Fund balance
equites
Solvency ad profitability are financial terms. In basic terms solvency is how solvent you are. If you have more assets than liabilities then you are generally termed to be solvent however if it is the other way around you are generally termed to be insolvent, however you may have sufficient income to fund your liabilities so it is only a theoretical insolvency. Profitability is the excess of you income over your expenditure.
Current Ratio is when you take your current assets divided by your current liabilities. This is one of the best known and most widely used ratios. Because current assets and liabilities are, in principle, converted to cash over the following 12 months, the current ratio is a measure of short-term liquidity. The unit of measurement is either dollars or times. For example, you could say ABC Corp has $1.50 in current assets for every $1 in current liabilities, or you could say that ABC Corp has its current liabilities covered 1.5 times over. To a creditor, the higher the ratio the better. To the firm, a high current ratio indicates liquidity, but it also may indicate and inefficient use of cash and other short-term assets. Absent some extraordinary circumstances, we would expect to see a current ratio of at least 1, because a ratio of less than 1 would imply a negative working capital number, which which over time could mean insolvency. Generally, a number closer to the 2 range would be most desirable for most industries.
Make a list of your assets: Make a list of all your assets, which should include cash, investments, real estate, automobiles, valuables, and anything else that has a lot of value. Evaluate your assets' worth: Give each asset its fair market value. Take into account the current balances of investments and cash. Take into account the market value of both automobiles and real estate. Professional evaluations may be required for valuables. Determine your obligations: Make a list of all your debts and obligations, including credit card balances, mortgages, loans, and unpaid bills. Determine the liabilities' total value: Take all of your outstanding debts and obligations and add them up. Determine your net worth by: Divide the total value of the assets by the total value of the liabilities. The subsequent figure is your total assets, addressing your monetary standing and the worth of your resources in the wake of representing obligations.
Depreciation
hat is a Fund? Fund Meaning Money that is set aside for a particular purpose. To provide money for paying off the interest or principal of (a debt). To finance, using long-term debt or Capital. Synonyms Finance Support Back Furnish Fund = Capital We use the phrase "We need additional funds" to mean we need additional capital whether be it for acquiring assets, clearing liabilities or for meeting expenses. This indicates that Fund means Capital. All capital of the organisation whether owned or loaned is capable of being called Fund. Fund is Capital freely available for use A Fund by its nature would be capital kept aside with a purpose. The fund should be capable of being used for the specified purpose at any time. Fund, in the topic Funds Flow Analysis, is a general purpose fund. It represents capital resource that would be available to the organisation for general purposes. It would be capable of being used in any manner the organisation prefers without any restriction/hindrance. Fund is Capital supported by Current Assets Every rupee of a liability/capital is supported by a rupee of an asset. Every rupee of an asset is financed by a rupee of a liability. Consider a new business that has been started with a capital of Rs. 2,00,000 brought in cash. The organisation's Balance Sheet immediately after this first transaction would be: Balance Sheet of M/s ___ as on 31st December __ Liabilities Amount Assets Amount Capital 2,00,000 Cash 2,00,000 2,00,000 2,00,000 Liabilities supported by Assets : Capital is supported by cash Assets financed by Liabilities : Cash is financed by Capital The next day, Furniture worth Rs. 1,00,000 and Stock Worth Rs. 50,000 have been bought for cash. The Balance Sheet after these transaction would be : Balance Sheet of M/s ___ as on 31st December __ Liabilities Amount Assets Amount Capital 2,00,000 Cash Furniture Stock 50,000 1,00,000 50,000 2,00,000 2,00,000 Liabilities supported by Assets : Capital is supported by Cash, Furniture and Stock Assets financed by Liabilities : Cash, Furniture and Stock are financed by Capital Capital/Cash is employed in purchasing Assets Since Cash used in purchasing Furniture was financed by Capital, we can say that Furniture is financed by Capital. Whereby, we say that capital is employed in purchasing furniture. On converting an asset into a new one, the liability that was being supported by the replaced asset would now be supported by the new asset. Therefore, on employing capital, the assets supporting capital change. Capital that can be employed To be able to employ capital for any purpose, the asset that is supporting it should be easily convertible. Fund is Capital supported by easily convertible Assets Fund is capital freely available for being used in any which way the organisation intends i.e. for long term or short term needs. To enable such usage, funds (capital that we call funds) should be supported not just by assets which are convertible but by assets that are easily convertible. Current Assets are easily convertible Current Meaning Belonging to the present time. Not overdue; occurring this period. Synonyms Present Existing Recent In Progress Current Assets are assets that are capable of being liquidated in a time span of a year or less. They represent easily convertible assets. Fund is capital supported by easily convertible assets + Current Assets are easily convertible assets. ? Fund is capital supported by Current Assets Funds exclude Current Liabilities Current Liabilities Current liabilities are liabilities that are to be repaid/cleared within the near future (a short period of time). Current liabilities are considered to be supported by current assets as they are similar in nature i.e. both of them have a short life span (a year or less). Current liabilities have a charge on current assets. Fund is capital that is freely available for use for any purpose the organisation intends without any hindrance/restriction. All the capital that is supported by current assets cannot be said to be freely available for use without any hindrance. We do not consider Current liabilities to be representing capital that is freely available for use, since they are to be repaid within a short time span Therefore, capital supported by current assets excluding current liabilities would only be considered as fund. Fund = Current Assets - Current Liabilities Fund is freely available capital + Fund is capital supported by Current Assets + Fund is capital supported by current assets excluding current liabilities [Current assets in excess of those supporting current liabilities support funds.] ? Funds = Current Assets - Current Liabilities Fund = Working Capital Excess of Current Assets over Current Liabilities is Working Capital ? Working Capital = Current Assets - Current Liabilities. ? Fund = Working Capital What is Funds Flow? Flow Meaning To move or run smoothly with unbroken continuity like in the case of a fluid. Something that resembles a flowing stream in moving continuously Synonyms Stream Gush Course Funds Flow Fund being working capital, Funds flow indicates the flow of working capital between two points of time. It involves information relating to the various transformations undergone by working capital (i.e. the changes that have taken place in working capital) during the period involved between the two points of time. Every change in working capital is associated with (or is on account of) a flow either an inflow or an outflow. Thus, funds flow involves information relating to the inflows and outflows that resulted in a change in working capital between the two points of time. When do we say that there is a flow of fund? Fund (Working Capital) in an Organisation is like water in a reservoir. The Fund is analogous to water and the reservoir to the organisation. There is a change whenever there is a flow There would be a change in fund (working capital) whenever there is a flow (in/out) of fund. An inflow would result in an increase and An outflow would result in a decrease. There is a flow whenever there is a change A change in fund (working capital) in the organisation is an indication of flow of fund. An increase would indicate an inflow and A decrease would indicate an outflow. Hidden/Masked flows When there is an inflow followed by an outflow of the same magnitude, there may not be a change in fund (working capital). An inflow would result in an increase in fund which would be set off by an outflow resulting in a decrease. Since the magnitude is the same, after the two transactions, the fund seems to be unchanged. In such situations, to notice the change, we will have to break down the transactions into two instead of viewing them in total.
What is excess of total liability over a total assets?
Fund balance
true per my accounting book these wiki answers have helped me pass my tests!!
The answer is Deficit. Anything where there is a loss is a deficit
Sales are neither assets nor liabilities. Sales is the operating revenue recognized for a company over a period of time. However, the resulting cash and receivables from Sales are assets.
Assets increase over liabilities
Management of short term assets (current assets) and short term liabilities (current liabilities) is commonly known as working capital management.Working capital is a requirement of funds to meet the day to day working expenses. In a simple term working capital is an excess of current assets over the current liabilities. In working capital management we focus more on receivables management, cash management and inventory management etc. Proper way of management of working capital is highly essential to ensure a dynamic stability of the financial position of an organization.
There is not a ratio that has the value of one. A ratio is assets over liabilities.
Depends on the error. Either assets will be over/understated and liabilities/stockholders' equity will be over/understated.
Solvency ad profitability are financial terms. In basic terms solvency is how solvent you are. If you have more assets than liabilities then you are generally termed to be solvent however if it is the other way around you are generally termed to be insolvent, however you may have sufficient income to fund your liabilities so it is only a theoretical insolvency. Profitability is the excess of you income over your expenditure.
working capital is the excess of current assets over current liabilities. if current assets are more than current liabilities, the company has surplus working capital, which is a good sign of liquidity. working capital is calculated as follows:Working capital = Current assets - Current liabilities
An "asset" is a resource controlled by the business from which an inflow of future economic benefits are expected. (These are sources from which you make money.) A liability is a present obligation from which an outflow of future economic benefits is expected. (You have to pay out for these.) Having more total liabilities than total assets is referred to as being "insolvent", while having more current liabilities than current assets is referred to as being "illiquid". Therefore, if you do not have the money-making capabilities to pay back money that you owe, you can not operate as a business. When your liabilities exceed your assets over a long period of time, this is an indicator that you are losing money in your business.