Accounting
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Gross income in United States tax law is receipts and gains from all sources less cost of goods sold . Gross income is the starting point for determining Federal and state income tax of individuals, corporations, estates and trusts, whether resident or nonresident. [ 1 ] "Except as otherwise provided" by law, Gross income means "all income from whatever source," and is not limited to cash received. However, tax regulations expand on this and say "all income from whatever source derived, unless excluded by law." The amount of income recognized is generally the value received or which the taxpayer has a right to receive. Certain types of income are specifically excluded from gross income.
Gross income - Wikipedia, the free encyclopedia
Net income - Wikipedia, the free encyclopedia
Net income is the residual income of a firm after adding total revenue and gains and subtracting all expenses and losses for the reporting period. Net income can be distributed among holders of common stock as a dividend or held by the firm as an addition to retained earnings . As profit and earnings are used synonymously for income (also depending on UK and US usage), net earnings and net profit are commonly found as synonyms for net income. Often, the term income is substituted for net income, yet this is not preferred due to the possible ambiguity. Net income is informally called the bottom line because it is typically found on the last line of a company's income statement (a related term is top line , meaning revenue , which forms the first line of the account statement).In financial accounting , a balance sheet or statement of financial position is a summary of the financial balances of a sole proprietorship , a business partnership or a company . Assets , liabilities and ownership equity are listed as of a specific date, such as the end of its financial year . A balance sheet is often described as a "snapshot of a company's financial condition". [ 1 ] Of the four basic financial statements , the balance sheet is the only statement which applies to a single point in time of a business' calendar year. A standard company balance sheet has three parts: assets, liabilities and ownership equity. The main categories of assets are usually listed first, and typically in order of liquidity . [ 2 ] Assets are followed by the liabilities.
Balance sheet - Wikipedia, the free encyclopedia
In financial accounting , a cash flow statement , also known as statement of cash flows or funds flow statement , [ 1 ] is a financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents , and breaks the analysis down to operating, investing, and financing activities. Essentially, the cash flow statement is concerned with the flow of cash in and cash out of the business. The statement captures both the current operating results and the accompanying changes in the balance sheet . [ 1 ] As an analytical tool, the statement of cash flows is useful in determining the short-term viability of a company, particularly its ability to pay bills. International Accounting Standard 7 (IAS 7), is the International Accounting Standard that deals with cash flow statements.
Cash flow statement - Wikipedia, the free encyclopedia
Income statement (also referred to as profit and loss statement (P&L) , revenue statement , statement of financial performance , earnings statement , operating statement or statement of operations ) [ 1 ] is a company's financial statement that indicates how the revenue (money received from the sale of products and services before expenses are taken out, also known as the "top line") is transformed into the net income (the result after all revenues and expenses have been accounted for, also known as Net Profit or the "bottom line"). It displays the revenues recognized for a specific period, and the cost and expenses charged against these revenues, including write-offs (e.g., depreciation and amortization of various assets ) and taxes . [ 1 ] The purpose of the income statement is to show managers and investors whether the company made or lost money during the period being reported. The important thing to remember about an income statement is that it represents a period of time.
Income statement - Wikipedia, the free encyclopedia
Fixed cost - Wikipedia, the free encyclopedia
In economics, fixed costs are business expenses that are not dependent on the level of goods or services produced by the business. [ 1 ] They tend to be time-related, such as salaries or rents being paid per month, and are often referred to as overhead costs. This is in contrast to variable costs , which are volume-related (and are paid per quantity produced). In management accounting , fixed costs are defined as expenses that do not change as a function of the activity of a business, within the relevant period. For example, a retailer must pay rent and utility bills irrespective of sales. In marketing , it is necessary to know how costs divide between variable and fixed. "This distinction is crucial in forecasting the earnings generated by various changes in unit sales and thus the financial impact of proposed marketing campaigns."
In finance , a convertible note (or, if it has a maturity of greater than 10 years, a convertible debenture ) is a type of bond that the holder can convert into shares of common stock in the issuing company or cash of equal value, at an agreed-upon price. It is a hybrid security with debt- and equity-like features. Although it typically has a coupon rate lower than that of similar, non-convertible debt, the instrument carries additional value through the option to convert the bond to stock, and thereby participate in further growth in the company's equity value.
Convertible bond - Wikipedia, the free encyclopedia
Stock - Wikipedia, the free encyclopedia
The capital stock (or simply stock ) of a business entity represents the original capital paid into or invested in the business by its founders. It serves as a security for the creditors of a business since it cannot be withdrawn to the detriment of the creditors. Stock is different from the property and the assets of a business which may fluctuate in quantity and value. [ 1 ] [ edit ] Shares
Common stock - Wikipedia, the free encyclopedia
Common stock is a form of corporate equity ownership, a type of security . The terms " voting share " or "ordinary share" are also used in other parts of the world; common stock being primarily used in the United States. It is called "common" to distinguish it from preferred stock . If both types of stock exist, common stock holders cannot be paid dividends until all preferred stock dividends (including payments in arrears) are paid in full. In the event of bankruptcy , common stock investors receive any remaining funds after bondholders, creditors (including employees), and preferred stock holders are paid. As such, such investors often receive nothing after a bankruptcy.
Preferred stock - Wikipedia, the free encyclopedia
Preferred stock , also called preferred shares , preference shares , or simply preferreds , is a special equity security that has properties of both an equity and a debt instrument and is generally considered a hybrid instrument. Preferreds are senior (i.e. higher ranking) to common stock , but are subordinate to bonds in terms of claim or rights to their share of the assets of the company. [ 1 ] Preferred stock usually carries no voting rights, [ 2 ] but may carry a dividend and may have priority over common stock in the payment of dividends and upon liquidation . Terms of the preferred stock are stated in a "Certificate of Designation". Similar to bonds, preferred stocks are rated by the major credit rating companies.
An employee stock option [ 1 ] is a call option on the common stock of a company, issued as a form of cash compensation . Restrictions on the option (such as vesting and limited transferability) attempt to align the holder's interest with those of the business shareholders. If the company's stock rises, holders of options generally experience a direct financial benefit. This gives employees an incentive to behave in ways that will boost the company's stock price.
Employee stock option - Wikipedia, the free encyclopedia
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