obitaxanswer

  FUNDANENTAL ANALYSIS/VALUE ANALYSIS .  Analyzing  the financial  indices to determine the health of the business just as in the case of the example below. Is good to look at this indices for the past five years.  -TURNOVER  -NET PROFIT   -BEFORETAX -NET PROFIT AFTER TAX.  -DIVIDEND DECLARED/PROFIT SHARE  -DEBT/BANK BAL -CASH SALES(Get from cash flow -CORPORATE GOVERNANCE /BUSINESS SUSTAINABILITY.  -RISK MANAGEMENT STRATEGY  When this indices are positive and there are no future potential danger. SEE EXAMPLE FINANCIAL  TURNOVER/SALES-2,000,000 Cost of sale:100,000 Gross profit 1,900,000 Admin And Exp 900,000 NET PROFIT B/4 TAX.  1,000,000 Profit after Tax 700,000   Cash bal:1,000,000 Equity/Total asset:5,000,000 PROFIT AFTER  TAX 700,000 CASH BAL=1,000,000 Equity /Total  asset 5,000,000. Current debt=500,000. What is the return here say=700,000/5,000,000 = 14 percent The company seems to h...

YOU ONLY HAVE $100,000 TO INVEST IN AND THERE EXIST THE RISK THAT $100,000 WHEN INVESTED CAN BE LOST. HOW CAN YOU MITIGATE THE RISK OF INVESTING THIS AMOUNT?   You only have $100,000 to invest in and there exist the risk that $100,000 when invested can be lost. How can you mitigate the risk of investing this amount?   The investor can decide to invest the total amount of $100,000 into his business and thereby face the potential risk of losing the total in his business. The law of probability works the way increase exposure to risk works. The chance of failure of losing $100,000 when adversity or business uncertainty occurs is great.   HOW CAN THIS RISK BE REDUCED. Out of the $100,000. An investor can decide to invest $50,000 in stock/business; $25000 in treasury bills/fixed deposit and $25000 in Real estate. We can see that the investment is somehow diversified.   For example when the $50,000 stock investment fails, the treasury bills and re...

STAMP DUTY .  GUIDED BY STAMP DUTY ACT AS AMENDED   Stamp duties are taxes on document.  It is tax on instrument or a written document in Nigeria.  This is to be stamped within 40 days from date of execution.   Forms of Stamp duties -fixed duties-Irrespective of the value. The same duty is payable.  -Cheque and payment instruments.  -Notary public.  -proxy and guarantors form.    Ad-valoreum Varies according to value in accordance with scale fixed by govt.  -Bill of exchange and promissory notes. -share capitals of coy.  -life insurance policy and property valuation. -Debenture and mortgage loan.    Relevant authority -FIRS.    Commissioner of stamp duties -Admin head, stamping, custody, adjudication.    Instrument not properly stamped. Not admissible in court of law.  Exception.  -criminal proceedings  -prove o...

SPECIALISED  TAXATION -Air and sea transport business  -Engaged in cable undertaking  -Foreign companies engaged in  -insurance business(life and non-life) -Authorized unit trust scheme   Income derived in Nigeria   Exempt  -loaded or routes outside Nigeria -In transit in Nigeria     COMPUTATION OF ASSESSABLE PROFIT BY FIRS .  The format to be used is as prescribed by CITA   However this   format can be used as a guide    Adjusted profit ratio=profit b4 depreciation /worldwide income.    Depreciation ratio =Depreciation allowance /worldwide income   Assessable profit =income receivable in Nigeria * profit ratio   Less Capital allowance =income Received in Nigeria * depreciation ratio   Total profit Income tax payable= CURRENT TAX RATE.   C. Minimum tax APPLICABE RATE AS SPECIFIED BY CIT    LIFE ASSURANCE...

  SUMMARY OF TAXATION   OF TRUST,SETTLEMENT & ESTATE. ESTATE: Is the total property own by individual. TRUST: Is where a   title is vested on a person(s) called trustee for the benefit of another called beneficiary which is created legally. Settlement: where a sum is set aside for the benefit of another person. FORMAT. 1.SUMMATION OF ALL THE INCOME 2.DEDUCT ALLOWABLE EXPENSES=TRUSTEE FEES,LEGACY,ANNUITY. 3.ARRIVE AT COMUTED INCOME. 4.LESS DISCRETIONARY PAYMENT. 5.ARRIVE AT REMAINDER OF COMPUTED INCOME. 6.ANY DISTRIBUTABLE TO THE AS IN THE DEED. 7.ARRIVE AT TRUSTEE INCOME.                   QUESTION. MAL.MUSA WHO DIED DIRECTED THAT HIS PROPERTIES SHOULD BE SHARED TO HIS 3 CHILDREN. OBI,OLU AND ISA. THE RECORDS OF THE TRUSTEES SHOWS THE FOLLOWING. RENTAL INCOME (GROSS) = N1,000,000 TRADING INCOME=1,200,000 DIVIDEND(GROSS)=700,000 INTEREST(GROSS)=5...

  WHAT IS  VAT?   VAT is a tax on value added on goods and services. The value added on a product is  the output value minus the input cost. Value added tax has been successful in many countries. It has been challenging especially in the area of international online business. Recently some countries has asked online vendors to register for VAT in the country of buyer. current Vat rate-7.5% VAT PENALTY Below are some VAT penalties in Nigeria. FAILURE TO REGISTER FOR VAT  According to VAT Act 1993 as amended 1.A taxable person shall, within six months of the commencement of the Act, or six months of the commencement of business, whichever is earlier register with Firs 2.A taxable person who fails or refuses to register within the specified period shall be liable to N50,000  for the  first month and N25,000 for each of  the subsequent month in which the failure occur. FAILURE TO REMIT TAX.  1 . Failure to remit tax  within the spe...

WHEN BUSINESS  CEASE TO OPERATE  THE ACCOUNTING IS BASED ON TWO RULES -THE FINANCE ACT HAS CHANGED THE PREVIOUS RULE  THE TAX IS NOW  BASED ON THE ACTUAL PROFIT FOR THE YEARS . Disclaimer : Obi Azubuike is not by this publication acting as a professional advisers and therefore not liable to any  damage whatsoever for your acting or refraining to act based on  this publication. Consult your professional for advice.  copyright(c) 2016-Obi Azubuike