Capital in business and corporate finance refers to anything that a company or its owner can employ to create more value. Capital is used by accountants, economists, and investors to assess the performance and health of a business, corporation, or economy. To provide a complete picture of a company’s net worth, the financial statements of […]
Capital: Definition, Types and Capital Structure of a Business Read More »
Money is the backbone of all business operations. Every company runs because they have both the outflow and inflow of money. We can see that all businesses are creditors and debtors to some other businesses in our society. These creditors and debtors play a vital role in shaping a company’s work and positioning in the
What are Creditors? Read More »
Assets are vital for an individual as well as any kind of business to maintain good financial health. These assets allow a business to make a profit and increase its value. Business owners should be well-acquainted with the different types of assets and their purposes. In fact, the value of an asset may increase or
Non-Current Assets: Definition, Components and Examples Read More »
Marketable securities management is an essential process in contemporary companies and government agencies. Corporate treasurers always search for ways to boost the return on their liquid cash. They know that cash set aside for precautionary purposes will not earn anything. In these situations, companies can gain profit from it by investing in high-liquid and low-risk
Marketable Securities: An Overview Read More »
A company has 4 financial statements that divulge a look at its financial position and business operations. These are: Of the above-mentioned financial statements, cash flow, and fund flow statements are documents of disclosure that describe a company’s liquidity position. Though they are closely related, they have entirely different purposes. Cash flow and fund flow
Know The Difference Between A Cash Flow Statement And A Fund Flow Statement Read More »
Every business needs to monitor its revenue, expenditure, and profits to ascertain its financial health and success. Gross profit is an important parameter that shows how much revenue a company brings after the subtraction of expenses involved with that revenue. This value tells the company’s management and investors the profitability of a certain product or
Gross Profit: Meaning and Formula Read More »
Many interpret funds as mere cash, and a fund flow statement formulated out of this aspect is known as a cash flow statement, where only the outflow and inflow of cash flow get recorded. The cash flow statement omits numerous accounting items which do not directly impact cash or working capital. This is the reason
Fund Flow Statement: Definition, Features, and Importance Read More »
EBIT (Earnings Before Interest and Taxes) is a measure of a company’s profitability. It calculates a business’s operating profits by deducting operating expenses and the cost of goods sold from its net revenue. This calculation is relatively simple as it does not consider taxes or interest. Investors and creditors use this value to see how
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Introduction Business assets usually cost a fortune and have a limited lifespan. Hence, it is necessary that this cost be expensed proportionately across their functional life. Depreciation and amortization are two such accounting processes that involve spreading out the cost of these assets throughout their useful life. Before understanding how these two methods work, let
Depreciation vs. Amortization: Meaning, Differences, and Examples Read More »
‘Cash is king’ is a popular saying that you might’ve heard. This is particularly true for all types of businesses, as cash is a measure of their financial standing in the long run. Hence, cash management is an essential skill to sustain the ongoing activities of a business, mobilize funds where needed and optimize its
Cash Flow Statement: Meaning, Examples, and How to Prepare it? Read More »