What is Ex Gratia Payment? Ex Gratia payment is a type of payment made by an organization to an individual/employee for damages or claims without recognizing any legal obligation. Ex Gratia is derived from Latina where “Ex Gratia” means “by…
The bargaining power of suppliers means, the pressure that suppliers can put on buyers by changing their prices, reducing the supply or dropping the quality As you might have noticed, I have explained this using the current inflation problem in…
Cash and cash equivalents, is a line item in the balance sheet of a company signifying either cash in bank or very short term investments. What are Cash Equivalents? Cash & cash Equivalents are investment securities that are made for…
Understanding this basic components of the accounting equation formula can make your life simpler with finance and accounting in general. Whether you are a CA candidate or a financial analyst? Maybe you are a non-finance student facing this horrific concept.…
Utility expenses, as the word suggests, are expenses related to basic amenities associated with running an establishment or a home. For e.g., electricity, fuel, phone or water. Now you may think that’s correct, but how do we categorize them in…
What is a Fraud Triangle? The fraud triangle is a concept that explains the reasons behind committing fraud by workers at a workplace. According to the Fraud Triangle, there are three elements that are responsible for committing fraud – pressure,…
What is Empirical Probability? Empirical Probability is also known as experimental probability. Empirical probability refers to a probability that is based on historical data. In simpler words, empirical probability illustrates the likelihood of an event occurring based on historical data.e…
Non-monetary assets are assets that have value but cannot be converted into cash or money. What are Non-Monetary Assets? Non-monetary assets are the assets a company has whose exact monetary value cannot be determined precisely. The value of these assets…
So, cash ratio is like the strongest measure to to check a company’s liquidity position and is calculated by dividing cash & equivalents like liquid investments to the current liabilities of the company. The higher the ratio, the better the…
What is Trade Credit? Trade credit, in commercial finance, is an agreement between parties in which the customer can purchase goods or services without paying cash upfront. The customer will pay the supplier at a date scheduled in the future.…
Working Capital Cycle Introduction In this article, we will be explaining what the Working Capital cycle means and how you can help your business by having greater control over your affairs and transactions, letting you navigate every business aspect. Find…
Accrued income meaning is the income where that company has recognized and recorded the transaction in its journal when it has been earned, but the cash payment hasn’t been received yet. In simpler terms, it is the money that has…
