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INSURANCresults of the business shall be affected in consequence of the damage.
Difference Between Fire Insurance Policy and Loss of Profit Policy woccurren(e) Annual Turnover. The turnover
during the (f) Standard Turnover. The turnover during that period in the twel preceding the date of the damage. immediately before the date of damage which corresponds with the (g) Rate of
Gross Profit. The rate of gross profit earned on the turnover financial year immediately before the date of the damage. damage and ending not later than 12 months thereafter during twelve
months indemnityBasis of Distinction1. CoverageFire Insurance PolicyThis policy covers loss of or damage to insured property such as building, stock, etc.This policy covers loss of gro sustained in
interruption. consequent of aIn Loss of Profit policy sutipadjusted turnov is intangible and covers capacity of the business.Loss of Profit Policy2. Subject MatterSubject matter of this insurance
policy is tangible and covers material and property.Computation of Claim for Loss of Profit. Following procedure is f calculation of claim for loss of profit : followedfire, Calculation of rate ofgross
profit for lossof profit policy is different from the ninCalculation of1. Calculate short sales by comparing the sales made during the the year of fire with the sales of the same period of the year
preceding the abnormal pe year of this connection, it may be remembered that calculation of short sales is to ber period of dislocation due to fire or the period made of indemnity for which policy
is Turnover in last whichever is less. For example, if the indemnity period is 4 months whereas disloc to the business takes place for 3 months, the amount of short sales is months. But if dislocation
continues for 6 months, the amount of short sales is palculated for 4 months because loss on account of short sales of short salespeedin subsequ be adjusted if any in EXAMPLE. A tra d of 6
months, period following details, sus be calculate pear 90.000 period will not be allowed by the insurance company. The amount of short sales a crease in turn calculated by adjusting the normal or
standard turnover for any increase or den To achieve addi expected in the year of fire as a result of increasing or decreasing trend in the turnire 731250. 2. Calculate rate of gross profit of the
financial year preceding the yen, SOLUTION Net profit earnerate of gross profit as described earlier in this chapter. It is calculated as follows: Rate of Gross Profit = Sales Net Profit + Insured
Standing Charges of the financial year preceding the year of fire x100 Gross Profit Net PGrossculateulate loss of profit on short sales preding the rate of gros pr in step (2).4. Add increased cost of
working incurred to mitigate the effect of the 25% increase in tu hot sales to the cost of working is restricted to the lowest of the following amounts :Gross Profit on increaseAdd: Additional
Standin(a) Actual increased working expenses Net Profit + Insured Constant Expenses(b) Net Profit + All Constant Expenses x Increased Working CostOrGross Profit on preceding 12 months' sales
Gross Profit on preceding 12 months' saloAdditCalculation of PolicTumover in the last finanALANCE CLAIMSGross profit onDeduct the anlated instep (4)The gross clairGross ClainThe figure so
calcusurance companthe insurapulled only if thejusted turnover ofdiately precedtrend of the businesturnover of 12 meto get the figure o
• ATION OF_The yield or return yield expected from similar companies in
the same type industry also shares.Efficient Management. Efficient
management into by taking positive and progressive steps market value
shares.Dividend policy of the company. When a company earns adequate
distribute dividend to shareholders besides Sometime dividend rate in
particular year is more or influence market priceSpecial restrictions. If
shares cannot be easily transferredpartly the investors would not offer
good price which theyotherwise paid. Size of shares be valued. When a
large number power may influence decision regarding payment of
dividend and the shares.Other social, economic condition country
onthods Valuationedifferent valuing shares depicted below:Methods
Valuation of Shares(2)sets odYield/Market, Value/Capacity Method(3)
Dual (Fair Value) Method(4) Exchange MethodNet Tangible Assets
excluding Goodwill(a) Valuation based on Rate of ReturnNet Tangible
Assets(b) Valuation based on Productivity Factor

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INSURANCresults of the business shall be affected in consequence of the damage.

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