Recording transactions, management of business, compliance and measuring performance.
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CAPITAL INCOME
Income that is derived from capital e.g. stock dividends.
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REVENUE INCOME
Income generated by sales of goods or services e.g. profit.
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SHARES GENERATE INCOME
It is a type of unearned income because this is a way of money coming into the business and if the business decides to sell shares to other firms.
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OPERATING PROFIT
operating revenues minus operating expenses.
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COGS
Beginning Inventory + Purchases Made During the Reporting Period - Ending Inventory.
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OPENING INVENTORY
Add ending inventory and cost of goods sold.
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CLOSING INVENTORY
Opening inventory + Net Purchases - COGS
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PURCHASES
Subtract beginning inventory from ending inventory.
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ASSETS
Asset is an economic resource. Anything tangible or intangible that can be owned or controlled to produce value.
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3 NON-CURRENT ASSETS
Goodwill, brand recognition and logos.
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3 CURRENT ASSETS
Cash, inventory and liquid assets
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GROSS PROFIT MARGIN
Subtracting cost of goods sold (COGS) from total revenue and dividing that number by total revenue.
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BALANCE SHEET
A statement of the assets, liabilities, and capital of a business or other organization at a particular point in time, detailing the balance of income and expenditure over the preceding period.
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WORKING CAPITAL
Subtracting the current liabilities from the current assets.
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CURRENT
The concept that assets and liabilities be measured at the current value at which they could be sold or settled as of the current date
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CURRENT RATIO
Dividing your current assets by your current liabilities.
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