Equity

Equity is a broad based term used in business. It has several definitions. The primary definition is associated with the equity section of the balance sheet. It refers to the financial position of the owners of a business.

Financial Statements for the Small Business

Financial Statements

Financial statements serve the purpose of presenting economic activity and status related to a particular date and over a particular time frame. Accountants record monetary transactions and via financial reports present the information in an easy to understand format. The financial statements for a small business do not have to comply with those of publicly traded operations.

Negative Basis in Business – Tax Shelters

Negative Basis in Business

Negative basis in business refers to the value of the equity investment in the company. It literally means you have no actual equity investment and worse you owe somebody money because other parties have fronted the necessary capital to make the business viable.

Convertible Debt

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. The holder of the convertible instrument has a choice, continue to collect interest as a debt instrument or convert the debt to equity. 

Long Term Debt – Explanation and General Understanding

Long-Term Debt

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 the cash outlays to service.

Crowdfunding in Small Business

Crowdfunding

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. The crowd is financing the project or goal. This is very similar to how large non-profits address significant events worldwide. A good example is the American Red Cross addressing disaster relief in the aftermath of a major natural tragedy. 

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