Category Archives for Finance

Solvency Ratio Formula

Solvency Ratios, also known as leverage ratios, are one of many ratios that can help you to assess the financial health of a business. Solvency ratios measure a company’s ability to meet its long-term financial obligations. They do this by comparing a company’s level of debt against earnings, assets, and equity. Solvency ratios are commonly […]

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Good Debt vs Bad Debt in Business

Most of us (hopefully) have a dislike of debt, but not all debt is created equal. Some debt can actually be good for your business and accelerate its rate of growth. So let’s very quickly define the difference between good debt and bad debt in business. Unlike in our personal lives, not everyone in business […]

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Bookkeeping Before Computers

Before the advent of the computer, bookkeeping was done by actual bookkeepers. The bookkeeper would record every financial transaction the company made in a journal. The transaction didn’t just need to be entered into the journal but also copied to other ledgers, for example, the company’s general ledger. I can’t imagine the time before handy […]

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Long-Term vs. Short-Term Debt

Whilst you may have a vague idea about the differences between long-term and short-term debt, in accounting terms there are some very clear differences between the two. There are also a number of factors to take into account when considering taking on one form of debt or the other. In accounting terms, short-term debt is […]

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