Accounting Tools

JANUARY 24, 2024

What is Debt? Debt is an amount owed for funds borrowed. The lender agrees to lend funds to the borrower upon a promise by the borrower to pay interest on the debt, usually with the interest to be paid at regular intervals. A person or business acquires debt in order to use the funds for operating needs or capital purchases.

Corporate Finance 40

Corporate Finance Tax Accounting Accounting 40

Accounting Tools

JANUARY 26, 2024

What is a Debt Service Fund? A debt service fund is a cash reserve that is used to pay for the interest and principal payments on certain types of debt. It also enhances the accountability of the borrower, which is being forced to set aside a portion of its earnings to make the designated debt payments.

Auditing 40

Auditing Accounting Accounting 40

Accounting Tools

JANUARY 24, 2024

What is Debt Financing? Debt financing is the use of a loan or a bond issuance to obtain funding for a business. The reasons for debt financing include obtaining additional working capital , buying assets , and acquiring other entities. When debt financing is obtained, the borrower incurs an obligation to pay back the funds.

Corporate Finance 40

Corporate Finance Tax 40

Accounting Tools

JANUARY 24, 2024

A credit rating agency is a company that reviews the creditworthiness of an entity that is in the process of or has already issued debt. The resulting credit ratings are used by investors to evaluate whether they should invest in debt securities.

Corporate Finance 40

Corporate Finance 40

Accounting Tools

FEBRUARY 1, 2024

A credit rating is a standard score assigned to an entity or its securities by a credit rating agency , based on a review of its financial condition. If a credit rating is sufficiently high, investors will likely accept a lower effective interest rate on any debt issued by an entity, on the grounds that there is a low risk of default.

Collections 40

Collections 40

Accounting Tools

OCTOBER 24, 2023

Related Courses GAAP Guidebook The accounting for convertible securities involves recognizing the conversion of debt securities into equity. A convertible security is a debt instrument that gives the holder the right to convert it into shares of the issuing entity.

Accounting 40

Accounting Accounting 40

Counto

APRIL 23, 2024

It includes cash, marketable securities, and accounts receivable—assets that can be quickly converted into cash within 90 days. A quick ratio of 1 or above is typically considered healthy, indicating that the company can meet its debt obligations without selling any inventory. in quick assets to cover them.

Accounts Receivable 52

Accounts Receivable Accounts Receivable Account Receivables Accruals 52

Accounting Tools

MARCH 2, 2024

The term can also refer to the sale of a security that requires immediate delivery. Therefore, there is no risk of a bad debt. Without any bad debt expense, the seller can theoretically lower its prices and still generate a profit, which allows it to increase its market share by pricing lower than the competition.

Bookkeeping 40

Bookkeeping Billing 40

Accounting Tools

MARCH 22, 2024

A deficiency claim is that portion of a claim secured by a lien on property that exceeds the value of the property. In this case, the creditor is granted a secured interest up to the value of its collateral , while any excess amount of its claim over the value of the collateral is classified as an unsecured claim.

Collections 40

Collections Tax 40

Accounting Tools

OCTOBER 14, 2023

A subordinated debenture is a bond classified lower than more senior debt in the event of a default. This means that the holders of more senior securities are paid first, before any residual funds are made available to the holder of the subordinated debenture. Related Articles Subordinated Debt

Corporate Finance 40

Corporate Finance 40

Accounting Tools

APRIL 7, 2024

Issuance costs are those expenditures associated with underwriting and issuing debt securities and equity securities. Issuance costs include audit fees, investment banking fees, legal fees, marketing expenses, and Securities and Exchange Commission (SEC) registration fees. What are Issuance Costs?

Financial Statements 40

Financial Statements Corporate Finance Auditing 40

Accounting Tools

JUNE 7, 2023

Financial leverage is the use of debt to buy more assets. However, an excessive amount of financial leverage increases the risk of failure, since it becomes more difficult to repay debt. The financial leverage formula is measured as the ratio of total debt to total assets. Leverage is employed to increase the return on equity.

Corporate Finance 75

Corporate Finance Financial Statements Tax Financial Analysis 75

Accounting Tools

OCTOBER 2, 2023

When a debtor enters Chapter 11 bankruptcy protection, unsecured claims do not receive priority for payment; instead, these claims are only paid after all secured claims have been settled. Creditors state on the form a description of the debt , its amount, and whether it is a secured or unsecured debt.

Collections 40

Collections Billing Tax 40

Accounting Tools

FEBRUARY 12, 2024

Examples of growth assets are: Equity securities Rental property Antiques Defensive assets generate income for the holder primarily from interest. Examples of defensive assets are: Debt securities Savings accounts Certificates of deposit Tangible and Intangible Assets Assets may also be classified as tangible or intangible assets.

Deposits 75

Deposits Accounts Receivable Accounts Receivable Account Receivables 75

Accounting Tools

AUGUST 27, 2023

Related Courses Corporate Cash Management Corporate Finance Treasurer's Guidebook What is Funded Debt? Funded debt is money acquired through the sale of long-term securities. The most common type of funded debt is bonds. The concept is usually applied to debt instruments that do not mature within the next 12 months.

Corporate Finance 40

Corporate Finance 40

Accounting Tools

OCTOBER 14, 2023

Related Courses Corporate Cash Management Corporate Finance Treasurer's Guidebook What is Subordinated Debt? Subordinated debt is a debt obligation that has a lower payment priority than more senior debt. Thus, the claims of more senior debt holders must be satisfied before the holders of subordinated debt can be paid.

Corporate Finance 40

Corporate Finance 40

Accounting Tools

APRIL 14, 2024

Conversion of Convertible Debt The third party may have concluded that the convertible debt it holds in a business represents a worse return than the return to be gained if the debt is converted into stock. Related Articles Equity Kicker Private Investment in Public Equity

Corporate Finance 40

Corporate Finance 40

Accounting Tools

JUNE 12, 2023

The asset line items to be aggregated for the calculation are cash , marketable securities , accounts receivable , prepaid expenses , inventory , fixed assets , goodwill , and other assets. All of the asset and liability line items stated on the balance sheet should be included in this calculation.

Financial Statements 75

Financial Statements Accounts Payable Accounts Payable Accounts Receivable 75

Accounting Tools

APRIL 24, 2024

It is calculated as follows: (Cash + Marketable securities + Accounts receivable) ÷ Current liabilities = Quick ratio Related AccountingTools Courses Business Ratios Guidebook Financial Analysis The Interpretation of Financial Statements Current Ratio The current ratio compares all current assets to all current liabilities.

Financial Analysis 75

Financial Analysis Accounts Receivable Accounts Receivable Account Receivables 75

Accounting Tools

JUNE 21, 2023

A mortgage payable is the liability of a property owner to pay a loan that is secured by property. Any portion of the debt that is payable within the next 12 months is classified as a short-term liability. From the perspective of the borrower , the mortgage is considered a long-term liability.

Tax 40

Tax Accounting Accounting 40

Accounting Tools

SEPTEMBER 25, 2023

Related Courses Corporate Cash Management Corporate Finance Treasurer's Guidebook What is Convertible Debt? Convertible debt is a corporate bond that is convertible into the common stock of the issuer. Related Articles Credit Facility Debt Security Income Bond Line of Credit Self-Liquidating Loan Short Term Sources of Funds

Corporate Finance 40

Corporate Finance 40

Accounting Tools

OCTOBER 12, 2023

Related Courses Corporate Cash Management Corporate Finance Treasurer's Guidebook What is a Secured Loan? A secured loan is a lending agreement in which the borrower pledges an asset as collateral , which the lender can seize if the borrower cannot pay back the underlying loan.

Corporate Finance 40

Corporate Finance 40

Accounting Tools

AUGUST 31, 2023

Debenture capital is a loan that an organization secures with its assets. This situation is most common for smaller organizations that cannot convince lenders to issue them debt without some form of collateral. Related Articles Asset Financing Short Term Sources of Funds What is Debenture Capital?

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Accounting Tools

JUNE 21, 2023

Related Courses Accounting for Investments GAAP Guidebook What are Available for Sale Securities? An available for sale security is a debt or equity instrument that is not classified as one of the following: Trading securities. Held-to-maturity securities. The classification is made when a security is purchased.

Accounting 45

Accounting Accounting 45

Accounting Tools

OCTOBER 14, 2023

Related Courses Corporate Cash Management Corporate Finance Treasurer's Guidebook What is a Secured Bond? A secured bond is a debt instrument that is backed by collateral. Because of the presence of collateral, investors are usually willing to accept a lower effective interest rate when they buy secured bonds.

Corporate Finance 40

Corporate Finance 40

Accounting Tools

JANUARY 20, 2024

What are Dilutive Securities? Dilutive securities are any financial instruments that can potentially increase the number of shares outstanding. The concept is of importance when calculating fully diluted earnings per share, where the effect of these securities can reduce earnings per share. They are as follows: Options.

Accounting 40

Accounting Accounting 40

oAppsNet

MAY 9, 2024

This article aims to demystify the accounts receivable process, elucidating its significance, operational mechanisms, challenges, and optimization strategies. Businesses must approach delinquent accounts tactfully and professionally to preserve goodwill while securing payment.

Accounts Receivable 40

Accounts Receivable Accounts Receivable Account Receivables Accounting 40

Accounting Tools

AUGUST 8, 2023

The following are examples of balance sheet accounts: Asset Accounts Cash Marketable securities Accounts receivable Inventory Fixed assets Other assets Liability Accounts Accounts payable Accrued expenses Taxes payable Pension payable Short-term debt Long-term debt Other liabilities Equity Accounts Common stock Preferred stock Additional paid-in capital (..)

Accounting 40

Accounting Accounting Accounts Payable Accounts Payable 40

Accounting Tools

JULY 27, 2023

Related Courses Corporate Finance Treasurer's Guidebook What is a Security Interest? A security interest is a lien on an asset that has been pledged as collateral on a loan by a borrower. The lender can use this security interest to claim the asset if the borrower defaults on a loan agreement, thereby paying off the loan.

Corporate Finance 40

Corporate Finance 40

Accounting Tools

JUNE 14, 2023

A financial interest is an ownership stake in an equity security or debt security issued by an entity, including the rights and obligations to acquire such an interest. Related Articles Accountant’s Liability Direct Financial Interest Due Professional Care

Auditing 40

Auditing 40

Accounting Tools

DECEMBER 10, 2023

Financial assets include cash and marketable securities , while financial liabilities usually refer to debt and leases. ABC also has $150,000 of cash and marketable securities, which we subtract from the net assets figure, and $350,000 of debt, which we add back. The result is $3,200,000 of net operating assets.

Financial Statements 40

Financial Statements Accounts Payable Accounts Payable Accounts Receivable 40

Accounting Tools

JULY 16, 2023

A mortgage bond is a debt offering that is secured by the issuing entity's real estate or equipment. This extra level of security for the bond investor usually leads to a lower effective interest rate on the bond. This extra level of security for the bond investor usually leads to a lower effective interest rate on the bond.

Corporate Finance 40

Corporate Finance 40

Accounting Tools

MARCH 2, 2024

A well-managed company that occupies a secure market niche should be able to maintain a strongly positive equity spread. Shift to a higher proportion of debt funding, so that the equity base of the business is reduced.

Financial Analysis 40

Financial Analysis Financial Statements Accounts Receivable Accounts Receivable 40

Accounting Tools

AUGUST 29, 2023

Collateral is an asset or group of assets that a borrower or guarantor has pledged as security for a loan. Because of the extra security provided to the lender by having collateral, the amount borrowed may be higher and/or the associated interest rate may be reduced. Related Articles Collateral Trust Bond

Corporate Finance 40

Corporate Finance 40

Accounting Tools

MARCH 8, 2024

This information is typically used by creditors , lenders , and investors to judge the performance of a business, as well as its ability to repay debts. If a company is publicly-held , its external financial reports are periodically submitted to the Securities and Exchange Commission. What are External Financial Reports?

Financial Reporting 40

Financial Reporting Financial Statements Auditing Accounting 40

Accounting Tools

NOVEMBER 1, 2023

A stock option gives its owner the right, but not the obligation, to purchase a security at a specific price over a predefined period of time. It issues a $5,000,000 convertible debt instrument that can be converted to the company’s common stock in two years at a conversion price of $12 (which is also the current fair value of the stock).

Accounting 40

Accounting Accounting 40

Accounting Tools

OCTOBER 7, 2023

The members of this group are comprised of both secured creditors and unsecured creditors , where secured creditors have the most power, followed by those unsecured creditors with the largest unpaid balances. Related Articles First Day Motions Reorganization Statement of Affairs Workout Arrangement

Collections 40

Collections Tax Accounting Accounting 40