What Is Invested Capital? Invested capital is the total investment by shareholders and bondholders when a company raises money by selling stock shares or issuing bonds. Debt, capital leases, and stockholder’s equity are all shown separately on the balance sheet. Therefore, invested capital is not a line item in the company’s […]
Accounting
35 posts
What Is Cost-cutting? Cost-cutting occurs when an organization strategically reduces expenditures and directly implements measures to improve profitability. Measures implemented by a corporation to cut costs and expenses while boosting profitability are referred to as cost reduction. These steps are often taken when a company is in financial difficulties or […]
PEG Ratio – What Is the Price/Earnings-to-Growth? The PEG ratio is a metric that assists in determining the value of a stock by comparing market price, earnings, and future growth potential. The PEG ratio is the price/earnings to growth ratio. It is a stock’s price-to-earnings (P/E) ratio divided by the […]
What Is a Statement of Retained Earnings? A statement of retained earnings shows the accumulated portion of a business’s profits that are not distributed as dividends to shareholders. The retained earnings statement is a financial disclosure that shows how a company’s retained earnings have changed over time. Analysts use this […]
What Is a Variable Interest Entity (VIE)? A variable interest entity (VIE) is a legitimate business structure where an investor can have controlling interest without holding majority voting rights. A variable interest entity is a legal corporate structure. It is established such that a single investor can control the company […]
What is the Acid Test Ratio? The acid test ratio is the most stringent calculation of short-term liquidity. It compares a company’s quick assets to its current liabilities. For that reason, the acid-test ratio is also known as the quick ratio. It gauges a company’s liquidity by evaluating how well […]