What's it: A cash equivalent is a financial asset that can easily be converted to cash and have minimal risk of changing prices. Because of this nature, companies combine cash accounts with cash equivalents into one: cash and cash equivalents.
Financial Statement Analysis
Cash in Accounting: Meaning, Reporting, Pros, Cons
What's it: Cash is money in the form of banknotes or coins. In accounting, other examples of cash are checks, notes, and demand deposits.Cash is the most liquid asset and vital to the liquidity of the company. Companies can use them
Intangible Assets: Meaning, Types, Reporting In On The Balance Sheet
What's it: Intangible assets are types of assets with no physical substance but identifiable and flow the economic benefits to the company. Such benefits can be in the form of additional revenue, cost savings, or increasing market share.
Current Assets: Items, How to Calculate and Analysis
What it is: Current assets are cash and other assets that the company expects to be converted into cash, sold or used in a year or normal operating cycle. Why it matters: Current assets are useful for meeting liquidity needs and
Noncurrent Liabilities: Meaning, Items, Why They Matter
What it is: Noncurrent liabilities represent liabilities which due more than one year or one operating cycle. Together with current liabilities, they make total liabilities in the balance sheet. Other names for noncurrent liabilities are
Current Liabilities: Meaning, Items, How to Analyze
What it is: Current liabilities are part of liabilities which due within one year or the normal operating cycle. You can find them in the balance sheet section.Current liabilities reduce financial flexibility because the company will pay
Noncurrent Assets: Meaning, Items, Why They Matter
What it is: Noncurrent assets are long-term assets, in which the full value will not be realized during the accounting period. They represent illiquid assets. Examples are property, plant, and equipment (PP&E).Another term for noncurrent
Types of Financial Ratios: Their Analysis and Interpretation
Financial ratios are important metrics for analyzing a company's finances. In rating or stock analyst reports, we will find various ratios. Likewise, banks also use various ratios to measure a company's financial health. Ratios provide them
Cash Flow Statement: Importance, Components, Formulas, Preparing It
A cash flow statement is part of the financial statements that present a source of cash receipts and disbursements of the company during the reporting period. This report includes three subsections, cash flow from operating, investing, and financing
Shareholders Equity: Meaning, Formula and Components
What's it: Shareholder equity is money that can be associated with a company's owner or shareholder. It is a residual claim on company assets after deducting liabilities. Although there are several accounts in it, the two most significant are
Financial Statement Analysis: Scope, Required Information, Steps, And Methods
What's it: Financial statement analysis is a process to assess and evaluate the past performance and future prospects of the company. To do this, you need not only financial statements but also other relevant information. You need data such as
Income Statement: Formula, Components, and Importance
What's it: An income statement tells you the company's financial performance during a specific period, quarterly or annually. It shows you three basic elements, namely, revenue, expenses, and profit. Other names for the income statement