Dividend is one of the most common accounting words that business owners and shareholders use. But do you know what “Dividend” means? The Dividend refers to the earnings or portion of the profit that a company pays to its investors or shareholders. A dividend is distributed among the shareholders when the company generates a profit …
Accounting for Dividend Received: Definition, Example, and Journal Entries Read More »
We’ve always heard the word “Economy” in several different ways in our daily life. Sometimes the economy pricing is used for the country, and sometimes it’s used for domestic or international purposes. If a company or a brand launches its product and sells it for a meager price with minimum margin compared to its competitors, …
Economy Pricing: Definition, Example, Advantages, and Disadvantages Read More »
The income statement is a general term that’s widely heard in the accounting world. The income statement is not just a profit and loss report. There’s a lot more to it than you may think. An income statement is a report that displays everything about a company, including its expenses, profits, losses, and income. It …
Income Statement: 3 Main Elements of Income Statement You Should Know Read More »
The current ratio is an essential financial matric that helps to understand the liquidity structure of the business. It’s especially helpful for the businesses lenders that assessability of the business to repay their dues. Retail is an industry that is expected to generate cash on a day-to-day basis, and it’s easy for lenders to get …
Definition: The average payment period is the measure of days the business takes to pay off accounts payable. It’s a solvency ratio and indicates business practice to satisfy obligations that fall due. The length of the average payment period is dependent on multiple factors including business policies, liquidity, adequacy of financial planning, and pattern of …
Average Payment Period: Definition, Formula, and Example Read More »
The current ratio is a widely used metric in financial analysis; it compares current assets with the current liability to assess if the business has sufficient liquid funds. If current assets of the business exceed current liability, the liquidity is assessed to be in good shape and vice versa. This article aims to study the …
A credit balance refund applies when you have a negative credit card balance. You may need to apply for a credit balance refund for several reasons. There are several methods to apply for a credit refund as well. As such, a negative credit card balance does not affect your credit score. As an alternative, you …
What Is Credit Balance Refund? All You Need To Know Read More »
Overview Profit margins are the bottom line of any business. Investors and business managers compare profit margins with industry averages. Some industries have high average profit margins, for example, the accounting and finance industry has typically higher profit margins around 18-20%. However, it’s important to remember that profit margins vary by industry. Analysts must also …
Average Profit Margin by Industry (Explanation and Examples) Read More »
Overview The quick ratio is one of the key liquidity ratios used by analysts. It is simple to understand and a widely used measure to analyze the liquidity of a company. Generally, any quick ratio above 1 will be considered reasonable. However, benchmarking is a great tool to analyze the liquidity of a company. Analysts …
Average Quick Ratio by Industry (Explanation and Example) Read More »
Overview Backward integration refers to gaining control of the supply-side of a company. It may come through acquisition and merger or arranging in-house production of raw material. Backward and forward integrations are essential parts of vertical integration. It offers several advantages to the company, including increased control over raw material supply, competitiveness, reduced costs, etc. …
What is Backward Integration? Definition, Advantages, and Disadvantages Read More »
