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Key Components of Working Capital

The difference between a company’s current assets and current liabilities is called working capital. You can say that the working capital is the amount of liquid assets which are using by the company to conduct their business. Working capital should be efficiently...

Is negative working capital always bad?

Working capital: In accountancy, working capital is a measure of the ability of a company to pay off its short-term debts within a year or sooner. It reflects the liquidity of a company and can be calculated by deducting current liabilities from current assets as...

Why is Working Capital Negative?

Introduction: Working capital is the amount of company’s current assets less the amount current liabilities; this capital of a business is required to fulfill the daily trading operation of a business. Net working capital is normally positive when total current...

Unqualified audit report

Overview Entity’s financial statements is normally audited annually be an independence audit firm as per management's’ intention, board’s requirement, and or by law. Big four audit firms are the well-known auditors that provided audit services. Basically, if auditor...

Working capital ultimate guide

Definition: Working capital is a term commonly used for capital required for day to day working in a business entity, for purchasing raw materials to be used in production, for meeting daily expenditures like salaries, wages, advertising, etc. It is also popularly...

Capitalization of dismantling costs

IAS 16 is the accounting standards that deal with property, plant and equipment. There are numbers items elements said in paragraph 16 of this standard that allow to capitalize as assets. Those items included: Its purchase price of fixed assetsImport duties of assets...