How to Prepare a Statement of Stockholders’ Equity?

The statement of stockholders’ equity is also known by the following names; statement of shareholders’ equity, statement of equity, statement of changes in stockholders’ equity, statement of changes in shareholders’ equity, and statement of changes in equity. We usually use these key term interchangeably. Statement of stockholders’ equity is one of the five components of …

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What is Common Size Balance Sheet?

Overview Financial statements are reports that provide information to their users regarding different aspects of the business. All businesses must produce financial statements. Sometimes, businesses prepare financial statements because they are required by relevant rules and regulations. However, some businesses, that are not required by rules and regulations, may also prepare financial statements voluntarily to …

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How to Calculate EBITDA?

Overview In this article, we will cover how to calculate EBITDA. Before going in detail, let’s go through the overview and basis definition of EBIDTA. Basically, there are many ratios and statistics that investors use to check whether investing in a particular business is profitable for them. These ratios can tell the investor different information …

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The Consistency Principle in Accounting

Financial accounting rests on two pillars of recording and summarizing the accounting records. These accounting records from registering in a ledger to analyzing and interpretation must follow some rules. Without following rules the data presented and evaluated would be null and void. There are several accounting principles or concepts that a business can follow or …

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The Money Measurement Concept: Definition, Important and Example

The Money measurement concept is one of the basic accounting principles or theories that form part of the larger set of accounting rules. Record keeping and performance measurement are key components of an accounting cycle. Financial accounting is based on several principles such as business entity concept, historical cost, accrual basis accounting principle, matching principle, …

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Budgetary Slack: Definition, Causes and How to Control Budgetary Slack

In this article, we will cover the budgetary slack. This includes the definition, causes, the Repercussion of budgetary slack and how to control budgetary slack. First, let’s go through the overview together before going further detail. Typically, all businesses prepare budgets of various types; budgets are an estimation of future expenses, revenue, cash flows, etc. …

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