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.…
Degree of Financial Leverage, or DFL, basically tells you how much a company’s profit per share or its overall net income can swing up or down when its operating income (EBIT) changes, all because it’s got fixed costs like interest…
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…
Contribution analysis is a method used to determine the profitability of different products, services, or business units within a company. The goal of contribution analysis is to identify which products or services are generating the most profit and which are…
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…
Have you ever wondered, when you paid someone for a service but there was no actual written document to prove that it exists. Now, that is called as an implied contract, irrespective of the written legal document, which is legally…
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…
Author: Sarthak Bhalerao Table of Contents What is Historical Cost? The historical cost of an asset, in accounting terms under the U.S GAAP, is the original price at which it was purchased. The cost of all assets is recorded on…
The Average Collection Period indicates how long, on average, a company needs to collect cash from customers following a credit sale. This metric is crucial for evaluating a company’s efficiency in managing receivables, understanding its cash flow, and assessing its…
So, let me give you some examples to make you understand the social audit meaning. One example of a real-life social audit is the Fair Labor Association (FLA) audit of a factory in China that produced clothing for a number…
This is a straighforward explaination of the economics concept called as substitution effect. And if you have been wondering around with the dilema of what is substitution effect then you search ends here. What is Substitution Effect? The substitution effect…
