Tag Archives: #WorkingCapital

Q20.16 What are the objectives of preparing financial statements ?

Preparing financial statements Website Link: Preparing financial statements: The objectives of preparing financial statements are as follows: 1.Providing Information: Financial statements aim to provide relevant and reliable information about the financial performance, position, and cash flows of an entity. They offer insights into the organization’s financial activities, enabling stakeholders to make informed decisions. 2.Assessing Performance:… Read More »

Relationship between QA and CA: What is the relationship between quick assets and current liabilities?

Relationship between QA and CA Quick assets are those current assets that can be easily converted into cash, such as cash, marketable securities, and accounts receivables. Current liabilities, on the other hand, are those obligations that are due within one year. Such as accounts payable, short-term loans, and accrued expenses. The relationship between quick assets… Read More »

What measure reflects the difference between current assets and current liabilities?

Difference between current assets and current liabilities The measure that reflects the difference between current assets and current liabilities is called working capital. Working capital is calculated by subtracting the total current liability of a company from its total current asset. It is an important metric for businesses to monitor, as it indicates their ability… Read More »

Current assets to proprietor’s fund ratio?

Current assets to proprietor’s fund ratio The current assets to proprietor’s fund ratio is a financial metric used to assess the liquidity and financial health of a business. It measures the relationship between the current assets, which are assets that expect to convert into cash within one year, and the proprietor’s fund, which represents the… Read More »

What is a working capital management?

Working capital management Working capital management refers to the process of managing a company’s current assets and liabilities to ensure that it has enough liquidity to meet its short-term obligations and operational needs. The goal of management is to strike a balance between maximizing profitability and minimizing financial risk. To visit https://www.mca.gov.in This involves managing… Read More »

What is the definition of Invoice financing in India?

The definition of Invoice financing Invoice financing also known as invoice discounting, is a form of short-term financing in which a company sells its accounts receivable (invoices) to a financial institution, such as a bank or a non-banking financial company (NBFC), at a discount. The financial institution advances a percentage of the invoice value to… Read More »

Q304 What are basic accounting terminologies?

Basic accounting terminologies Website link Basic accounting terminologies: Here are some basic accounting terminologies: 1.Assets: Resources owned by a business that has monetary value and are expected to provide future benefits. 2.Liabilities: Obligations of a business to pay debts or other financial obligations. 3.Equity: Equity refers to the ownership interest in a company or property,… Read More »

What is the difference between debtors and creditors?

Debtors vs creditors Creditors and Debtors are two fundamental concepts in accounting, representing parties involved in a financial transaction. Debtors Debtors are parties who owe money to a business for goods or services purchased on credit. In other words, a debtor is a customer who… Read More »

What is the difference between capital employed and working capital?

Capital Employed and Working Capital Capital Employed and Working Capital are two important financial metrics used to measure a company’s financial health, but they represent different aspects of a company’s finances. For more information visit this site: https://www.mca.gov.in Capital employed refers to the total amount of capital invested in a company to generate its operating… Read More »

Working capital vs Operating expenses?

Working Capital vs Operating Expenses Working capital and operating expenses are two different financial concepts in accounting that represent different aspects of a company’s financial performance. For more information to visit:https://www.mca.gov.in Working-capital represents the amount of money that a company has available to cover its day-to-day operations and short-term obligations. It is a crucial metric… Read More »