Profit and loss statement shows business gains or losses at the end of the fiscal year. It shows the degree of coverage of costs and the amount of profit made in the end. Profit and loss account can...
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Depreciation rate states that an asset needs to be depreciated in the books –financial records- within a specific number of years. It allows businesses to deduct costs over time. This may be important to small businesses due to...
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This information is valuable to a business since it informs them about the point where they can manage to keep working. It also informs them that any quantity of products or amount of sales higher than this number...
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The amount initially collected from the investors of the business is considered the capital or common stock. The amount of investments determines the amount of dividend every shareholder receives. It should be noted that not all net profit...
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Liabilities are given priority to any other type of debt. Remember that the company has borrowed money from investors to run the business and has to repay them annually through the profit it makes. Investment is money lent...
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Broadly speaking, the resources that a business owns for future benefit are known as assets. Here, we need to know a couple of terms frequently used with regards to assets. The first one is intrinsic value. There are...
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Finance and accounting play a significant role in keeping businesses alive. A business needs to gather sums of money (not enough to be invested individually) large enough to run a business with the goal of gaining a profit....
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Debt may be secured or offered based on goodwill. But there is a limit to how far a company can go and how long it should rely on debt to run its business. Loans also involve interests while...
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