Category: Wealth

What is Debt?

Debt A provider (e.g bank) lends an amount to the business The business has an obligation to repay the amount borrowed (debt) Amount borrowed is called the principal amount.

Read More »

What are Drawings?

Drawings The owner can draw / withdraw / take out cash and assets from the business The bank (cash) balance or the asset (e.g. vehicle) is reduced by drawings Owner’s Equity is reduced by drawings

Read More »

What is Sweat Equity?

Sweat Equity, is where the entrepreneur  Contributes time & effort, your “sweat” Contributes knowledge, skills & connections

Read More »

What is Owner’s Equity?

Owner’s Equity Owner’s Equity = Capital Contribution + Changes below Owner’s Equity Computation Capital contribution by the owner + Net Profit – Net Loss – Owner Drawings = Owner’s Equity

Read More »
Scroll to Top
Skip to content