What is Credit Risk?
Credit risk is a term used to describe the potential financial loss a lender may experience when a borrower fails to repay a loan or credit. In other words, it is the risk of default on a loan or the risk of loss of principal or interest. Credit risk is a significant concern for banks, […]
Top 5 Career Options for Accounting Graduates
If you’re an accounting graduate, congratulations on completing a rigorous academic program that has prepared you for a bright future in the business world. With a degree in accounting, you have a wide range of career options. In this post, we’ll explore the top 5 career options for accounting graduates so you can choose your […]
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 […]
What is a Funds Flow Statement?
A funds flow statement is a financial statement that shows how funds have moved in and out of business during a specific period of time. It is a tool used by businesses to understand their cash flow and identify areas where they can improve their financial position. The funds flow statement captures the movement of […]
What is the Cost of Goods Sold? Definition | Formula
Cost of Goods Sold (COGS) is a financial metric representing the cost of the products or services a company sells during a given period. It is an important expense item on a company’s income statement and is calculated by subtracting the cost of goods sold from the company’s revenue. COGS is calculated using the direct […]
Understanding the Face Value of a Share: A Beginner’s Guide
If you’re new to the stock market, you may have heard the term “face value” being used when referring to shares. But what does it actually mean? In this article, we’ll explain what the face value of a share is and how it impacts investors. What is Face Value? The face value of a share […]
What is a Stock Exchange? Features and Functions
The stock exchange is an essential part of the financial system that allows investors to buy and sell securities such as stocks, bonds, and other financial instruments. The stock exchange provides a platform for companies to raise capital and for investors to earn investment returns. In this article, we will explain the features and functions […]
What is a Joint Venture? Meaning and Purpose
A joint venture is a business agreement between two or more parties to pool their resources to achieve a goal or undertake a specific project. The parties involved in a joint venture agree to share the risks, costs, and profits of the venture. A joint venture can take many forms, such as a limited liability […]