Working Capital: Effect on Liquidity & Operations
A business can show a profit on paper and still struggle to pay suppliers, employees, or electricity bills on time. The reason is often not profitability but timing. Money may be stuck in invento…
Learn accounting, GST, finance, and business concepts through practical logic and real-world examples.
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For Class 11–12, B.Com, and CA students who want to truly understand accounting, finance, and taxation.
I built this because I watched smart students struggle with concepts—not because they weren't capable, but because traditional teaching doesn't explain the why.
A business can show a profit on paper and still struggle to pay suppliers, employees, or electricity bills on time. The reason is often not profitability but timing. Money may be stuck in invento…
A business can own ₹5 lakh worth of assets, yet that does not automatically mean the owner has ₹5 lakh invested in it. Some assets may have been purchased using borrowed money. Others may have been…
A machine is purchased for ₹5,00,000. Five years later, someone asks, “How much depreciation should be charged every year?” The calculation looks simple—but one small mistake about residual value…
A business can show ₹80,000 as expenses in its records, but that does not always mean ₹80,000 has actually been paid. Suppose electricity for March is ₹6,000, but the bill will be paid in April. …
A business can buy a machine for ₹10 lakh, yet after a few years the balance sheet may show that machine at a much lower value. The machine has not necessarily been sold, damaged, or physically red…
Imagine a business earns ₹1,00,000 from sales in March, but some of the expenses related to those sales are paid only in April. Should the entire ₹1,00,000 become March's profit? That sounds …
A business can make a sale today, receive the customer's payment three months later, and still need to show that sale in the period in which it was earned. That simple timing issue is where m…
A business can receive ₹1,00,000 from a customer today and still not have ₹1,00,000 as this period's revenue. Similarly, it may pay an expense next month but need to recognise part of that expe…
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