HOME ABOUT US ARTICLES BLOG FAQ CONTACT US
HOME ABOUT US ARTICLES BLOG FAQ CONTACT US
Accounting Software Australia, MYOB, Quickbooks, accounts software, bookkeeping software
Accounting Software Australia, MYOB, Quickbooks, accounts software, bookkeeping software

Articles Blog

Business Financials – What is equity meaning in a business & accounting?

images/Bus Fin Equity meaning.jpg

Many business owners often inquire about the concept of equity.

Equity can be calculated by subtracting the liabilities from the assets of the business at their cost value, as reflected in the Balance Sheet financial statement.

This can be represented by the formula:

ASSETS – LIABILITIES = EQUITY.

Equity is sometimes referred to as Owner’s Equity for sole proprietors, or Shareholder/Stockholder Equity for companies with multiple directors.

In the context of a company's Balance Sheet, equity encompasses the money contributed by the owners, shareholders, or stockholders, in addition to the retained earnings (profit/loss from previous years). It depends on how the chart of accounts has been set out.

Owner’s Equity may also comprise of accounts such as Capital, Drawings, and Current Year Net Income/Earnings, while Shareholder Equity may include accounts like Paid-In Capital (including Preferred Stock, Common Stock, Paid-In Capital in Excess of Par Value, and Treasury Stock), Retained Earnings/Net Income, and Less Treasury Stock.

It is important to note that the market value of assets, such as plant and equipment, is not typically represented in the Balance Sheet unless adjustments are made to reflect changes in value, such as decline in value as the asset ages. These adjustments are balanced in a special depreciation asset account. Consequently, the company's market value may not accurately reflect the true market value unless such adjustments have been made.

Equity is also utilized in several key financial ratios that help assess the financial health of the business, including the Debt to Equity ratio and Return on Equity.

Need help? Not sure?

Call for FREE 30min advice / strategy session today! 0407 361 596

Call 0407 361 596 Aust and also get FREE “Avoid these GST mistakes” – There’s 18 that the Tax Office see regularly –

Get them right!

~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~

Cash Flow tip – 5 ways to increase sales in business

images/Cash flow tip 5 ways increase sales.jpg

Here are five strategies to boost business sales.

1.      Understanding your expenses is crucial when considering offering discounts.

While discounts can attract new customers, selling at a loss will not contribute to positive cash flow. It's important to thoroughly assess the costs and impact of any discount offered, including understanding the overall cost basis, ideal pricing, offer costs, and profit margins to determine if the discount will result in breaking even or operating at a loss.

2.      Instead of discounting, adding value through bundling products or services is recommended.

By creating bundles, businesses can provide both perceived and tangible value to their offerings at minimal cost. For example, car manufacturers offering maintenance agreements with new car purchases not only address customer concerns about potential maintenance costs but also add value by reducing perceived risk.

3.      Developing higher-priced back-end products or services can offset the potential lack of profitability from initial customer acquisition efforts.

For instance, offering free initial hours of service with subsequent hours at a higher price, or providing discounted services with the anticipation of future higher-priced consultations, can help generate profits.

4.      Focusing on encouraging repeat business is essential for volume-driven businesses like retail.

The goal is to cultivate loyalty and increase customer frequency, as it often takes multiple transactions before a customer becomes profitable. Implementing loyalty programs, VIP offers, and other frequent-shopper programs can systematize repeat business, while leveraging incentives like "free" to attract customers.

5.      Pre-selling products or services can accelerate sales by allowing customers to plan for the future or get an early start on shopping.

Additionally, offering to take back old products at a pre-arranged price can incentivize customers to make purchases sooner.

Need help? Not sure? Call for FREE 30min advice / strategy session today!

Email This email address is being protected from spambots. You need JavaScript enabled to view it. or call 0407 361 596 Australia

~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~

More Articles...

  1. Business Tax Tip – ATO Record keeping requirements for small businesses
  2. Business Financials – Liabilities and Debt - Difference?
  3. Cash Flow tip – How we smoothed out cash for this business
  4. Bookkeeping – Wage theft MOST COMMON breach – Fair work Inspectors find
  5. Business Tip – 5 things to do when you feel stuck in business
  6. Business Tax Tip – Starting a Business in Australia – Things to Consider
  7. Business Financials – How the Accumulated Depreciation account works
  8. Business Tip – Equipment purchase – use cash or borrow?
  9. Business Tip – Do’s & Don’ts of Selling
  10. Bookkeeping - How to enter Asset Purchase accounting journal entries
  11. Business Tax Tip – Termination of Employment Pays - Australia
  12. Business Tax Tip – ATO Staff Christmas Party & Gifts for staff and clients – What is claimable?
  13. Cash Flow tip – The Difference between Cash Flow & Budget
  14. Business Tip – Casual Employment Requirements + Information Statement to supply! From March 2021
  15. Cash Flow tip – How to manage growth in your small business - 4 traps to growth
  16. Bookkeeping – MYOB TEAM to manage timesheets, rosters, on-boarding and payslips
  17. Business Tax Tip – Dad & Partner pay
  18. Business Financials – Cash Flow Statement Example – How it is prepared
  19. Bookkeeping – 6 Tools to get your accounts in order
  20. Business Tax Tip – Beware - “I didn’t know” is no defense to the ATO
  21. Cash Flow Tips – Making Profit but no Cash left? Where is the money?
  22. Business Tax Tip – What is Fringe Benefits Tax – How it works - Australia
  23. Business Financials – How the Cash Flow Statement works
  24. Cash Flow tip – Does Cash Flow mean Profit – what is the difference?
  25. Business Tip – Gain a Competitive Advantage in Business – Organisation Health and how to achieve it
  26. Business Tax Tip – How to increase revenue with advice – Survey results
  27. TPAR – Reckon One - What you need to know – (Taxable Payments Annual Report) – due 28 August
  28. TPAR – Xero - What you need to know – (Taxable Payments Annual Report) – due 28 August
  29. TPAR – MYOB - What you need to know – (Taxable Payments Annual Report) – due 28 August
  30. Business Tax Tip – TPAR – What you need to know – (Taxable Payments Annual Report) – due 28 August
  31. Bookkeeping – Let down by her accountant and bookkeeper – she needed to be up to date
  32. Business Tip – Top 5 Business mistakes & Turning mistakes to Profit!
  33. Bookkeeping – Accounting for Barter Transactions - Barter transaction example Aust Tax Office (ATO)
  34. Business Financials – Balance Sheet – the formula & example
  35. Cash Flow Tip – Ways to Improve Your Cash Flow in Small Business
  36. QBO – Quickbooks Online - End of Financial Year 2023 Australia – Support for preparation of your books
  37. Xero – End of Financial Year 2023 Australia – Support for preparation of your books
  38. Reckon - End of Financial Year 2023 Australia – Support for preparation of your books
  39. MYOB – End of Financial Year 2023 Australia – Accounting and Payroll end of year +STP Finalisation
  40. Business Financials – Year End Checklist to Review Accounts and Tax Planning EOFY
  41. Cash Flow tip – What the Cash Flow Statement shows
  42. Business Financials – Use Profit and Loss Statements: A Beginner's Guide to Financial Health Analysis
  43. Bookkeeping – RESC super meaning – What are (and what not) Reportable Employer Super Contribitions?
  44. Bookkeeping – RESC super meaning – What are (and what not) Reportable Employer Super Contribitions? (2)
  45. Business Tax Tip – GST on Hire Purchase – How to claim, and tax treatment
  46. Business Financials – What is the accounting equation for the Balance Sheet with examples
  47. Cash Flow Tip – Understand & Manage cash flow in business - PLUS tips on HOW to manage cash flow
  48. Business Tips – Selling techniques in business – 4 types of selling techniques plus 2 more!
  49. Business Financials – How GAAP works – Accounting standards or principles
  50. Cash Flow tip – Business KPIs for growth – How we help clients
  51. Business Tips – How to avoid burnout as a business owner
  52. Business Tax Tip – Tax on Bonus, Commissions, Back Pay etc
  53. Business Financials – Financial Ratios that give you insight to Financial Health of your business
  54. Business Tips – Key steps to plan a better business year
  55. Business Tax Tip – Tax rates on terminations for unused annual & long service leave
  56. Business Financials – Debt to Equity ratio formula and how to calculate and use it
  57. Cash Flow tip – 5 ways to improve cash flow in business and examples
  58. Business Financials – Profit Margins – 3 levels and how they work
  59. Business Tax Tip – GST and Sale of Business Assets
  60. Business Financials – Quick Ratio formula calculation (plus vs Current ratio)
  61. Cash Flow tip – How to smooth out and improve business cash flow
  62. Business & Marketing Tips – What we learn from Dyson about what customers want
  63. Business Tax Tip – Instant Asset Write-off – 2022 summary
  64. Business Financials – What is Working Capital – Calculate and use the working capital formula
  65. Cashflow Tips – Worth claiming personal expenses through business?
  66. Business Tax Tip – GST on Chattel Mortgage and GST – how it applies
  67. Bookkeeping – Annual Leave Cash-out not reducing Annual Leave Balance
  68. Business Financials – What is the Current Ratio formula & what does it tell us
  69. Cash Flow tip – Your staff and what cash flow means to them
  70. Business Financials – Equity meaning in your accounting financials
  71. Xero – Pay bill in Xero – How to pay regular amounts and split over several bills
  72. Business Financials – How to Calculate Cost of Sales (COS) formula or Cost of Goods Sold (COGS)
  73. Cash Flow tip – Does profit mean cash – Know the difference between showing profit and having cash
  74. Bookkeeping – Loan to the business by owner – How to record in the accounts
  75. Business Tax Tip – What are input-taxed sales?
  76. Business Financials – Difference between current and non-current liabilities?
  77. TPAR – Reckon One – Set up the Taxable Payments Report in Reckon One
  78. TPAR Reckon-Hosted – Set up the Taxable Payments Annual report in Reckon-Hosted software
  79. TPAR Xero – Setting up Taxable Payments Annual Report in Xero software
  80. MYOB – TPAR reporting – Set up the Taxable Payments Annual Report (TPAR) – AR, Essentials, Business
  81. Business Tax Tip – TPAR – All you need to understand – Taxable Payments Annual Report – due 28 Aug
  82. Bookkeeping – June wages are paid in July – which tax year will apply?
  83. Cash Flow tip – Rise to Premium Pricing
  84. QBO – Quickbooks Online – EOFY – Year End Business Preparation and Planning – Support to prepare your accounts!
  85. Xero - EOFY – Year End Business Preparation and Planning – Support to prepare your accounts!
  86. Reckon – EOFY – Year End Business Preparation and Planning – Support to prepare your accounts!
  87. Business Tax Tip – EOFY – Prepare your year-end accounts – Tips 10-18
  88. MYOB – EOFY – Accounting and Finalisation – End of Financial Year
  89. Business Tax Tip – EOFY – How to prepare your year-end accounts – Tips 1-9
  90. Business Tips – Don’t give away business with TOO much free advice – tricks to watch!
  91. Business Tax Tip – Business structure and handling tax on profits
  92. Business Financials – Liability vs Debt – Learn the difference
  93. Cash Flow tip – Price Discount Strategy – Or should you ADD value?
  94. Business Tax Tip – Record Keeping Requirements
  95. Bookkeeping – Case Study - Client Entitlements fix up
  96. Business Financials – Accumulated Depreciation on the Balance Sheet – How this account works
  97. Cash Flow tip ~ 5 ways to increase your business sales
  98. Business Tips – How to grow business sales – A sales strategy to grow small business
  99. Business Tax Tip – Starting your own business in Australia – Responsibilities
  100. Business Financials – Are you making profit but no cash available?
Accounting Software Australia, MYOB, Quickbooks, accounts software, bookkeeping software

CATEGORIES


CUSTOMER LOGIN





Forgot your password?
Forgot your username?

YOUR CART

The cart is empty

Accounting Software Australia, MYOB, Quickbooks, accounts software, bookkeeping software

CATEGORIES


CUSTOMER LOGIN





Forgot your password?
Forgot your username?

YOUR CART

The cart is empty

Accounting Software Australia, MYOB, Quickbooks, accounts software, bookkeeping software
© Account Keeping Plus 2020   |   Website Design by Best Web Site Design Melbourne    |   Admin