Breakeven Concept: Break-even analysis relates to the calculation of the necessary levels of activity required in order to break even in a given period Break-even occurs when total revenue and total costs are equal resulting in zero profit Breakeven can be calculated by units (breakeven point – BEP) or dollars (breakeven in dollars – BE$) …
Costs can be classified as fixed, variable or mixed The nature of fixed and variable costs relates to whether such costs are likely to alter in total with changes in activity Fixed costs are those costs which remain the same in total (within a given range of activity and timeframe) irrespective of the level …
The cash budget is a statement of expected future cash receipts and payments It assists decision making by: documenting timing of all cash receipts and payments helping to identify periods of expected cash shortages and surpluses identifying suitable times for purchase of non-current assets assisting with planning and use of borrowed funds providing a framework …
Rights issue — issue of new shares to existing shareholders They are either: Renounceable (i.e. investors are free to sell their rights to subscribe on the market) or Non-renounceable (cannot sell their rights) Options confer the right to subscribe to shares in the future at a price and time which are pre-determined Having issues with …
Hybrid debt securities are securities that have characteristics of both debt and equity The principal hybrid securities are convertible notes (pay interest) convertible preference shares (pay dividends) Both convert to ordinary shares at maturity Having issues with your accounting module? SMS us at +65 9758-7925 or email: enquiry@starcresto.com
Hybrid form of capital, but lean more towards equity than debt Usually have a fixed dividend Rank ahead of ordinary shares in the event that company winds up Owners cannot buy them partly paid (like ordinary shares) and owners have no voting rights Having issues with your accounting module? SMS us at +65 9758-7925 or …
No fixed maturity date – but they can be consolidated or split Payments attached to ordinary shares are called dividends – decided by directors out of profits Ranked last in the event of the company winding up Having issues with your accounting module? SMS us at +65 9758-7925 or email: enquiry@starcresto.com
What are the sources of short term finance? The most common sources of short-term finance for entities are: accrued wages and taxes trade credit bank overdrafts commercial bills and promissory notes factoring or debtor/invoice/trade finance stock/inventory loans or floor-plan finance What are the sources of long term finance? Long-term debt finance is supplied to borrowers …
Benefits Increasing sales: new customers from cash-only suppliers bring planned purchases forward impulsive purchases customers who would not otherwise have purchased Reducing the cost of making sales (eg., counter staff) Costs Opportunity cost of funds being tied up Cost of slow payers, bad debts, specialist collection services Cost of administering the system Having issues with …
Inventories or stock are normally a component of current assets for most entities involved in manufacturing or the sale of goods Types of inventories Raw materials Work in progress (WIP) Finished goods Benefits of holding inventories Sales are made and profits gained Cross-sales are made and profits gained e.g lotto and card sales in a …