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
Finance
Beginner’s guide to Bookkeeping and Accounting Process
In an organization, financial transactions are recorded timely and accurately in the books of accounts. With that recorded information, the accountant analyze, review and prepare various reports. The entire process is known as accounting of which bookkeeping is a very important part. Bookkeeping is generally defined as the process of accumulating, classifying, recording … [Read more...] about Beginner’s guide to Bookkeeping and Accounting Process
Current asset on the balance sheet
When you look at the asset side of company’s balance sheet, you will find a category at the end of the balance sheet called current asset. It will let you know the liquid capital the company has to pay its current liabilities. This means, it will tell you how much money is available with the company for business immediately. Under current assets, you will find those assets … [Read more...] about Current asset on the balance sheet
How to calculate Price earnings to growth ratio – PEG
PEG or price earnings to growth ratio is simply calculated by taking P/E ratio and dividing it by earnings growth rate. Price to earnings is the most important component of PEG calculation. Price to earnings ratio is calculated by taking current market price of the stock and dividing it by the earnings per share or EPS. Normal Price to earnings ratio is not considering … [Read more...] about How to calculate Price earnings to growth ratio – PEG
How crowdfunding works – A Beginner’s Guide
Crowdfunding is the pooling of money in small amount from a large number of people, using the internet and social media. Money can be raised to fund a project or for charity or to start a new business. There are three major players involved in crowdfunding: The campaignerCrowd or backers or investorsPlatform The campaigner is the person who is looking to raise money … [Read more...] about How crowdfunding works – A Beginner’s Guide
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 calculate Book value per share of a company – BVPS
Book value of a company represents assets minus liabilities of the business. It's the amount that will be distributed to stockholders in case the company is liquidated. If Book value is negative, it means company's liabilities exceeds assets. Its also called shareholders equity or net assets of a company. To calculate Book value per share or BVPS, you need to divide … [Read more...] about How to calculate Book value per share of a company – BVPS
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
How to calculate Price to earnings (PE) ratio and its importance in Investing
Price to earnings (PE) ratio simply describes the relationship between the current market price and the earnings per share (EPS) of the stock. You will get a stock’s current Price to earnings ratio by dividing the price by the current earnings per share. PE ratio is also popularly known as earnings multiple. Here is the mathematical formula to calculate PE … [Read more...] about How to calculate Price to earnings (PE) ratio and its importance in Investing
Repo rate vs. Reverse Repo rate: What is the difference
In this article, we will be discussing the difference between repo and reverse-repo rate. To understand reverse repo rate, we first have to understand what repo rate is. For short term requirements, banks in India can borrow money from the Reserve Bank of India (RBI) to lend money to customers. When banks borrow money from the the Reserve Bank of India (RBI), they pay … [Read more...] about Repo rate vs. Reverse Repo rate: What is the difference