Month: January 2022

Ratios can be used in the following ways: – 1. To evaluate the ability of a firm to meet short-term maturing financial obligations as and when they fall due (liquidity ratios). 2. Ratios indicate the ability of a firm to Read More …

Financial statement analysis is the process of identifying the strength and weaknesses of the firm by establishing and analyzing the relationships between various items in the financial statement. This relationship is expressed by the use of ratios. Basic Financial Statement Read More …

The term debenture is used when a limited company receives money on loan, and certificates called debenture certificates are issued to the lender. They are also called loan stock or loan capital. Debenture interest has to be paid whether profits Read More …

The profit and loss account of a company, is the same as that of a sole trader, but there are additional expenses that are unique to the company and therefore, they should be included in the in this account (e.g.) Read More …

The owner’s interest in a limited company consists of share capital. The share capital is divided into shares. A share is the smallest unit of ownership in a company. The investor will then pay for and be issued with the Read More …

Limited companies come into existence because of the growth in size of business and the need to have many investors in the business. Partnerships are not suitable for such businesses because the membership is limited to twenty persons. There are Read More …