A fund flow statement describes how additional funds were described and used to which these funds were put. Fund flow is the way of raising the enterprises’ fund’s profitable size, and fund flows ensure the proper use of funds. The sources of funds are shown in the statement. Fund flow is the financial statement’s part…
Short-term liquidity of an enterprise is measured by the degree to which it can meet its short-term obligation. Liquidity implies the ready ability to convert assets into cash or obtain cash. The significance of short-term liquidity can be rapidly appreciated why the measures of such liquidity have been of great importance. The evaluation of short-term…
In SFAS 33, the evaluation of research and professional pronouncements on the subject of “accounting for the effect of price-level changes” is traced by the two inflation accounting models: historical cost/constant dollar and current cost. The two models are discussed below- Constant-Dollar (or general price-level) Accounting (CDA): Constant-dollar accounting is advocated by those who want…
A monetary item is an asset or liability carrying a value in dollars that will not change in the future. These items have a fixed numerical value in dollars, and a dollar is always worth a dollar. Monetary assets (such as cash and accounts receivable) and monetary liabilities (such as notes and accounts payable) have…
A company is deemed to have a complex capital structure if it has outstanding potentially dilutive securities such As convertible securities, options, warrants, or other stocks issue agreements. A company having a complex capital structure has to give a dual presentation of Earnings Per Share if the aggregate dilutive effect of convertible arid other securities…
The earning per share can be ear rated into an Earnings Per Share (EPS) amount, which is useful in evaluating the price or common stock. Earnings per share are the measures that provide reliability to equity shareholders as a per-share basis the amount that they can get every share hold. The earnings per share represent…
Shareholders are the owners of the joint-stock company. Generally, the company distributes a portion of its earnings to the shareholders. The part of the earnings, which is distributed among the shareholders, is called a dividend. Dividends refer to that portion of the firm’s net earnings (amounts of profits that a company pays), which are paid…
Off-balance sheet financing means a company does not include a liability on its balance sheet. It is an accounting term and impacts a company’s level of debt & liability.
A lease is a contract under which one party, the lessor (owner of the asset), gives another party (the lessee) the exclusive right to use the asset, usually for a specified time in return for the payment of rent. Leasing is the process by which a firm can obtain the use of certain fixed assets…
Liabilities are obligations to pay money, render future services, or convey specified assets. They are claims against the company’s present and future assets and resources.
Trend analysis is a comparative analysis often employed to identify an investment or group’s current arid future movements. The process may involve comparing past and current financial ratios related to various institutions to project how long the current trend will continue. This type of information is beneficial to investors who wish to make the most…
The GAAP is a group of accounting standards that are widely accepted as appropriate to the field of accounting. Accounting standards are necessary so that financial statements are meaningful across a wide variety of businesses. An accounting standard is a guideline for financial accounting. The GAAP is comprised of a large group of individual accounting…
Financial statement analysis is the are of transforming data of financial statements into meaningful information for the decision-making effort on a total basis. Financial statement analysis is the process that aims to evaluate the current and past financial positions and results of operations of an enterprise. On the other hand, utilize an even more massive…
Financial statements are integrated information of recorded events, accounting conventions and individual judgment capacity.
A cash flow statement means statements relating to information regarding the inflow and outflow of cash. Nowadays, in preparing financial statements, the cash flow statement is considered an important element. Generally, a cash flow statement is prepared for a particular period or a financial year. The primary objective of the cash flow statement is to…