Finance

Capitalization of Profits: How Does It Work? Benefit and Limitation

Capitalization of profits refers to the conversion of the retained earnings of a company into capital which can then be issued to the company’s shareholders in the form of dividends or stocks. Usually, the latter option of giving stocks is preferred to paying dividends. This option is mainly chosen by companies that do not want …

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ACCOUNTING ENTRY FOR RIGHT SHARES ISSUE: ACCOUNTING ENTRY, DETAILED EXPLANATION

Equity finance is one of a company’s most important sources of finance. Equity finance can have many advantages and disadvantages for a company. One of the main disadvantages of equity finance for a company is that equity finance dilutes the ownership and control of the company. Usually, existing company owners may not want to dilute …

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How Does Reduction Of Working Capital Help The Company Improve Their Cash Flows?

Introduction Working Capital Management tends to be one of the most crucial impacts on the business because it impacts the company’s liquidity position. This is an increasingly important metric for the company because of the reason that it ensures that they can meet their day-to-day operational expenses in a smooth matter. Working capital directly reflects …

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