What is Debt=Equity Ratio?
March 4, 2012
No Comments
Debt-Equity Ratio Ratio: Total Debt / Total Equity = % The higher the debt-equity ratio, the higher the risk of the business Ratio rises/falls if
Tag: business
What is the difference between a Debt and Liability?
March 4, 2012
No Comments
Debt versus Liability A provider lends an amount to the business & there is obligation to repay the debt Liability – ALL obligations, something owed
What is the relationship between Debt & Profit/Loss?
March 4, 2012
No Comments
The business has an obligation to repay the debt (principal & interest) Repaying interest on the debt applies whether the business makes a profit or
What is Debt?
March 4, 2012
No Comments
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
What are Drawings?
March 4, 2012
No Comments
Drawings The owner can draw / withdraw / take out cash and assets from the business The bank (cash) balance or the asset (e.g. vehicle)
What is Sweat Equity?
March 4, 2012
No Comments
Sweat Equity, is where the entrepreneur Contributes time & effort, your “sweat” Contributes knowledge, skills & connections
What is Owner’s Equity?
March 4, 2012
No Comments
Owner’s Equity Owner’s Equity = Capital Contribution + Changes below Owner’s Equity Computation Capital contribution by the owner + Net Profit – Net Loss –
What is Equity?
January 25, 2011
No Comments
Equity means Ownership in the business Interest or Claim to the Assets in the business