An income statement, also known as a profit and loss statement, is a financial statement that summarizes a company’s revenues, expenses, and net income over a specific period of time, typically a quarter or a year. The income statement starts with the company’s total revenues for the period, which includes all income generated from the…
Gross wages refer to the total amount of money an employee earns before any deductions are taken out. This also includes the employee’s base pay, as well as any bonuses, commissions, or overtime pay they may have earned during a pay period. Gross wages are important to both employees and employers because they are used…
Gross profit is the difference between a company’s revenue and the cost of goods sold. It represents the amount of money that a company earns from its sales, after deducting the direct costs associated with producing and delivering those goods or services. To calculate gross profit, the cost of goods sold is subtracted from the…
Financial statements are documents that provide information about a business’s financial performance and position. Financial statements typically include an income statement, a balance sheet, and a cash flow statement. Financial statements are important to businesses for a variety of reasons. They provide a comprehensive view of the company’s financial performance and position, which can be…
Fixed assets are long-term assets that are held by a business to generate provider-providing goods and services. Fixed assets include tangible assets, such as buildings, land, equipment, and vehicles, as well as intangible assets, such as patents, trademarks, and copyrights. Fixed assets differ from current assets in that they are not expected to be sold…
Financial projections are estimates of future financial performance based on historical financial data, current market conditions, and other factors that may impact the business. Financial projections are an important tool for businesses to plan for the future, make strategic decisions, and obtain financing. This typically includes income statements, balance sheets, and cash flow statements that…
Expenses are costs incurred by individuals or businesses to generate revenue or achieve specific objectives. Expenses can take many forms, including salaries and wages, rent, utilities, equipment, supplies, advertising, and travel, among others. In business, expenses are typically classified as either operating expenses or capital expenses. Operating expenses are costs associated with the day-to-day operations…
An emergency fund is a financial safety net or reserve that individuals or businesses set aside to cover unexpected expenses, financial emergencies, or a temporary loss of income. It is a designated amount of money that is readily accessible and separate from regular day-to-day spending and savings. The purpose of an emergency fund is to…
A dividend is a payment made by a corporation or company to its shareholders as a distribution of profits. Dividends are usually paid out in cash, but they can also be paid in the form of stock or other assets. Dividends are typically paid out regularly, such as quarterly or annually, and the amount of…
A deposit is a sum of money that is placed into a bank account or other financial account as a way of storing or saving funds. Deposits can be made in a variety of forms, including cash, checks, electronic transfers, and other payment methods. Deposits are important for individuals and businesses because they provide a…
