What is Authorized Share Capital? Authorized share capital is the maximum amount of shares that a company is allowed to issue, as specified in its articles of incorporation. This limit is set by the company’s shareholders and can be increased or decreased by shareholder approval. What is an example of Authorized Share Capital? An example … Read more
Its History, Types, and Importance Explained. Finance: Its History, Types, and Importance What are the 5 principles of finance? The 5 principles of finance are: 1. Time Value of Money: The time value of money is the concept that money is worth more now than it will be in the future. This is because money … Read more
“Earnings Power” is a term that refers to a company’s ability to generate profits. A company’s earnings power is determined by its ability to generate revenue and control costs. A company with strong earnings power is able to generate profits even in tough economic conditions. Which type of ratio measures the earning power of a … Read more
When a company forfeits, it gives up something of value, often in exchange for something else of value. For example, a company might forfeit its right to purchase a piece of equipment in order to get out of a contract. What is the legal effect of forfeiture? When a company forfeits, or gives up, its … Read more
A business asset is anything that is used to generate revenue for a business. This can include physical assets such as buildings, machinery, and inventory, as well as intangible assets such as patents, copyrights, and goodwill. Business assets can be divided into two broad categories: operating assets and non-operating assets. Operating assets are those that … Read more
Asset financing is a type of financing in which a company uses its assets as collateral for a loan. This can include equipment, inventory, or real estate. The advantage of asset financing is that it can provide a company with the capital it needs without having to give up equity in the business. The downside … Read more
Checks and balances refers to a system where different branches of government are empowered to keep each other in check. Where does checks and balances come from? There are three main sources of checks and balances in a corporation: the board of directors, the officers, and the shareholders. The board of directors is responsible for … Read more
Capital maintenance is the process of ensuring that a company’s capital base is sufficient to support its operations and future growth. This involves maintaining a balance between cash flows, investment and financing activities, and ensuring that the company has access to the necessary resources to meet its obligations. There are two main types of capital … Read more
Unappropriated retained earnings are the portion of a company’s profits that have not been designated for specific purposes. The board of directors may choose to reinvest these earnings back into the business, distribute them to shareholders as dividends, or use them to pay down debt. Unappropriated retained earnings belong to the shareholders of a company … Read more
CF to CAPEX is a ratio that measures how much cash flow a company has available to reinvest in capital expenditures. This ratio is important because it can give analysts an idea of how well a company is managing its cash flow and whether or not it has enough money available to reinvest in its … Read more
