Latest posts
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How to Open a Business Bank Account in Ghana: A Complete Guide
Starting and running a business in Ghana is an exciting venture, but one of the first steps toward professionalizing your operations is opening a business bank account. A dedicated account not only separates your personal and business finances but also builds credibility, simplifies tax compliance, and makes it easier to access loans and financial services.…
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Purchase Order
In business, one of the most crucial steps in managing supplier relationships and keeping financial records transparent is the use of purchase orders. Commonly shortened to PO, a purchase order is a formal document created by a buyer and sent to a seller to request specific goods or services. It includes details such as the…
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What Are Source Documents? Major Types, Advantages, and Content
Whenever a business exchanges money, goods, or services, a record of that transaction is created. These records are known as source documents in accounting. They represent the very first evidence that a financial activity took place. For example, when a company issues an invoice, pays a bill with a check, generates a sales receipt, or…
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Asset-Based Valuation: Step-by-Step Guide to Accurate Business Valuation
When people talk about how much a business is worth, the conversation often drifts toward profits, revenue multiples, or projected growth. Yet there is another perspective that strips the discussion back to basics: the value of what the company owns compared to what it owes. This is the essence of an asset-based valuation, an approach…
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Book Value vs Market Value: Definitions, Key Differences, and Real Examples
When people talk about the worth of a company, two very different figures often come up: book value and market value. On the surface, both measure a company’s value, but they come from very different perspectives. One is rooted in accounting records and financial statements, while the other is shaped by investors’ expectations and market…
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What Is Cost Accounting? A Complete Guide to Methods, Pros, and Con
Accounting is not just about producing financial statements for regulators or shareholders—it’s also about helping managers make sound decisions. Cost accounting is one of the most widely used internal accounting methods, designed to break down and analyze costs associated with production or operations. Unlike financial accounting, which primarily looks outward to meet legal and reporting…
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Price-to-Book (P/B) Ratio Explained: Formula, Examples, and Why It Matters for Investors
In the world of investing, numbers tell stories. Among these numbers, the price-to-book ratio, often shortened as P/B ratio, stands out as a tool investors use to judge whether a company is being traded at a fair price in relation to what it owns. By comparing a firm’s market value to its book value, this…
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Profit Margin: Formula, Types, Examples, Pros, and Business Implications
Profit margin is one of the most widely used measures of business performance, giving both managers and investors a clear view of how efficiently a company converts revenue into profit. Expressed as a percentage, profit margin indicates how much profit remains after covering costs for every dollar of revenue generated. For instance, a company with…
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Operating Margin Explained: Definition, Formula, Examples, and Why It Matters for Business Success
Operating margin is one of the most widely used measures of a company’s financial performance. It represents how much profit a business earns from its sales after covering its production and operating expenses but before accounting for interest payments and taxes. Essentially, it tells us what percentage of every dollar of revenue is left once…
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Gross Margin
Gross margin is one of the most fundamental measures of business profitability. It tells us how much money a company keeps from its sales after covering the direct costs of making goods or delivering services. By focusing on the portion of revenue that remains after accounting for production expenses, gross margin provides insight into efficiency…