Assets are resources that either an individual or a company uses. Someone’s personal assets may consist of their work experience or a life insurance policy, while a business’s assets include things the company can use to generate revenue, like inventory or employees. Asset Definition An asset is typically any useful thing or something that holds …
The accounting equation is a formula and principle in accounting that says a company’s assets must be equal to its liabilities and equity — otherwise, the company hasn’t recorded its transactions accurately. This equation relies on the double-entry system of accounting, where every transaction results in positive or negative changes to at least two of …
Revenue is the amount of money a company makes from selling goods or services. Companies typically report their revenue on financial statements, like income sheets, and finance professionals rely on revenue to determine a business’s profitability. For straightforward business models, companies can calculate revenue fairly easily, but the more complex the business, the harder revenue …
Understanding how to calculate profit margins is a core responsibility of accountants and many other finance professionals. Profit margins are an easy way to determine if a company is profitable (making more money than it spends) and can inform decisions like investing options and budgeting. What Is a Profit Margin? A profit margin is a …
How to Calculate Profit Margins: Definition and Examples Read More »
Essential accounting skills include strong attention to detail and an understanding of financial statements. When writing your accounting resume, skills should be a priority: you want to convey an in-depth knowledge of accounting principles and proven reliability and adaptability. But, what skills do you need for accounting resumes? Read on to find out! Must-Have Skill …
Technical analysis is the practice of predicting the future using historical price and volume data. Using principles set out by Charles Dow in the late 1800s, technical analysis involves finding patterns and forecasting future prices. While that may seem confusing, it is fairly straightforward in concept. In this guide, we’ll go over: What Is Technical …
A P/E (price-to-earnings) ratio is a metric that compares a company’s share price to its annual net profits. This ratio can be used to compare companies of similar size and industry to help determine which company is a better investment. A P/E ratio is also an important metric to help determine the future profitability and …
A merger takes place when two companies combine to form a new company. Companies merge to reduce competition, increase market share, introduce new products or services, improve operations, and, ultimately, drive more revenue. Understanding mergers is essential if you’re considering a career path in mergers and acquisitions (M&A), a branch of investment banking and corporate …
What is a Merger? Definition, Types, and Examples Read More »
Debt capital markets (DCM) is a division of investment banking and a concept in corporate finance. As a financial concept, debt capital markets are places for companies and governments to buy and sell debt to raise capital or make profits. DCM divisions of investment banking companies facilitate the creation and sale of these tradable debt …
An initial public offering, or an IPO, is when a private company decides to go public and make its shares available to the public market for the first time. Many well-known companies have gone through the IPO process, such as Meta (Facebook) and General Motors. Going public is alluring for many private companies because they …
