Ali Hersi Gabeyre on LinkedIn: Celebrating SMEs Day 2024 with SIMAD iLab and IBS Bank I was excited to… (2024)

A simple understanding debits and credits Double-entry of bookkeeping 🧾🇸🇴📖

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The image explains the difference between Book Value and Market Value.1. Book Value is the worth of an asset or company based on its balance sheet, subtracting any depreciation. For example, if a company buys a machine for $100,000 and it loses $10,000 in value over a year, its book value would be $90,000. Book value shows past worth.2. Market Value is the worth of an asset or company in the marketplace, influenced by what people are willing to pay. For example, if a company is valued at $5 million on its balance sheet but investors are willing to pay $7 million, that's its market value. Market value shows current worth.Understanding the difference helps investors spot good or bad investment opportunities. Both values are useful but serve different purposes in business.

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This picture provides a detailed breakdown of the accounting equation and its related components. Here are the key points explained:Core Principle1. Assets: These are resources owned by a business that provide future economic benefits.2. Liabilities: These represent the probable future sacrifices of economic benefits, i.e., what the business owes to third parties.3. Equity: This is the residual interest in the assets of a business after deducting liabilities, representing the owner's stake in the business.Accounting Equation is expressed as:
Assets=Liabilities+EquityThis equation ensures the balance sheet remains balanced, showing that the total value of what a business owns is always equal to the combined value of what it owes and the owner's equity.1. Income Statement:The income statement summarizes a business's revenues and expenses over a specific period.Revenue - Expenses results in Net Profit (Loss), which affects retained earnings in the equity section of the balance sheet.2. Balance Sheet:—Assets: Classified into current (cash, accounts receivable, inventory, etc.) and non-current (long-term investments, property, equipment, etc.).—Liabilities: Divided into current (accounts payable, salaries payable, etc.) and non-current (long-term loans, etc.).—Equity: Consists of owner's equity and retained earnings, showing the net funds invested in the business.Key Takeaways1. The accounting equation is the foundation of the balance sheet.2. The balance sheet provides a snapshot of the business's financial position at a specific point in time.3. The income statement reflects the business's performance over a period, which influences the equity on the balance sheet.

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I’m happy to share that I’ve obtained a new certification: Reading Financial Statements from Corporate Finance Institute® (CFI)!

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Profitability ratios are financial metrics used to evaluate a company's ability to generate profit relative to its revenue, operating costs, balance sheet assets, or shareholders' equity during a specific period. These ratios help stakeholders assess how effectively a company is managing its resources to produce earnings and provide insights into the company's financial health and operational efficiency. Common profitability ratios include gross profit margin, operating profit margin, net profit margin, return on assets (ROA), and return on equity (ROE).

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Ciid Mubarik كل عام وأنت بخير 😍

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I’m happy to share that I’ve obtained a new certification: Work Smarter with Microsoft Excel from Coursera! Alhamdulillah for everything

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Yes sometimes i think 🤔 it’s a rare

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