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Accounting Corporate Finance Definition 
Accounting Tools
JANUARY 26, 2025
Related AccountingTools Courses Corporate Finance Treasurers Guidebook Related Articles Preemptive Right Stock Subscription Accounting Subscribed Stock This situation arises when a lender demands that a business obtain more equity before it will consent to the issuance of any additional debt.
Accounting Tools
JULY 16, 2023
Related Courses Corporate Finance Investor Relations Guidebook Public Company Accounting and Finance What is a Beneficial Owner? A beneficial owner is an entity that owns stock or other property that is registered in the name of another party. The beneficial owner enjoys the income from the owned asset.
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Accounting Tools
JULY 14, 2024
In some cases, this may be a negative figure, since the market value of company assets may be lower than the aggregate amount of liabilities.
Maximizing Profit and Productivity: The New Era of AI-Powered Accounting
Book of Secrets on the Month-End Close
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Accounting Tools
APRIL 21, 2023
Related Courses Corporate Finance Treasurer's Guidebook What is an Interim Dividend? An interim dividend is a distribution to shareholders that has been both declared and paid before a company has determined its full-year earnings.
Accounting Tools
JANUARY 22, 2024
The amount of common stock that a business records is split between the common stock account and the additional paid-in capital account; the sum total recorded matches the price at which the company sold shares to its investors.
Accounting Tools
MAY 2, 2024
Related AccountingTools Courses Corporate Cash Management Corporate Finance Treasurer's Guidebook Related Articles Demand Loan Evergreen Loan Secured Loan Term Loan Working Capital Loan
Accounting Tools
MARCH 24, 2023
Related Courses Corporate Cash Management Corporate Finance Treasurer's Guidebook What is an Original Issue Discount? An original issue discount is the difference between the face value of a bond and the price at which it was originally sold to an investor by the issuer.
Accounting Tools
APRIL 4, 2023
Related Courses Corporate Finance Treasurer's Guidebook What is Invoice Discounting? Invoice discounting is the practice of using a company's unpaid accounts receivable as collateral for a loan , which is issued by a finance company.
75 
Accounting Tools
APRIL 18, 2023
Related Courses Corporate Finance Essentials of Business Math Financial Analysis What is the Rule of 69? The Rule of 69 is used to estimate the amount of time it will take for an investment to double, assuming continuously compounded interest. The calculation is to divide 69 by the rate of return for an investment and then add 0.35
Accounting Tools
JULY 14, 2024
Related AccountingTools Courses Corporate Finance Treasurer's Guidebook Smith initially pays $5 per share, since he is short on cash at the moment. The agreement states that he will pay off the remainder of the amount owed as soon as he liquidates another investment.
Accounting Tools
JULY 10, 2023
Related Courses CFO Guidebook Corporate Finance Treasurer's Guidebook What are Dividends? Related Articles Accounting for a Small Stock Dividend Are Dividends Considered an Expense? How to Account for Cash Dividends How to Calculate Dividends Paid Stock Dividend Accounting Does a Dividend Reduce Profit?
Accounting Tools
AUGUST 9, 2024
Related AccountingTools Courses Business Combinations and Consolidations Corporate Cash Management Corporate Finance When an intercompany loan is created, it should be fully documented, including the amount of the interest rate to be charged and principal repayment terms.
Accounting Tools
NOVEMBER 5, 2023
Related Courses Corporate Cash Management Corporate Finance Treasurer's Guidebook What is Loan Stock? Loan stock is shares in a business that have been pledged as collateral for a loan.
Accounting Tools
JULY 28, 2023
Related Courses Corporate Finance The Balance Sheet What is No Par Value Stock? Accounting for No Par Value Stock When a company sells no par value stock to investors, it debits cash received and credits the common stock account. Historically, par value used to be the price at which a company initially sold its shares.
Accounting Tools
JULY 16, 2024
years) Related AccountingTools Courses Corporate Finance Essentials of Business Math Financial Analysis The Rule of 72 is fairly accurate for low rates of return, and becomes increasingly inaccurate when higher rates of return are incorporated into the calculation. 72 ÷ 1 = 72.0 years) 2% interest rate. (72 72 ÷ 2 = 36.0 72 ÷ 3 = 24.0
Accounting Tools
JUNE 12, 2023
Related Courses Capital Budgeting Corporate Finance Treasurer's Guidebook What is the Simple Rate of Return? Terms Similar to Simple Rate of Return The simple rate of return is also known as the unadjusted rate of return and the accounting rate of return.
Accounting Tools
JUNE 7, 2023
Related Courses Corporate Finance The Interpretation of Financial Statements Treasurer's Guidebook What is Financial Leverage? Financial leverage is the use of debt to buy more assets. Leverage is employed to increase the return on equity.
Accounting Tools
NOVEMBER 2, 2023
Related Courses Capital Budgeting Corporate Finance Financial Analysis What is the Opportunity Cost of Capital? The opportunity cost of capital is the incremental return on investment that a business foregoes when it elects to use funds for an internal project, rather than investing cash in a marketable security.
Accounting Tools
SEPTEMBER 26, 2023
Related Courses Corporate Finance Investor Relations Guidebook Public Company Accounting and Finance What is the Payout Ratio? The payout ratio is the proportion of dividends that a company pays to investors in relation to its reported net income. It is expressed as a percentage of the firm’s reported earnings.
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Accounting Tools
APRIL 3, 2023
Related Courses Corporate Cash Management Corporate Finance Treasurer's Guidebook What is Private Equity? Private equity is an investment in a business that is not listed on a stock exchange. The private equity business has the potential to be extraordinarily profitable, and so attracts some of the best business talent.
Accounting Tools
JUNE 11, 2023
Related Courses Corporate Finance Working Capital Management What is Accounts Receivable Discounted? Accounts receivable discounted are unpaid billings to customers that have been sold to a third party in exchange for cash.
Accounting Tools
MARCH 19, 2024
Capital stock is comprised of all types of shares issued by a corporation. An alternative definition of capital stock is that it is comprised of the total number of common shares and preferred shares that are authorized for issuance. What is Capital Stock?
Accounting Tools
MARCH 30, 2023
Related Courses Corporate Cash Management Corporate Finance Treasurer's Guidebook What is a Bill of Exchange? A bill of exchange is a binding agreement by one party to pay a fixed amount of cash to another party as of a predetermined date or on demand. Bills of exchange are primarily used in international trade.
75 Accounting Tools
SEPTEMBER 2, 2023
Related Courses Corporate Cash Management Corporate Finance Treasurer's Guidebook What is a Private Placement? A private placement is the sale of a security to a small number of investors.
Accounting Tools
JUNE 3, 2024
Proration in Overhead Cost Allocations Proration can refer to the allocation of under- or over-allocated overhead costs among the work-in-process , finished goods , and cost of goods sold accounts at the end of an accounting period. Related AccountingTools Courses Cost Accounting Fundamentals Corporate Finance
Accounting Tools
MAY 15, 2023
Related Courses Corporate Cash Management Corporate Finance Treasurer's Guidebook What is Accounts Receivable Pledging? Accounts receivable pledging occurs when a business uses its accounts receivable asset as collateral on a loan , usually a line of credit.
Accounting Tools
JULY 11, 2024
The company would most definitely be considered highly geared. How to Calculate Financial Gearing The calculation used for financial gearing is to add together all forms of debt and then divide by the total amount of equity. The company currently has $2,000,000 of equity, so there is now a 5x ratio of debt to equity.
Accounting Tools
MAY 15, 2024
Offering costs are those expenditures made to pay for the accounting, legal and underwriting activities associated with the issuance of securities to investors. Related AccountingTools Courses Corporate Finance Public Company Accounting and Finance Related Articles Commitment Fee Finance Charge Floatation Cost Original Issue Discount
Accounting Tools
OCTOBER 13, 2023
Related Courses Corporate Finance Public Company Accounting and Finance A secondary distribution is the sale of a large number of shares by one or more large investors. The sale is handled by a securities firm and so is not conducted through a stock exchange.
Accounting Tools
APRIL 29, 2024
This is a simplified calculation used to approximate the return on an investment, without accounting for the compounding effect of these returns over time. This measure also does not account for any realized or unrealized gains or losses on these investments.
Accounting Tools
AUGUST 31, 2023
Related Courses Accounting for Earnings per Share Corporate Finance What is Dilutive? Dilutive is the effect of a transaction that reduces earnings per share or the ownership interest of an investor. This concept occurs when a business issues shares , convertible debt , options , or warrants.
Accounting Tools
MAY 2, 2024
Related AccountingTools Courses Corporate Finance Public Company Accounting and Finance Related Article Underwriting Fees There are more experts scattered among the various underwriters in the group, making it easier to handle the more specialized securities issuances.
Accounting Tools
AUGUST 24, 2023
Related Courses Accounting for Derivatives and Hedges Corporate Finance Enterprise Risk Management What is a Hedging Instrument? Related Articles Hedge Accounting
Accounting Tools
OCTOBER 22, 2024
The total finance charge includes the interest on the debt, the commitment fees by the lender, any account maintenance fees, and late fees. The amount of finance charges is closely related to the creditworthiness of the borrower. The charge compensates the lender for providing funds to a borrower.
Accounting Tools
OCTOBER 4, 2023
Related Courses Corporate Finance Treasurer's Guidebook What is Principal? Principal is the amount of a debt that was originally borrowed, and which remains unpaid. This amount does not include any accumulated unpaid interest associated with the debt.
Accounting Tools
JANUARY 24, 2024
Accounting for a Discount on Notes Receivable To account for the difference between the present value of the payments to be received from a note and its face amount, amortize it over the remaining life of the note. Related AccountingTools Courses Corporate Finance GAAP Guidebook
Accounting Tools
SEPTEMBER 20, 2023
Related Courses Accounting for Bonds Accounting for Investments Corporate Finance What is a Call Feature? A call feature is a feature in a bond agreement that allows the issuer to buy back bonds at a set price within certain future time frames.
Accounting Tools
MAY 11, 2023
Related Courses Accounting for Investments Corporate Finance GAAP Guidebook What is an Unamortized Bond Premium? The unamortized bond premium account contains the remaining amount of bond premium that the bond issuer has not yet charged off to interest expense over the life of the bond.
Accounting Tools
APRIL 28, 2024
Related AccountingTools Courses Accounting for Bonds Corporate Finance Treasurer’s Guidebook Related Articles Bond Retirement Maturity Date Retirement of Bonds This occurs because available cash is constantly being funneled into the sinking fund, rather than being deployed to earn a return.
Accounting Tools
MAY 10, 2024
Related AccountingTools Courses Accounting for Bonds Corporate Finance The Income Statement Related Articles Accounting for Bonds Contractual Interest Rate Effective Interest Method These two figures are added together to arrive at a total bond interest expense of $80,000 for the reporting year.
Accounting Tools
FEBRUARY 7, 2024
Accounting for Hedges Hedge accounting involves matching a derivative instrument to a hedged item, and then recognizing gains and losses from both items in the same period. The net result of these gains and losses should be relatively small, as long as the hedging instrument was properly paired with the hedged item.
Accounting Tools
JANUARY 20, 2024
Accounting for Declared Dividends The authorization of a dividend payment creates a payment liability for the issuing entity, for which it records a short-term liability in the accounting records. The entry is a debit to the retained earnings account and a credit to the dividends payable account.
Accounting Tools
SEPTEMBER 21, 2023
Related Courses Corporate Finance Treasurer's Guidebook What is a Property Dividend? Accounting for Property Dividends The issuer records property dividends at the fair market value of the assets paid to shareholders. A property dividend is a dividend paid to investors with assets other than cash.
Accounting Tools
OCTOBER 13, 2023
Related Courses Corporate Finance Treasurer's Guidebook What is Senior Debt? Example of Senior Debt A company has multiple levels of debt, of which its line of credit with Fourth Bank is the most senior debt; it is secured by the company’s accounts receivable and inventory.
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