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November 20, 2020

Charles Lutwidge
Gross Margin Ratio

Gross Margin Ratio

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..

Articles

November 20, 2020

Charles Lutwidge
Pros and Cons of Capital Stock

Pros and Cons of Capital Stock

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...

Articles

November 19, 2020

Charles Lutwidge
Financial Leverage: What is It and Why a Business Needs One?

Financial Leverage: What is It and Why a Business Needs One?

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..

Articles

November 19, 2020

Charles Lutwidge
Debt Ratio – Meaning and Calculation

Debt Ratio – Meaning and Calculation

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,..

Articles

November 03, 2020

Charles Lutwidge
An Introduction to Credit Risk

An Introduction to Credit Risk

The operation of enterprises in a changing market environment is certainly accompanied by risks associated with uncertainty of circumstances, as well as the possible occurrence or non-occurrence of certain events. Today, we will talk about credit risk.  Modern banks offer all..

Articles

November 03, 2020

Charles Lutwidge
Direct Write-Off Method

Direct Write-Off Method

In the practice of enterprises, there are often cases when goods and services are not directly sold for cash or prepayment. Instead, the company sends an invoice along with the goods or after selling the product or providing a service. A..

Articles

November 03, 2020

Charles Lutwidge
Allowance for Doubtful Accounts

Allowance for Doubtful Accounts

Regardless of how perfect and effective the solvency control system is, the company will find buyers who have not paid in time for goods and services sold on credit. Invoices that are not paid by the buyers within the due date..

Articles

November 03, 2020

Charles Lutwidge
Aging of Accounts Receivable – Definition and Examples

Aging of Accounts Receivable – Definition and Examples

In the process of financial and economic activities, the enterprise has a need to settle accounts with its counterparties. When shipping products, performing work, or providing services, an enterprise, as a rule, does not receive money in payment immediately (sale on..

Articles

November 03, 2020

Charles Lutwidge
How to Record a Credit Sale

How to Record a Credit Sale

Today, retail and wholesale trade actively uses various schemes to attract customers: providing various types of discounts, selling goods on credit, etc. Many sellers offer customers to purchase goods on credit. The buyer pays only a fraction of the cost of..

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