Owner's stakes. How to record your own investment, payouts, and retained earnings without messing up the cap table.
Equity & Capital
The equity ratio is a critical leverage ratio showing financial strength. Use the equity ratio formula to calculate your proprietary ratio, understand equity ratio interpretation, and learn why a high equity ratio signals stability.
Equity & Capital
Retained earnings are the profits a company keeps to reinvest in growth, not paid as dividends. Understand the retained earnings definition, how this equity account appears on the balance sheet, and what causes retained earnings to increase or result in an accumulated deficit.
Equity & Capital
Understand the normal balance of retained earnings and its purpose. Learn what increases retained earnings and what causes retained earnings to decrease, especially regarding retained earnings and dividends. Master the essential journal entries today.
Equity & Capital
Understand the dual nature of dividends: are dividends assets or liabilities? Learn the essential dividend payment accounting steps, including the dividend declaration journal entry and how cash vs stock dividends impact the balance sheet.
Equity & Capital
Learn the essential rules for accounting for treasury stock. Discover why treasury stock is a debit, master the journal entries for buying, retiring treasury stock, and reissuing treasury stock, and ensure correct presentation on the balance sheet.
Equity & Capital
Understand the critical "equity definition" and the trap of "what is negative equity." Learn "how to calculate equity" and implement strategies to prevent "negative shareholder equity" and "negative equity real estate" crises.
Equity & Capital
Clarify the common stock classification. Understand why common stock isn't an asset or liability for the company, but equity. Master the difference between assets and liabilities and learn the key components of stockholders equity for smarter investing.
Equity & Capital
Understand the retained earnings definition and learn how to prepare a statement of retained earnings. This vital financial document, often called the statement of changes in equity, uses the retained earnings formula to track profits and show the relationship between financial statements.
Equity & Capital
Get clarity on understanding debits and credits in accounting as they relate to equity. Discover the definitive answer to is capital stock a debit or credit, review what is authorized capital stock, and master the fundamentals of accounting for capital stock.
Equity & Capital
Understand what are drawings in accounting and why they are recorded as debits. Learn the drawings account nature, see the effect of drawings on the accounting equation, and master the journal entries for drawings of goods and cash.
Equity & Capital
Demystify accounting basics and learn what is capital in accounting. Discover why capital is a liability and whether it is a debit or credit. We break down the journal entry for capital and ensure you start understanding capital accounts with confidence.
Equity & Capital
Is common stock a debit or credit? Unravel the mystery of equity in accounting. Learn the rules of debits and credits, see common stock journal entries, and understand the accounting for stock repurchase transactions.
