Basics 6 min read
Need for a Theory of Accounting to Improve the Accounting Profession
Creative Accounting and the Need for a Theory of Accounting The rise of “creative accounting” practices, an euphemism for hiding some unfavorable…
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Basics 5 min read
Need for a Uniform and Common Theory of Accounting
The frequent attempts by experts and professionals on having a “theory” that would guide accountants all over the world is…
Basics 1 min read
Working Capital Cycle
Generation and disbursement of cash is carried out in the manner depicted by the following diagram:
Basics 1 min read
Gross Working Capital and Net Working Capital
Gross working capital means the investment in current assets, whereas the Net working capital means the difference of current assets…
Basics 1 min read
Management Accounting – Working Capital
Working capital is defined by experts as follows – “Working capital is the amount of funds necessary to cover the…
Basics 3 min read
Management Accounting – Useful Ratios
Short–term Financial Position or Test of Liquidity (a) Current Ratios = Current AssetsCurrent Liabilities (b) Quick or Acid Test or…
Basics 3 min read
Classification on the Basis of Financial Aspects
Ratios can be further classified based on their functional aspects as discussed below. Liquidity Ratios Liquidity ratios are used to…
Basics 2 min read
Ratio Classification on the Basis of Financial Statement
Balance Sheet Ratios Ratios calculated from taking various data from the balance sheet are called balance sheet ratio. For example,…
General Concepts 3 min read
Residue Curve Maps
The most simple form of distillation, called simple distillation, is a process in which a muticomponent liquid mixture is slowly boiled…
Basics 2 min read
Limitations of Ratio Analysis
Although Ratio Analysis is a very useful accounting tools to analyze and interpret different accounting equations, it comes with its…
Basics 1 min read
Advantages of Ratio Analysis
● It is powerful tool to measure short and long-term solvency of a company. ● It is a tool to measure profitability…
Basics 1 min read
Ratio Analysis and its Applications
Ratio analysis is a medium to understand the financial weakness and soundness of an organization. Keeping in mind the objective…
