Tag: Equity
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Convertible Debt
In poker, deuces are often called the wild card. You can use the card as a ‘Two’ or as any other card in the deck. In effect, you can convert the card to something else. Well, convertible debt uses the same principle in business.
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Long Term Debt – Explanation and General Understanding
In the arsenal of capitalizing a business operation, long term debt serves as one of the primary sources of capital. If you are an owner of a small business, you need to understand the relationship this source has to the overall financial status of the company. Too much debt and the owner is burden by…
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How Much is a Fair Profit? – Part IV of V Return on Capital
For all investors in business, capital is the fronted equity an investor risks in exchange for a return. This return can range from zero to infinity depending on the success of the business. A fair profit is really a function of four different factors.
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Crowdfunding in Small Business
The process of collecting a large pool of investors, each contributing or investing a small amount of dollars for a highly focused project is referred to as crowdfunding.
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Three Primary Characteristics of Successful Businesses
Over the last 27 years of working in the world of accounting, I have become convinced that to be successful in business, you must have three primary characteristics. It is the common thread that binds all successful operations in every industry I have witnessed.
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Trial Balance – Purpose and Interpretation
The trial balance is an accountant’s report used to identify issues with the respective ledger accounts.
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Dividends and Distributions – Use in the Proper Context
Dividends and distributions refer to the payment of cash to investors. Why are there two separate terms? Well, the term is tied back to the type of entity that makes the payment.
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Capital Account – Business Partnerships and Limited Liability Companies
A ‘Capital Account’ is a term used in partnership and in limited liability company business formats. It refers to the individual balances in the equity section of the balance sheet. The basic formula for value is beginning balance plus contributed capital plus earnings from the current accounting period less any withdrawals