Asset held with the intention of being used for the purpose of producing goods or providing services and is not held for sale in the normal course of business is known as fixed assets. Fixed assets are shown on the balance sheet at its historical cost less accumulated depreciation. Cost of fixed assets Cost of fixed asset is the purchase price and any thing that is … [Read more...] about Fixed assets on the company’s balance sheet
Inventory on the balance sheet
In simplified terms, inventory consists of items which the company owns but has not yet sold and/or consumed. Inventory is shown under the head current asset on the balance sheet because in the normal operating cycle, the company usually converts the goods into cash. Inventory for a manufacturing company consist of: Raw materialsWork-in-progressFinished goods Raw … [Read more...] about Inventory on the balance sheet
what is Retained Earnings and how its calculated
Company's profit can be distributed as dividend or retained for reinvestment within the organisation. Based on management's plan, companies in general distribute a portion of the profit as dividend and the balance left out reinvested for future growth. Retained earnings is the accumulated profit that the company earns and retain for reinvestment purpose after paying dividend … [Read more...] about what is Retained Earnings and how its calculated
Single entry or double entry bookkeeping – What is best
Bookkeeping is the process of accumulating, classifying, recording and organizing a financial transaction to facilitate day-to-day transaction of an entity for preparing financial statement. We have two systems of bookkeeping to consider: single-entry and double-entry. Based on your business size and complexity, you can use either single-entry or double-entry bookkeeping … [Read more...] about Single entry or double entry bookkeeping – What is best
How to start a Systematic Investment Plan or SIP in Mutual Fund
There are two ways to invest in a mutual fund. One is the one-time outright payment directly to the mutual fund and the other one is periodic payments to a predefined mutual fund scheme. The First type of investment is called Lump Sum investment and the second one is called SIP or Systematic Investment Plan of a mutual fund. In this article we will be discussing how to invest … [Read more...] about How to start a Systematic Investment Plan or SIP in Mutual Fund
What is Net Asset Value of Mutual Fund – NAV
Net Asset Value of a mutual fund is the price at which one unit of mutual fund is traded between investors. It’s very easy to calculate. You need to divide the total net value of the assets held by mutual fund with the total number of shares outstanding. Net Asset Value or NAV = Net Assets / Outstanding Units Net Assets as shown in the above equation is calculated by … [Read more...] about What is Net Asset Value of Mutual Fund – NAV
What Is a Mutual Fund and how it works
People have misconception that mutual fund is like a share or stock of a company where you invest to make profit. To get clarity on this topic let us understand what is mutual fund and how to make money out of it. Mutual fund is a company that has set some portfolio of stocks, bonds and other securities of different listed companies traded in stock market or available in … [Read more...] about What Is a Mutual Fund and how it works
What is Credit Reserve Ratio and Statutory Liquidity Ratio – CRR vs. SLR
RBI being a central bank of India has the responsibility to control supply of money as well as cost of credit in India. In the process of controlling or managing money in India, RBI maintains Credit Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) of banks. In this article, we will learn the meaning of Credit Reserve Ratio, Statutory Liquidity Ratio and the difference … [Read more...] about What is Credit Reserve Ratio and Statutory Liquidity Ratio – CRR vs. SLR
What Is Defensive stocks for investors?
Defensive stocks are those types of stocks which are consistently showing stable and predictable earnings irrespective of economic instability. Owners of these companies always get constant dividend and stable earnings. During a bad economic conditions, generally consumers use to avoid costly items, entertainment, travel or any other luxury items. They only buy necessary … [Read more...] about What Is Defensive stocks for investors?
How to define financial goals for your future
Financial success requires thought and planning. Setting financial goals in advance will help you to define where you want to go and how you are going to achieve it. If you do not have a clear view on your financial goals, then your aim is very less likely to be achieved. There are three major types of financial goals: near-term or short term, Mid-term or intermediate … [Read more...] about How to define financial goals for your future