In accounting, assets are categorized by their time horizon of use. Fixed assets, also known as noncurrent assets, are expected to be in use for longer than one year. As a result, unlike current assets, fixed assets can undergo depreciation over time. Proper management and maintenance of business assets can help a…
Understanding the operating cycle is crucial for businesses as it impacts their liquidity, profitability, and overall financial health. The operating cycle, often referred to as the cash conversion cycle, is a fundamental concept in financial management. It represents the time it takes for a business to convert its investments in…
It tracks the expenditure that incurs out of funds and if the usage is in such a field was against those funds (conditions provided by donor). Given the presumably limited amount of funding available each year, this is a critical tool for non-profit management. Funds are intended to restrict the…
The double-entry system creates a balance sheet made up of assets, liabilities, and equity. The sheet is balanced because a company’s assets will always equal its liabilities plus equity. Assets include all of the items that a company owns, such as inventory, cash, machinery, buildings, and even intangible items such…
The double-entry system creates a balance sheet made up of assets, liabilities, and equity. The sheet is balanced because a company’s assets will always equal its liabilities plus equity. Assets include all of the items that a company owns, such as inventory, cash, machinery, buildings, and even intangible items such…
For instance, let’s say you own a retail company and are considering a proposed growth strategy that involves opening up new store locations in the hopes of benefiting from the expanded geographic reach. Thus, the project is deemed illiquid and the probability of there being comparatively more profitable projects with…