Basic finance terms that every entrepreneur should fully understand

May 28th, 2015
Studypool Tutor
A. T. Still University
Price: $20 USD

Tutor description

Net worth: Net worth means total equity including reserves and surplus less intangible assets like goodwill. (FA+CA) – (CL & Borrowed funds). Capital employed: Capital employed is total shareholders fund and borrowed fund. In other words, it means total sources. The formula for capital employed is: Capital employed=Share capital + reserves & surplus + P&L a/c (cr) + loans (borrowed funds).

Word Count: 9724
Showing Page: 1/24
Concept questions:Net worth:Net worth means total equity including reserves and surplus less intangible assets like goodwill. (FA+CA) (CL & Borrowed funds).Capital employed:Capital employed is total shareholders fund and borrowed fund. In other words, it means total sources. The formula for capital employed is: Capital employed=Share capital + reserves & surplus + P&L a/c (cr) + loans (borrowed funds).Return on capital employed:Return on capital employed is the return on total resources or profitability on the overall investment viz total resources utilized by the business. Total resources employed or total capital employed means the total funds at the disposal of the business.Common size statement:The determination of trends and comparisons of amounts are facilitated by use of percentage of figures instead of rupee amount. The amounts and accounts in financial statements are reduced to % and these % are presented for comparison purpose. Such statements are called common size statements.Ratio analysis:Ratio analysis is the process of computing, determining and presenting the relationships between items or group of items in the financial statements through accounting ratios. An analysis is normally undertaken for the purpose of projecting financial position or profitability, a knowledge of trends is usually more significant than knowledge of present status only. An analysis of trends through ratio analysis

Review from student

Studypool Student
" Thanks, good work "
Ask your homework questions. Receive quality answers!

Type your question here (or upload an image)

1830 tutors are online

Brown University





1271 Tutors

California Institute of Technology




2131 Tutors

Carnegie Mellon University




982 Tutors

Columbia University





1256 Tutors

Dartmouth University





2113 Tutors

Emory University





2279 Tutors

Harvard University





599 Tutors

Massachusetts Institute of Technology



2319 Tutors

New York University





1645 Tutors

Notre Dam University





1911 Tutors

Oklahoma University





2122 Tutors

Pennsylvania State University





932 Tutors

Princeton University





1211 Tutors

Stanford University





983 Tutors

University of California





1282 Tutors

Oxford University





123 Tutors

Yale University





2325 Tutors