What is Performance Budgeting?
The process of performance budgeting entails evaluating an organization’s performance within the context of the organization’s particular objectives as well as its overarching goals. To do this, there must be no ambiguity whatsoever on either the short-term or the long-term goals of the company. It is important that the different levels of management have their […]
What are Different Types of Financial Statements?
Financial statements provide essential tools for understanding an entity’s health and performance from various angles, whether you are an investor, creditor, stakeholder, or otherwise. The primary purpose of financial statements is to present the financial information of a company in a reliable and useful format. Financial statements provide a detailed picture of a company’s financial […]
What Are Sweat Equity Shares and Why Are They Issued?
Sweat equity shares are equity shares granted to employees of a company on favourable terms in recognition of their work. Sweat equity shares are one form of share-based compensation for employees. The beneficiaries of sweat equity shares receive incentives in exchange for their contributions to the company’s growth. Moreover, sweat equity shares encourage employees to […]
What is the Procedure to Issue Shares for Capital?
Companies issue shares to raise capital to finance their operations, such as expanding their business, developing new products, or entering new markets. When a company issues shares, it is essentially selling a piece of ownership in the company to investors. In exchange for their investment, shareholders receive a share of the company’s profits, or dividends, if the company is profitable. Typical Procedure to […]
What is Share Capital and How Does it Work?
A share is a unit of ownership in a company that represents a portion of that company’s total value and assets. Each share has a nominal or par value. A firm uses shares to obtain funds, and each share represents a unit of ownership that is offered for sale. A share represents a portion of […]
What are the benefits of business valuation?
Business Valuation A business valuation is a method for determining the value of a company and its assets. When deciding to sell their firm, the vast majority of business owners undergo an evaluation. Other causes include mergers, organisational reorganisation, and the breakdown of partnerships.Regarding the value of a firm, several factors must be taken into […]
What is valuation, and why is there a need for valuation?
Valuation is appraising or determining the worth of physical or intangible assets, securities, liabilities, and a particular firm as a going concern or any listed or unlisted corporation, partnership, or sole proprietorship. The word ‘value’ refers to an object’s material or monetary worth, which may be measured in terms of the medium of exchange. Valuation […]
What Are the Limitations of Financial Accounting?
Many of us still belief that the financial accounting system is perfect, and it would be a miracle to find something wrong with the financial accounting system. This belief is simply a delusion, and it has been said that people who don’t know the history of accounting should not talk about accounting. However, in today’s […]
What is the discounted cash flow technique?
The discounted cash flow technique is a financial forecasting method to determine how much money they will have leftover after investing in a project. The DCF method is based on the principle that a dollar today is worth more than a dollar in the future because a dollar today can be invested and earn interest. […]
What is the Price Earnings Ratio?
The Price Earnings ratio is defined as a ration that tells investors how much they’re paying for each dollar of a company’s earnings. For example, a P/E of 20 means investors are willing to pay $20 for every $1 of current earnings. This ratio is widely used in the market because it provides investors with […]