined by the present value of the combination of these two obligations.

BONDS & INTEREST RATES

The interest rate of a bond is stated in the bond indenture. That interest rate, known as contract or coupon rate, is often different from the prevailing market interest rates on the day the bond is issued. When the market or effective rate is higher than the coupon rate of the bond, the bond will be sold at a discount. When the market or effective rate is lower than the coupon rate, the bond will be sold at a premium. Bonds are rarely sold at their face value due to interest rate changes.

RECORDING BOND ISSUES

Bonds can be issued at face value, at a discount, or at a premium. When bonds are issued at face value, cash is debited and bonds payable credited. When bonds are issued at a discount, the discount on bonds payable account is debited for the amount of the discount. When bonds are issued at a premium, the premium on bonds payable account is credited for the amount of the premium. The present value of a bond is determined by adding the present value of the face value of the bond and the present value of its interest payments. The present value can be calculated using formulas, present value charts, financial calculators or computer programs.

AMORTIZATION OF DISCOUNTS & PREMIUMS

The bond premium or discount is amortized to interest expense until the bond is redeemed or matures. There are two amortization methods: the straight-line method and the interest method. The straight-line method amortizes identical interest expenses to each period. The interest method uses a constant rate of interest. The amortization of premiums decreases interest expense, while the amortization of discounts increases interest expense.

BOND SINKING FUNDS

Bond sinking funds are designed for the purpose of being able to meet debt obligations when they mature. Cash in these funds is invested in income producing securities. The income earned from investments and cash deposits are managed so that it will equal the amount due at maturity. A company has the option to manage its own bond sinking fund or appoint a trustee.

APPROPRIATION FOR BONDED INDEBTEDNESS

Appropriations for bonded indebtedness restrict a company's ability to pay dividends to shareholders. It requires that part of retained earnings be set aside for the repayment of bonds. Appropriations do not have a direct relationship to the bond sinking fund. Whenever an appropriation is made, Retained Earnings is debited and Appropriation for Bonded Indebtedness credited.

BOND REDEMPTION

Bonds are redeemed most commonly when the market rate of interest declines after they have been issued. A company can usually realize a saving by redeeming its bonds and issuing new bonds with lower interest rates. Only callable bonds have the feature which allows the company to redeem them at a stated price within a specific time period. All other bonds can be purchased on the open market. It is very unlikely, however, that an entire issue can be purchased in this manner.

BOND REDEMPTIONS

When a company is able to redeem bonds at a price above the carrying amount, a loss is incurred. This requires an entry that debits Bonds Payable and a Loss on Redemption of Bonds, and credits Cash. If any unamortized premium remains, this amount must also be debited. Unamortized premiums increase the cash payment required for bond redemptions. If a bond is redeemed at a price below the carrying amount, a gain has been realized. The Gain on Redemption of Bonds account is credited in such circumstances.

BONDS PAYABLE & THE BALANCE SHEET

Bonds payable are shown as long-term balance sheet liabilities, unless they mature in a year or less. If current assets are expected to be used to retire the bonds, a Bonds Payable account should be listed in the current liability section. If the bonds are to be retired and new ones issued, they should remain as a long-term liability. All bond discounts and premiums also appear on the balance sheet.

BONDS PAYABLE & THE BALANCE SHEET

Different bond issues should be maintained in separate accounts. When a Bonds Payable account is present on the balance sheet, it can be broken down into different issues or consolidated into a single balance. In the latter case, a schedule or note should disclose the details of the bond issues. It is also customary to provide a description of bonds issued in financial statements. The effective interest rate, maturity date, terms, and sinking fund requirements are commonly indicated in accompanying notes to financial statements.

BOND INVESTMENTS

Investments in bonds or notes should be listed under investments in the balance sheet. They should be kept separate from marketable securities. Businesses commonly invest in bonds because they have idle funds available. Corporate bonds can be purchased through a broker or directly from the issuing company. Purchasing from a company is cheaper because commission fees are absent.

BOND INVESTMENTS

Information on bonds can be obtained from the financial section of most major newspapers. Bond interest rates, volume of sales, closing price, the low and high price of the day, and the maturity date can all be found. Prices of bonds are quoted as a percentage of a bond's face value. The cost method is recommended when recording the purchase of a bond. All transaction fees and commissions should be included in the price of the purchase.

BOND INVESTMENTS

When bonds are purchased between interest payments, it is customary to pay the accrued interest to the seller. This accrued interest paid to the seller is debited to the Interest Income account when bonds are initially acquired. As interest payments are received, the Interest Income account is credited. At the end of a fiscal year, an adjusting entry is made for any accrued interest.

SELLING INVESTMENTS IN BONDS

When the investing company sell a bond, it records a selling price net of all transaction costs and commissions. The seller also records any accrued interest. The first step in recording the sale of a bond requires one to determine the appropriate amount of the amortization of a discount or a premium. This is necessary to calculate the amount of gain or loss realized from the sale of the investment.

SELLING INVESTMENTS IN BONDS

If a discount has been amortized in the current year, it is subtracted from the carrying value of the bond. A premium is added to the carrying amount of the bond. When the proceeds of a sale are greater than the ending carrying amount of the bond, a gain has been realized. A loss is realized when the proceeds of a sale are less than the ending carrying amount.

LIABILITIES

LIABILITIES

CORPORATE FINANCING OPTIONS

Corporations can raise funds by issuing common stock, preferred stock, long-term bonds or notes. The board of directors is responsible for choosing financing options. A great number of factors influence financing options such as the ability to raise funds, interest rates, tax considerations, and investor income return expectations. The type and mix of securities issued have an important effect on net income and earnings per share.

INTRODUCTION TO BONDS

Each time a corporation issues a bond, a contract, known as the bond or trust indenture, is executed. The principal or face value of the bond, when interest payments are due and the interest rate are stated in the bond indenture. Bonds differ by the following characteristics: transferability of ownership, issuance and maturity dates, conversion provisions, redemption rights, and whether they are secured or not.

USING PRESENT VALUE

Present value is used for both financial analysis and to make business decisions. The concept of present value indicates that the value of a dollar today is not the same as the value of a dollar in the future. When a bond is issued two obligations arise: 1) periodic interest payments and 2) paying the the face amount of the bond at maturity. The selling price of a bond is determined by the present value of the combination of these two obligations.

BONDS & INTEREST RATES

The interest rate of a bond is stated in the bond indenture. That interest rate, known as contract or coupon rate, is often different from the prevailing market interest rates on the day the bond is issued. When the market or effective rate is higher than the coupon rate of the bond, the bond will be sold at a discount. When the market or effective rate is lower than the coupon rate, the bond will be sold at a premium. Bonds are rarely sold at their face value due to interest rate changes.

RECORDING BOND ISSUES

Bonds can be issued at face value, at a discount, or at a premium. When bonds are issued at face value, cash is debited and bonds payable credited. When bonds are issued at a discount, the discount on bonds payable account is debited for the amount of the discount. When bonds are issued at a premium, the premium on bonds payable account is credited for the amount of the premium. The present value of a bond is determined by adding the present value of the face value of the bond and the present value of its interest payments. The present value can be calculated using formulas, present value charts, financial calculators or computer programs.

AMORTIZATION OF DISCOUNTS & PREMIUMS

The bond premium or discount is amortized to interest expense until the bond is redeemed or matures. There are two amortization methods: the straight-line method and the interest method. The straight-line method amortizes identical interest expenses to each period. The interest method uses a constant rate of interest. The amortization of premiums decreases interest expense, while the amortization of discounts increases interest expense.

BOND SINKING FUNDS

Bond sinking funds are designed for the purpose of being able to meet debt obligations when they mature. Cash in these funds is invested in income producing securities. The income earned from investments and cash deposits are managed so that it will equal the amount due at maturity. A company has the option to manage its own bond sinking fund or appoint a trustee.

APPROPRIATION FOR BONDED INDEBTEDNESS

Appropriations for bonded indebtedness restrict a company's ability to pay dividends to shareholders. It requires that part of retained earnings be set aside for the repayment of bonds. Appropriations do not have a direct relationship to the bond sinking fund. Whenever an appropriation is made, Retained Earnings is debited and Appropriation for Bonded Indebtedness credited.

BOND REDEMPTION

Bonds are redeemed most commonly when the market rate of interest declines after they have been issued. A company can usually realize a saving by redeeming its bonds and issuing new bonds with lower interest rates. Only callable bonds have the feature which allows the company to redeem them at a stated price within a specific time period. All other bonds can be purchased on the open market. It is very unlikely, however, that an entire issue can be purchased in this manner.

BOND REDEMPTIONS

When a company is able to redeem bonds at a price above the carrying amount, a loss is incurred. This requires an entry that debits Bonds Payable and a Loss on Redemption of Bonds, and credits Cash. If any unamortized premium remains, this amount must also be debited. Unamortized premiums increase the cash payment required for bond redemptions. If a bond is redeemed at a price below the carrying amount, a gain has been realized. The Gain on Redemption of Bonds account is credited in such circumstances.

BONDS PAYABLE & THE BALANCE SHEET

Bonds payable are shown as long-term balance sheet liabilities, unless they mature in a year or less. If current assets are expected to be used to retire the bonds, a Bonds Payable account should be listed in the current liability section. If the bonds are to be retired and new ones issued, they should remain as a long-term liability. All bond discounts and premiums also appear on the balance sheet.

BONDS PAYABLE & THE BALANCE SHEET

Different bond issues should be maintained in separate accounts. When a Bonds Payable account is present on the balance sheet, it can be broken down into different issues or consolidated into a single balance. In the latter case, a schedule or note should disclose the details of the bond issues. It is also customary to provide a description of bonds issued in financial statements. The effective interest rate, maturity date, terms, and sinking fund requirements are commonly indicated in accompanying notes to financial statements.

BOND INVESTMENTS

Investments in bonds or notes should be listed under investments in the balance sheet. They should be kept separate from marketable securities. Businesses commonly invest in bonds because they have idle funds available. Corporate bonds can be purchased through a broker or directly from the issuing company. Purchasing from a company is cheaper because commission fees are absent.

BOND INVESTMENTS

Information on bonds can be obtained from the financial section of most major newspapers. Bond interest rates, volume of sales, closing price, the low and high price of the day, and the maturity date can all be found. Prices of bonds are quoted as a percentage of a bond's face value. The cost method is recommended when recording the purchase of a bond. All transaction fees and commissions should be included in the price of the purchase.

BOND INVESTMENTS

When bonds are purchased between interest payments, it is customary to pay the accrued interest to the seller. This accrued interest paid to the seller is debited to the Interest Income account when bonds are initially acquired. As interest payments are received, the Interest Income account is credited. At the end of a fiscal year, an adjusting entry is made for any accrued interest.

SELLING INVESTMENTS IN BONDS

When the investing company sell a bond, it records a selling price net of all transaction costs and commissions. The seller also records any accrued interest. The first step in recording the sale of a bond requires one to determine the appropriate amount of the amortization of a discount or a premium. This is necessary to calculate the amount of gain or loss realized from the sale of the investment.

SELLING INVESTMENTS IN BONDS

If a discount has been amortized in the current year, it is subtracted from the carrying value of the bond. A premium is added to the carrying amount of the bond. When the proceeds of a sale are greater than the ending carrying amount of the bond, a gain has been realized. A loss is realized when the proceeds of a sale are less than the ending carrying amount.