article thumbnail

Capital stock definition

Accounting Tools

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?

article thumbnail

Financial gearing definition

Accounting Tools

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.

professionals

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

article thumbnail

Maturity value definition

Accounting Tools

Related AccountingTools Course Corporate Finance The maturity value increases when the interest on the investment compounds at a rapid rate (such as monthly or quarterly), since interest is being calculated on a continually growing base. Fees and taxes.

article thumbnail

Finance charge definition

Accounting Tools

Related AccountingTools Courses Corporate Cash Management Corporate Finance Treasurer's Guidebook Related Articles How to Calculate Interest Expense How to Calculate the Effective Interest Rate This is done in order to minimize the cases in which borrowers are charged excessive rates for loaned funds.

article thumbnail

Intercompany loan definition

Accounting Tools

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.

article thumbnail

Interest earned definition

Accounting Tools

Related Courses Corporate Cash Management Corporate Finance Investing Guidebook What is Interest Earned? These differences in definition can mean that interest earned is recognized later under the cash basis of accounting than under the accrual basis.

article thumbnail

Called up share capital definition

Accounting Tools

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.