Personal Finance
To understand what is compounding, instead of starting with the theory, let's start with a picture. Imagine that you invested $10,000 for 30 years at 5% interest rate, in one case with compounding and in another without. You can see the result in the chart below: The
Jumble
It turns out that one of the most popular cliches—that money can't buy happiness—may not be true. There is a relationship between money and human brain; this relationship, if not handled correctly, can cause negative effects. There are some ways though to buy happiness that have
Personal Finance
To put in practice the theory on how an income statement is structured (in the article HERE), let's take a look at a couple income statements. I don't want to make you certified accountants therefore we'll just focus on the main peculiarities of the
Personal Finance
It provides a summary of how cash flows have been created or dissolved during the fiscal period. The stress is on cash cause profit (in the income statement) is based on promises, not money coming in. So if you want to know whether a company has cash to pay employees,
Personal Finance
To put in practice the theory on how an income statement is structured (in the article HERE), let's take a look at a couple income statements. I don't want to make you certified accountants therefore we'll just focus on the main peculiarities of the
Personal Finance
The income statement is also called a profit and loss statement, P&L, statement of earnings, or statement of operations. The first important observation is that, as I covered in the financial statements introduction post, the income statement does not show the cash-in and cash-out of the
Personal Finance
To put in practice the theory on how a balance sheet is structured (from the article HERE), let's take a look at a couple balance sheets. I don't want to make you certified accountants therefore we'll just focus on the main peculiarities of the
Personal Finance
The balance sheet is a picture of the working capital of the company in a specific moment in time, or in simple terms, all the things the company owns and owes: Assets represent where the company has invested money, while Liabilities + Equity are where the company took the money to
Personal Finance
Although there are a lot of numbers in accounting and finance, it is not an exact science. This is because: * In many cases they are estimates of reality. * Different countries have different rules and follow different standards * International standards often are not very strict in terms of the structure for