is magnified by 10 to 30 dollars from creditors. This meant that in good years‚ shareholders benefited from profits that were juiced by leverage‚ but should things go wrong‚ they could shift their potential losses to creditors. As a result‚ paying bank executives in stock did not mitigate their behavior; in fact‚ the most senior executives at both Bear Stearns and Lehman had and lost enormous amounts of money tied up in their companies. Third‚ creditors had only limited incentives to watch over
Premium Subprime mortgage crisis Bank Debt
LIFTING THE CORPORATE VEIL (i) Introduction (ii) Principles of Corporate Personality (iii)Statutory Exceptions (iv)Common Law and the Mere Façade Test (v) Agency and Groups (vi)Conclusions INTRODUCTION 1. When a creditor discovers that a debtor company is insolvent‚ the creditor will frequently want to recover the debt from a shareholder‚ director or associate of the insolvent company. There exist various statutory and common law mechanisms by which the corporate veil can be lifted and liability
Premium Corporation Subsidiary Parent company
basic financial statements used in accounting. It will describe the purpose of the four financial statements. How these statements would be useful to internal users‚ such as managers‚ and employees. How the external users‚ such as investors‚ and creditors would find these statements useful. Four Basic Financial Statements The four basic financial statements used in accounting are‚ the income statement‚ statement of retained earnings‚ balance sheet‚ and statement of cash flows. The income statement
Premium Income statement Financial statements Generally Accepted Accounting Principles
up on the creditors‚ the company and the employees. Winding up is the process to bring an end the existence of the company. It is also known as liquidation. When a company is liquidated‚ its structure survives the appointment of a liquidator‚ but not the liquidation. Control of assets‚ conducting business‚ and other financial affairs are transferred to the liquidator. The directors cease to have any authority. All bank accounts are frozen‚ any employment can be terminated. For creditors‚ after commencement
Premium Bankruptcy Liquidation Secured creditor
AND CASH FLOW 1. Liquidity measures how quickly and easily an asset can be converted to cash without significant loss in value. It’s desirable for firms to have high liquidity so that they have a large factor of safety in meeting short-term creditor demands. However‚ since liquidity also has an opportunity cost associated with it - namely that higher returns can generally be found by investing the cash into productive assets - low liquidity levels are also desirable to the firm. It’s up to the
Premium Generally Accepted Accounting Principles Cash flow Balance sheet
Slide 1-1 Chapter 1 Accounting in Action Financial Accounting‚ IFRS Edition Weygandt Kimmel Kieso Slide 1-2 Study Objectives 1. 2. 3. Explain what accounting is. Identify the users and uses of accounting. Understand why ethics is a fundamental business concept. 4. 5. 6. 7. 8. Explain accounting standards and the measurement principles. Explain the monetary unit assumption and the economic entity assumption. State the accounting equation‚ and define its components. Analyze
Premium Finance Economics Management
Pune (hereinafter called the “Creditor”) having agreed to lend Mr. Chulbul Pandey residing at Lavasa‚ Pune (hereinafter called the “Debtor”) a sum of Rs. 5‚00‚000/- (Rupees Five Lakhs Only)‚ Mr. Rahul Malhotra residing at Chinchwad‚ Pune (hereinafter called the “Surety”) at the request of the Debtor hereby undertakes to pay to the Creditor the said amount of Rs 5‚00‚000/- or any part thereof remaining unpaid in case of default of payment by the Debtor to the Creditor within the time stipulated by
Premium Money Debt
html Filing with the State. (2012). Retrieved July 27‚ 2012‚ from Small Business Notes: http://www.smallbusinessnotes.com/managing-your-business/filing-with-the-state.html Liquidation Distributions to Shareholders. (2012). TaxHub. Notification to Creditors. (2012). Retrieved July 27‚ 2012‚ from Small Business Notes: http://www.smallbusinessnotes.com/managing-your-business/notification-to-creditors.html IRS. (2012). Publication 550. Johnson‚ J. (2012). Difference in a Liquidated Company and a Dissolved
Premium Liquidation Stock Stock market
The circumstance given depicts how important cash discounts are when looked into in real life. The latter compels debtors to pay on time their liabilities and when they do so‚ gaining deductions on their payables to one or several persons (their creditors). Accordingly‚ it also showcases some alternation of standards as businesspersons become more aware on how to manage or manipulate the said deductions. Like in the given situation wherein the cash discounts were still recorded though paid after
Premium Debt Money Debtor
End-of-Chapter Questions (3-2) Financial ratio analysis is conducted by managers‚ equity investors‚ long-term creditors and short-term creditors. What is the primary emphasis of each of these groups in evaluating ratios? Managers deal with all types of ratios. It is important for them to judge and improve the overall financial position of the company. Financial ratios are one of the most common tools of managerial decision making. Financial ratios involve the comparison of various figures from
Premium Financial ratio Financial ratios