What is interest expense? Interest is the cost a business incurs for borrowing funds from external parties. Interest is the non-operating expenses, which means interest is not directly related to

What are T-accounts?  T-accounts, called ledger accounts, are a conventional way of recording financial statements in double-entry bookkeeping. T-account looks like a big T dividing the space into two columns.

What is Capital Expenditure (Capex)? Capital expenditures (Capex) refer to the funds a company uses to acquire physical or tangible assets. Companies engage in Capex for two primary reasons: firstly,

Introduction  Leverage ratios are a set of financial relationships which indicate a business’s debt level against its assets and operations. Analysts have numerous leverage ratios to understand the degree of

Introduction Investors and analysts are interested in understanding the financial health and profitability of a company. They use a financial metric called Return On Equity (ROE) to measure how effectively

Introduction  A business is involved in numerous activities, like production and business operations. In the previous articles, we have understood COGS as the funds used to sustain the production of

Introduction  In taxation, we hear numerous terms like statutory tax rate, effective tax rate, tax liability, marginal tax, etc but we fail to understand the intricacies of these terms. Effective

Introduction Operating expenses form the backbone of every business, encompassing essential costs incurred to sustain daily operations. Understanding operating expenses is paramount for investors and analysts, offering valuable insights into

Introduction In the dynamic landscape of financial management, Days Payable Outstanding (DPO) emerges as a crucial indicator of a company’s financial stability and operational efficiency. DPO measures the average number

Introduction In the day-to-day operations of a business, transactions occur frequently, ranging from cash exchanges to credit agreements. While cash transactions ensure immediate liquidity, credit transactions can tie up funds,