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, … Read more

Current Ratio

Introduction: 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 … Read more

Investing Activities

Introduction: 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 … Read more

Operating Activities

Introduction: 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 … Read more

Retained Earnings

Introduction: 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 … Read more


Introduction: 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 … Read more

Common Stock

Introduction: 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 … Read more

Preferred Shares

Introduction: It is appropriate to state that ‘preferred stocks’ are more powerful than the common stocks. Since their inception in the world of business, the accounting gurus have confirmed that preferred stockholders are given a higher value in the market along with a bigger claim on company’s earnings as well as its total assets accordingly. … Read more

Assets and Its Types in Accounting

Introduction: The term ‘asset’ in the business world reflects to something ‘imperative’ and of great value, helping in accelerating income and unraveling other benefits in overall operations of the entities. It should be in our best interest that ‘assets’ are highlighted in a balance sheet either being intangible or tangible in nature. It is a … Read more

Balance sheet

Introduction: A ‘Balance Sheet’ is one of the most familiar terms in accountancy, a financial statement incorporating the assets of the company along with their debts and shareholder’s equity recorded for a specific period. Comprised in three segments, a balance sheet indicates the true value of the company in terms of what it owns, owes … Read more