Why is profit shown on liabilities side?

Q: What is the relationship between total liabilities and total assets? What is it called?

A: Assets:   An asset is any form of resource both tangible and intangible owned by an organization for…

Q: The ability to meet short-term obligations is termed: A) Profitability B) Solvency C) Efficiency D)…

A: Introduction: Short term period: Short term period means less than one year period.

Q: What are the advantages of balance sheet?

A: Financial Statement:   A financial statement is the complete record of financial transactions that…

Q: n what way do assets differ from liabilities?

A: Solution: Asset is a resource owned by the business having some economic value with expectation of…

Q: How did you decide whether the situation is a profit or a loss?

A: A profit and loss (P&L) statement is a financial statement that details the revenues,…

Q: What is the relationship between total liabilities and total assets?

A: Ratio analysis: The analysis of a company using the financial ratios and comparing its trends and…

Q: What are accrued liabilities?

A: Accrued liabilities are the outstanding expenses which are due or incurred but not yet paid in cash.…

Q: r to pay un

A: Horizontal analysis :  Financial analysts use horizontal analysis, also known as trend analysis or…

Q: What are the consideration that need for dividend pay out policy?

A: The dividend is referred to as the share of profits, which used to be distributed to the company's…

Q: How do you show profit and loss on a balance sheet?

A: Balance Sheet is the part of financial statement which shows the financial position of the company…

Q: What are the Return on Total Assets?

A: Return on total assets: Return on total assets (ROTA) is a ratio that calculates a corporation's…

Q: What is the difference of Cost of Equity and the required rate of return on equities?

A: The amount of money that would be transferred to a company's shareholders if all of the company's…

Q: How is liquidity risk associated with the asset side of the balance sheet?

A: Liquidity risk in an asset will motivate the investor/buyer to pay a lower price for acquiring it.

Q: Explain profit-and-loss statement?

A: For financial reporting, there are three major financial statements which a business entity is…

Q: What is liabilities?

A: Liabilities: The claims creditors have over assets or resources of a company are referred to as…

Q: difference between internal rate of return and net present value?

A: Difference between internal rate of return and net present value?

Q: Capitalizing a cost involves increasing what type of account?a. Liabilityb. Expensec. Stockholders’…

A: An asset is something which contains future economic value or future benefit.  A liability is…

Q: What is the quantitative disclosure of lessor?

A: Definition: Lease: Lease is a contractual agreement whereby the right to use an asset for a…

Q: Why do net income and net cash flow differ?

A: Net income vs Net cash flow:

Q: what are the differences between profit and cash?

A: Profit and cash are two quite related but two different things.

Q: Which types of investments are valued at amortized cost? Explain the rationale for this accounting.

A:

Q: When is Profit and Loss Account made? Why?

A: Profit and loss account: profit and loss account also called an income statement. Every business…

Q: Is Capital debit or credit?

A: As per Business Entity concept Business is treated as an entity which is different from Proprietor.…

Q: How do you treat net loss on a balance sheet?

A: Balance sheet: It refers to a financial statement that shows all the liabilities, assets, and…

Q: What is accural vs cash basis accounting. Explain with examples?

A: Cash Accounting: A form of accounting in which receipts are reported during the period in which they…

Q: What is financial asset market?

A: Financial assets generally include bonds, stocks, mutual funds, cash, deposits with bank etc. These…

Q: fair value gain? And what effect it has on Balance sheet?

A: The balance sheet includes the assets, liabilities, and stockholders' equity of the company.

Q: What is the difference between a cash basis and an accrual basis measure of performance?

A: Cash Basis :- It is an Accounting Method where Revenue and Expense are identify at the time of…

Q: How does a company determine the interest rate it uses in making a netpresent value (NPV) decision?

A: The net worth of the project after the deduction of the current worth of the cash outflows from the…

Q: asset turnover ratio?

A: Asset turnover ratio = Sales/((Total assets at the beginning of the year + Total assets at the end…

Q: How much arbitrage profit

A: Arbitrage is making profit by purchasing a currency in one market and selling the same in the other…

Q: Discuss, using practical why capital ratio is used to share a loss on realization

A: The ratio is used because the partners having more capital is liable for more loss and the partner…

Q: What is Pro forma (or projected) profit-and-loss statement?

A: Pro Forma financial  Statement (also called as pro forma profit and loss) means that however the…

Q: What is the difference between liabilities and assets?

A: The balance sheet represents the financial position of the business with assets and liabilities at…

Q: profits and losses equally

A: Correct Answer :- B Peter  P170,000. And  john P90000

Q: What is the amount of tmes-Interest earned?

A: Times Interest Earned: Times interest earned is a ratio which states with how many times the…

Q: what the meaning of current assets ratio?

A: Assets are the rights and resources being held by the business. Assets that are either in cash or…

Q: Describe the accrual accounting rate-of-return method. What are its main strengths and weaknesses?

A:

Q: What is Interest Risk and Cash Flow Risk?

A: Risk exists in all business operations and transactions however the business should take actions to…

Q: How is accrued interest calculated?

A: Accrued interest is the amount of interest that has been due but not received by the lender or…

Q: What is the relationship between current assets and currentliabilities?

A: Current assets: The assets which could be converted into cash within one year like accounts…

Q: what is equity valuation?

A: The phrase "equity valuation" refers to all tools and procedures used by investors to determine the…

Q: Where do current assets and current liabilities come from?

A: Current Assets = Cash + Supplies + Prepaid Insurance Current Liabilities = Creditors + Salary…

Risk and return

Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary. 

Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.