How does Debt Financing work? When a company raises money by selling debt devices, most commonly in the form of bank loans or bonds What is Debt Financing? A company raises money by selling debt instruments like bank loans or bonds. It is a type of financing known as financial leverage. […]
Who uses management accounts? Management accounts are information that provides the business’s financial performance—usually used by the following people interested in the industry. Why produce them? The owner has to know the sales, profitability, and shortage of cash & liquidity. Most businesses don’t know their profitability, margins, and trends. So why […]
I am developing a Partnership business structure. What is a partnership business? A specific kind of legal relationship An agreement is made among two or more individuals to conduct a business as co-owners. It could vary in the types of partnerships and the levels of involvement. A business partnership is a […]
Cash basis accounting for the self-employed. Cash basis accounting. It is a way to work out your income & expenses for your self-assessment tax return if you are a sole trader. If you run a small business, cash basis accounting will be ideal rather than traditional accounting. You must declare when […]
How could an accountant help your business? Every good business will have an excellent entrepreneur; besides, there will be an accountant. Implementing an accounting system helps the company start completely controlling its finances, such as minimizing tax payments and keeping overheads to the minimum. People who run a successful business may […]
Purpose of Management accounts The information from Management Accounts informs how each part of the business has been performing and thereby guide decision-making to benefit the company’s future performance. Measure the gross margin percentage. What are Management Accounts? Everybody has heard of management accounts, so everybody knows what they are. Well, […]
Many businesses face cash flow problems because of the delay in receiving customer payments, which brings many difficulties. They use invoice financing to overcome that issue by receiving 75% to 95% of the value of the invoice from the lenders. The invoice finance provider takes control of the payments, such as […]
How do you work out retained earnings? What has retained earnings? Usually calculated at the end of each financial year by doing the profit and loss account and then deducting any dividends paid out. Then the balance is carried forward to the following year and shown in the balance sheet. Usually, […]
*Gross profit and stock valuation Gross profit is shown in the income statement as a figure after deducting all the associated costs in producing your product or services from the sales that are called the gross profit. In another format, Gross profit= Sales- Cost of goods. After calculating the gross profit, […]