Wikiaccounting

How to Calculate Working Capital? (Detail explanation with example)

The company’s working capital is important for the number of key stakeholders including executives, employees, and shareholders, and investors. Positive working capital simply means the company’s current assets at the reporting are higher than its current liabilities. That means, in the short-term, around 12 months from the reporting date, the company could use the current […]

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5 Key Components of Working Capital (Explained)

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 number of liquid assets which are using by the company to conduct their business. Working capital should be efficiently used in order to achieve long term growth and profitability. It is one

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Is negative working capital always bad? (Explained with example)

Working Capital

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 follows: Net working capital = Current Assets – Current Liabilities

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Unqualified audit report: Why is it important?

Audit Opinion

Overview Entity’s financial statements are normally audited annually by an independent audit firm as per management’s intention, the board’s requirement, and or by law. Big four audit firms are the well-known auditors that provided audit services. Basically, if auditor found no major issue on the financial statements they will issue the unqualified report. Unqualified Audit

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Working Capital Ultimate Guide: Definition, Calculation, Example, and More

Working Capital

Definition: Working capital is a term commonly used for the capital required for day-to-day working in a business entity, purchasing raw materials to be used in production, and meeting daily expenditures like salaries, wages, advertising, etc. It is also popularly called circulating capital due to its nature, which keeps changing. Working capital depicts those assets

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Capitalization of Dismantling Costs – Why Is It capitalized?

Fixed Assets

IAS 16 is the accounting standard that deals with property, plant, and equipment. There are numbers of items elements said in paragraph 16 of this standard that allows capitalizing as assets. Those items included: Its purchase price of fixed assets Import duties of assets and non-refundable purchase taxes. Discount and rebate should not take into

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How Do Cash Dividends Impact Financial Statements?

Dividends, Financial Statements

Cash Dividends: Cash dividends are declared by the board of directors “BOD” and paid to the stockholders or shareholders of the company. The BOD normally approves to pay the cash dividend at an annual general meeting of the company. It is the distribution of a part of the company’s retained earnings for the year. The

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How Do Cash Dividends Affect the Statement of Cash Flow?

Dividends, Financial Statements

The dividend is the total amount of money issued paid by the company to its shareholders from their profit. At the end of every financial year, every company announces calculate their profit & loss on the basis of transactions that occur during the year. If the company earns some profit during the year, then the

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Which Financial Statement Shows a Company’s worth?

Financial Statements

Net worth is termed as the book value or its owner’s capital in the company. The net worth of the company is the balance of all assets value subtracting the amount of liabilities where we could find on the balance sheet. Financial statements are prepared to inform the company’s stakeholders about the performance and worth

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How Is Petty Cash Reported in Financial Statements?

Financial Statements

Petty cash is a part of an organization’s cash in hand, used explicitly for small day-to-day expenditures which are not required to have a complicated authorization process. This amount is also used for all the expenses for which it is take too long to pay through bank transactions like issuing checks or bank transfers, and

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