10 Essentials of Forex Trading by Martinez J PDF

By Martinez J

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For a company that has been in business only one year, the retained earnings figure should be equal to the profits of the company that year, less the dividends paid by the company that year. The large figure presented would be more typical of a company that had been in business and making profits for many years. Capitalization is a hard-to-define word. It comes up in many contexts within the business world. On the balance sheet, it usually refers to the combination of long-term debt plus stockholders’ equity.

As the name implies, the balance sheet—sometimes referred to as the “Statement of Financial Condition” — must balance, meaning that assets (the left side) are equal to the sum of liabilities and owner’s equity (the right side). Income statement. The income statement shows the revenue (sales) that the company has made, the expenses that have been incurred to make those sales, and the profit or loss derived therefrom. The income statement shows what has happened over a period of time. ” This statement is also called the Profit and Loss Statement, or the P&L.

Salary is a cost incurred while conducting business and attempting to make a profit. A dividend is something a company may choose to pay with the profit it earned. Although $5 gets deducted from cash in either case, the rest of the accounting is quite different. Since Jones decided to pay himself the $5 as a dividend, he deducted $5 from the Cash account on the balance sheet, and $5 from the Net profit after tax account on the income statement. This left only $4 of the profit to be added to Retained earnings.

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10 Essentials of Forex Trading by Martinez J

by Donald

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