Bookkeeping

There are many reasons why a company might issue additional capital stock instead of buying back its shares and increasing its treasury stock. However, the company may suffer a short-term monetary advantage in favor of a long-term ownership or buyback strategy. Capital stock and treasury stock both describe two different types of what is balance …

Treasury Stock Treasury Shares: Definition, Use on Balance Sheets, and Example Lire la suite »

A music production company might own the rights to songs, which means that whenever a song is played or sold, revenue is earned. Although these assets have no physical properties, they provide a future financial benefit for the music company and the musical artist. Thus, you will often see that when a company is bought …

What Is an Intangible Asset? A Simple Definition for Small Business With Examples Lire la suite »

Unlike physical assets such as machinery or real estate, intangible assets lack a physical presence. They include things like brand recognition, customer loyalty, patents, copyrights and business methodologies. These assets often stem from innovation, creativity or a company’s strategic initiatives which make them unique and hard to replicate. Ignoring these assets can result in a …

Tangible Assets vs Intangible Assets: What’s the Difference? Lire la suite »

In other words, for every dollar of shareholders’ equity, P&G generated 7.53 cents in profit. Though the long-term ROE for the top ten S&P 500 companies has averaged around 18.6%, specific industries can be significantly higher or 5 accounting principles lower. An industry will likely have a lower average ROE if it is highly competitive and …

Return on Equity ROE Calculation and What It Means Lire la suite »