Ratio analysis is a quantitative method used to analyze the company’s data contained in financial statements. This analytical information helps to understand company’s profitability, solvency, … Read more
The Nominal ledger is also referred as a general ledger. All transactions of the company are recorded in the chart of accounts. These chart of … Read more
Contribution and gross margin help to understand the gap between revenue and expenses of the business. These measures are used to assess the profit that … Read more
Licensing and franchising are sometimes confused to be the same. But they are different, in simple words licensing typically deals with the businesses of products … Read more
Horizontal integration is when a business acquires/merges with another business operating at the same level in a value chain. Generally, such integration aims to grow … Read more
The selling cost of goods or merchandise from the seller’s factory is called ex-factory price. Here the term “ex” depicts exports, which means that the … Read more
Definition The interim dividend is a dividend payment made by a corporation to the shareholders during accounting year. The payment for the interim dividend is … Read more
External auditing is important to assess the fairness of financial statements prepared by the management. As we understand, there is an agency relationship between shareholders … Read more
Definition NRV – net realizable value in accounting is a widely used inventory valuation method. It aims to calculate the value realized by selling some … Read more
Definition Accounts receivables factoring is designed to finance ventures without increasing leverage in the business. It involves selling of invoices to third parties at discount … Read more
Accounting for property, plant, and equipment is one of the technical areas where accountants often face a challenge. In this article, we have discussed different … Read more
The plowback ratio is used to identify the earnings that are retained for business after paying the dividends. It is used to calculate the profit … Read more
Definition The retention ratio reflects proportion of earnings retained by the business. These are the earnings that have not been distributed among shareholders. Instead, these … Read more
Definition Common stock represents your ownership in the company. These rights/power include an appointment for the board of Directors, formation of the board policies, and … Read more
What is Interest on Drawings? We need to calculate interest on drawings when partner withdraws certain goods/assets from the business for a temporary period and … Read more
The cut off concept in accounting aims to ensure events and transactions are posted in the correct accounting period. It helps to calculate profit/loss without … Read more
Definition The realization concept or the revenue recognition principle in accounting is a method used by accountants for recording revenue earned by the business. This … Read more
Definition of corporate governance Corporate governance refers to a system of governance. It aims to monitor and control strategic aspects of the board activities, decision … Read more
Dealing with a bad manager can be a serious mental hazard. All the time, your boss prefers his favorite subordinate who also exceeds the deadline … Read more
Definition Conversion cost is the cost required to convert raw material into finished goods. It includes direct labor and manufacturing overheads. Explanation Whatever product you … Read more