An accumulated fund is a fund that is created from the accumulated profits of a company. This fund is used to finance the company’s activities and pay for its expenses. The accumulated fund is also used to pay dividends to shareholders. What are three types of funds? There are three types of funds available to … Read more
An attorney’s letter is a written statement from a lawyer that confirms the legal status of a transaction or arrangement. The letter may also provide other information about the legalities of the matter in question. Attorney’s letters are often used in corporate finance transactions, such as mergers and acquisitions, to help all parties understand the … Read more
A cash flow loan is a type of loan that is specifically designed to help businesses with their cash flow. This type of loan is typically used to help businesses cover expenses that are due before they have the funds available to do so. Cash flow loans can be used for a variety of expenses, … Read more
The audit department is responsible for ensuring that the financial statements of an organization are accurate and in compliance with generally accepted accounting principles (GAAP). The audit department also provides an independent assessment of the organization’s financial statements and internal controls. What is the role of audit? The role of audit is to provide an … Read more
What is assurance? Assurance is a type of financial guarantee that is typically provided by an independent third party in order to protect the interests of another party. For example, a company may provide an assurance to its shareholders that its financial statements are accurate and free from material misstatement. What are the different types … Read more
The DuPont Identity is a financial ratio that is used to measure a company’s profitability and is also known as the “DuPont Analysis”. This ratio is calculated by dividing a company’s net income by its equity capital. The DuPont Identity is a useful tool for investors to use when analyzing a company’s financial statements. What … Read more
The borrowing base is the amount of a company’s eligible accounts receivable and inventory that can be used as collateral for a loan. The borrowing base is determined by the lender and is based on a percentage of the value of the receivables and inventory. The borrowing base is used to determine the maximum amount … Read more
The administrative budget definition is the process of allocating resources to cover the costs of running a business. This includes the costs of staff, premises, equipment, and other overheads. The budget is typically prepared annually, but may be prepared more frequently if required. What is administrative overhead budget? The administrative overhead budget is a budget … Read more
The Big Bath is a term used to describe a situation where a company takes a large one-time charge to earnings in order to “clean up” its financial statements. This charge is usually taken in order to write off bad investments or to adjust for changes in accounting rules. The Big Bath is often used … Read more
A reinvoicing center is a type of financial institution that provides financing to companies by purchasing their accounts receivable and then selling them to investors. The center typically charges a fee for its services and may also require the company to post collateral. Reinvoicing centers can be used by companies to improve their cash flow … Read more
