Articles

Definition Owner’s equity is the enterprise’s funds embodied in net assets, funds initially invested by its founders or participants, as well as its financial results accumulated (lost) in the course of its activity – profits and losses received (incurred) over the..

An effective operation of a company largely depends on the timely receipt of funds from customers. To control overdue payments, an average debt collection period indicator is used. A definition of the average collection period is the average length of time..

Definition Before proceeding to the preparation of management and financial reports, an Adjusted Trial Balance is prepared. For that, adjustment entries are made to the Unadjusted Trial Balance. The latter are necessary in order to ensure an accurate reflection as well..

To make any goods, a number of different resources are spent. Manufacturing enterprises convert raw materials and supplies into finished products through the use of labor and plant equipment. The sum of all costs incurred will constitute the cost of production..

Definition Capital expenditure can be defined as any expenditure incurred in creating, acquiring, expanding, or improving an asset for use by a company. The important point is that the benefit from such capital expenditures will be spread over a number of..

Gross Margin The goal of any company is to generate money. This income of funds can be calculated and analyzed using different financial and accounting indicators. There are such concepts as revenue, net profit, and gross profit. Gross profit (margin) is..

Capital stock (share capital) emerged in the middle of the 19th century with the emergence of a joint-stock form of ownership, when the need for the implementation of investment projects that were beyond the power of sole ownership or partnership arose...

Definition Leverage means the use of borrowed capital as a source of investment financing in order to increase assets and generate higher returns. In finance, through financial leverage, you borrow money, invest, and try to increase your profits through higher financial..

The debt ratio is an indicator of the financial condition of an enterprise, without which neither managers of organizations, nor owners of companies, nor persons wishing to invest their own funds in any business (e.g. purchase stocks) can do without. So,..