What is Business Entity Concept?
The business entity concept is a fundamental accounting principle that defines a business as a separate economic entity from its owners. This principle is crucial for accurately recording financial transactions and understanding a business’s financial performance. Accordingly, there are differences in transactions made as business as a person and the owner as a person. The […]
The Impact of Inventory Control on Business Profitability
Efficient inventory control is key to keeping a profitable and smooth-running business. Strategic stock levels management prevents businesses from wastage, lowering holding costs, and avoiding stockouts that end in lost sales. In contrast, inefficient inventory control can bring overstocking, higher storage costs, and cash flow issues. Proper use of inventory control practices can optimize businesses’ […]
The importance of gearing ratios in financial analysis
Financial gearing ratios are financial metrics that compare a firm’s debt to other financial metrics such as company equity and assets. The primary purpose of evaluating financial gearing ratios is to Measure the Company’s financial leverage level and determine the degree of company activities financed by shareholders’ equity compared with credit finance. Gearing ratio analysis […]