Users of financial statements
There are multiple users of financial statement that range from internal employees to potential investors. Although, the use of financial statements differ for different stakeholders. … Read more
There are multiple users of financial statement that range from internal employees to potential investors. Although, the use of financial statements differ for different stakeholders. … Read more
Manufacturing cycle efficiency- MCE aims to measure the efficiency of the production function. As we understand, higher production time leads to higher costs of manufacturing … Read more
Goods received note is an internal document prepared by the business to control and track receipt of the goods in the business warehouse. This document … Read more
Asset management ratios help to understand how effectively the business uses its assets to generate revenue. It’s an essential ratio for the business stakeholders to … Read more
The liquidity ratio helps to assess the cash flow position of the business. It’s a valuable tool in assessing if the business has sufficient liquid … Read more
Profitability ratios help understand the profitability of a business at different stages of the income statement. For instance, the gross profit ratio helps to understand … Read more
Gearing ratio help to determine financial risk in the financing structure of the business. It helps study the relative volume of the debt and equity … Read more
Definition A predetermined overhead rate is an estimated rate that is used in the absorption of overheads in product costing. It’s calculated by dividing the … Read more
Definition of suspense account: A suspense account is a temporary account where all the suspicious and unclear transactions of the accounting system are parked. However, … Read more
Bull and bearish are the terms used in the stock market to reflect market conditions. The market is called Bull when the price index of … Read more
Definition A Contra account is the creation of an opposite account balance in the balance sheet. It helps to reduce the normal account balance without … Read more
Service level agreement is the level of service agreed between the vendor and the buyer. The agreement includes matrices for the performance measurement and the … Read more
Definition Performance guarantee means the commitment to supply a certain level of service/supplies to satisfy the obligation agreed between the parties. Usually, banks offer performance … Read more
Definition A demand loan is an informal type of loan that is to be repaid on the lenders’ call. There are no formal agreements and … Read more
Fictitious assets meaning/definition Fictitious assets are not an asset in reality. However, these assets are recorded in the balance sheet to reflect a true sense … Read more
Businesses generate revenue from rendering services and the sale of tangible products. Income generated from service rendered is referred to as service revenue. The transaction … Read more
A Budgeted Balance Sheet is a report that tells the financial position of an entity for a future period. It is just like a normal … Read more
Definition: Due diligence is the systematic and structured analysis of investment decisions to mitigate the risk. It’s performed with strategic, operational, and financial perspectives to … Read more
Definition Accumulated depreciation is the contra account created in the accounting record to offset the use/depreciation of assets. We do not directly reduce the cost … Read more
Five elements of financial statement include the balance sheet, income statement, statement of cash flow, statement of changes in equity, and the notes to the … Read more