Category Archives: Accounting

Managerial Accounting

Accounting is often defined as the backbone of any corporation or business. Without the numbers explaining the day-to-day operation, it’s tough to tell how well or how poorly said company is doing. In order to simplify accounting as a whole, it is easiest to split it into two separate definitions. On one side, there is Read More…

The Love of Money: Audits and Fraud

The love of money… A Case of Fraud at LocatePlus Holdings Corporation   In business, greed comes most frequently not in the pursuit of profit but in the form of financial fraud. Individuals who lack or loosen their ethical restraints often rationalize their behavior as unavoidable or good-intentioned. But, make no mistake, people who commit Read More…

Corporate Debt

Do you ever wonder how companies have the money to build new stores, develop new products, or perhaps even buy another company? Usually companies do not keep enough cash for these transactions sitting in their bank account – it needs to be raised from outside investors. There are two main ways a company can fund Read More…

Ownership and Dividends

Why Own a Stock? Owning a share in a company means that you are an integral part of the puzzle that helps the company tick. Whether Facebook () or Amazon (), your investment has made you a part of the company. There are many caveats that come with being a part owner of a company: Read More…

Issuance of Stocks and Paying Dividends

Big corporations are very powerful entities that can possess more capital than some countries in the world. However, every company begins as a small start-up business. These businesses grow with the injections of capital, both from the founders and from other investors. Going Public At one point, a company’s plans become so big that it Read More…

What is Solvency?

Understanding financial solvency is as important to an investor as it is to a financial manager. Whether it’s having the money to pay off a friendly wager or having the capital to pay off a commercial loan, being solvent is necessary to achieve long-term success. Solvency is the possession of assets in excess of liabilities, Read More…

Cash Planning

A cash budget is used internally by management to estimate cash inflows (receipts) and outflows (disbursements) of cash during a period and the cash balance at the end of a period. In other words, a cash budget is a plan for an organization to obtain and use resources over a specific period of time. This Read More…

Cash Flow Analysis

Cash flow is a concept in accounting that refers to the spending or receiving of cash by an organization.  For a given period, cash flow is calculated by ending cash balance less starting cash balance.  It is important not to confuse cash flow with earnings, as cash flow is related to solvency (or how well Read More…

Operating Ratios

Operating ratios are a class of ratios that are meant to analyze how well a company is using their assets. Specifically, these ratios show how well a company utilizes its assets to create revenue. Like many of the ratios that are used in financial analysis, operating ratios are complex ratios. Some use simple measures in Read More…

GAAP – Gains and Losses

Revenue vs Gains Revenue and Gains are related fields related to the income a company receives. The main difference between them is the source of the income. Revenue Revenue represents income earned by the firm through the primary goods and/or services provided. It is the income earned from the firm’s operating activities. For example, Mike’s Read More…