Common Stock

According to accountancy professionals, the ‘common stocks’ represent an ownership in the entity. It is worth mentioning that individuals holding common stocks are supposed to exercise control by finalizing the board of directors and picking up the right corporate policies for their company. Furthermore, common stockholders are not valued to the fullest and wander at...

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Dividend

Have we pondered over dividends? It should be in our best interest that ‘dividends’ are considered a specific portion of the company’s earnings, which caters its net profit and is evaluated through the supervision of top-line management as well as board of directors. Indeed, dividends are ‘profits’ coming in from the business world that are...

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Retained Earnings

Considering it as an imperative aspect in accountancy, ‘Retained Earnings’ indicates the percentage of net earnings that are still unpaid in terms of the dividends. However, the same percentage is stashed and reinvested in the core competencies of the business. It is worth mentioning that on common grounds the incorporations pay off their debt through...

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Operating Activities

The operating activities are considered as the company’s source of income which generates revenue on a regular basis. It highly focuses on the company’s core competencies and associations with their business activities. Furthermore, it evolves around various departments of the organization such as, manufacturing, distributing, selling, marketing and the finance section accordingly. These activities/services can...

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Investing Activities

The investing activities are considered as another integral part of the cash flow statement, as it marks out the money which is being received through the help of long-term assets. It is worth mentioning that after collecting the money, investing activities might as well exhibit a positive trend in the cash-flow statement, whereas it also...

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Current Ratio

The current ratio is depicted as another important aspect of ‘Liquidity Ratio’ and ‘Working Capital’ as it marks out the correct proportion of current assets that are available in the business setup in according with the current liabilities. It should be in our best interest that current ratio is quite essential, especially for the companies...

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Liquidity and Liquidity Ratios

Liquidity: Liquidity is defined as an extent to which assets as well as marketable securities are bought and even sold back in the markets without manipulating their original price. It’s a high-end trading activity which exhibits its occurrence in manufacturing companies that are willing to spend a great chunk of money over the inventory. Furthermore,...

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Quick Ratio

The Quick Ratio represents an indication for the company which heavily emphasizes over its short-term liquidity and its potential to fulfill the temporary obligations with assets having maximum liquidity in particular. Therefore, it embarks on excluding inventories from the current assets and is evaluated by this universal formula – Quick ratio = (Current Assets –...

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Working Capital

The working capital is one of the most effective tools in the world of accountancy as it represents the company’s performance along with its financial position on a short-term basis. There is an organized method of evaluating the working capital which can help in finding some value-added insights regarding the company. It can be calculated...

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Annuity

The annuity is considered as a contractual product which is used by financial centers and institutions to understand about how funds grow from time to time. It is especially designed to evaluate how the money changes its nature after annuitization and delivers a series of payments to the individuals after a noticeable gap. Furthermore, the...

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