This Accounting category will cover various topics on accounting ranging from financial, management, and advance accounting.
In every organization, it is the prime objective of high authorities to manage and control the costs. Businesses have many expenses, the incoming and outgoing of money is part of daily activities. To manage the cost of business the term “Responsibility Accounting” is used where specific people are made responsible for controlling expenditures and accounting […]
What is Responsibility Accounting? Read More »
Introduction Financial statements are documents produced by a business that show its different aspects. Businesses prepare financial statements after every accounting period for several reasons. For example, financial statements help the stakeholders of business make decisions regarding their relationship with it. Similarly, even the business itself can benefit from producing financial statements as it allows
How to Prepare a Statement of Retained Earnings? Read More »
In this article, we cover the difference between cost control and cost reduction. This starts from the overview of costs structure of a business and continue to the key definitions of both cost control and cost reduction. Then, we will jump to the key differences between cost control and cost reduction. Now let’s go through
Difference between Cost Control and Cost Reduction: All You Need to Know! Read More »
In this article, we cover the purpose of operating statement. This includes the overview of operating statement as well as each type of operating statement. Then, we will go further to the purpose of each operating statement. So let’s go through together! Overview There are five financial statements that businesses prepare to document and demonstrate
What is the Purpose of Operating Statement? Read More »
As the name indicates this ratio is about the dividend cover. Dividend coverage ratio is one of the few important investor ratio indicators. It provides information on a company’s ability to pay dividends to its shareholders. It also indicates the profits generated by a company and the portion of income distributed among the shareholders. What
Dividend Coverage Ratio: All You Need to Know About! Read More »
The Debt ratio is an important indicator for lenders and stockholders. It indicates the level of a company’s debt against its assets. It’s usual for businesses to offer loans and debts on asset based collateral. However, both lenders and stockholders would be interested to know the company’s level of financing against their assets. So how
How to Calculate Debt Ratio? Read More »
In this article, we cover the flexible budget. Now let’s go through some basic overview. As you may know, budgets are financial forecasts of a business for its revenue and expenses for a specific period. These are quantified estimations of revenues and expenses. A budget can be planned for various activities or divisions of a
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Introduction Fixed assets, often referred to as property, plant and equipment, are an essential part of any business, especially businesses in the manufacturing industry. They use fixed assets in their operations to generate wealth in the long-term. Fixed assets are also defined as assets that business use for more than a single accounting period and
How to Calculate Capital Intensity Ratio? Read More »
In this article, we cover the working capital management. This includes the definition of working capital management, its objectives as well as working capital management strategies. So, let’s dive in! Overview Liquidity is one of the most vital parts of a business. Liquidity refers to how easily a business can convert its assets into cash.
Working Capital Management: Definition, Objectives and Strategies Read More »
In this article, we will cover how to calculate interest coverage ratio. This includes the key definition, formula, example calculation, advantages and limitation as well as other areas which you should know. Overview Businesses seek an optimal balance for the gearing level. Basically, debt financing is cheaper than equity financing. The interest paid on the
How to Calculate Interest Coverage Ratio? Read More »
