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What is the Accounting Equation? Explaining Assets = Liabilities + Equity

Peak Frameworks

The accounting equation is a fundamental concept in finance that every private equity professional, investment banker, and corporate , finance expert should be familiar with. In this article, we will explore the components of the accounting equation, its importance in finance, and real-world examples that illustrate its significance.

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Why Private Equity is Hungry for Small Businesses – Here's How You Can Cash In

How2Exit

Engagingly, Coffey addresses the topics of market volatility, the significance of debt coverage ratios, and the ripe opportunity landscape for acquisitions, particularly for service-based businesses with recurring revenue streams. It's essential to maintain a healthy debt service coverage ratio, especially in uncertain economic climates.

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Allowance Method

Wall Street Mojo

The Allowance Method in accounting sets aside funds to cover anticipated bad debts from credit sales. Acknowledging and preparing for possible losses from uncollectible accounts contributes to a more realistic depiction of the company’s financial situation, fostering transparency and informed financial management.

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COVID-19 and Credit: Debt Market Volatility and Insurance Brokerage M&A

Sica Fletcher

What is generally less understood is the impact of the pandemic on the debt markets. Many PE-backed Insurance Brokers Secured Sizable Loans Immediately Prior to the Crisis Over the past several years, the demand for high yield debt issued by private equity (PE) backed insurance brokers has been extremely strong.

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How to Read a Balance Sheet?

Wall Street Mojo

It is based on the accounting equation that states that the sum of the total liabilities and the owner's capital equals the total assets of the company. The balance sheet, the Income Statement, and the Cash Flow statement are the three primary financial statements in accounting. How to Read Balance Sheet Liabilities?

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Accrued Interest Formula

Wall Street Mojo

Accrued interest Accrued Interest Accrued Interest is the unsettled interest amount which is either earned by the company or which is payable by the company within the same accounting period. read more is that amount of interest, which is due for a debt or bond but not paid to the lender of the bond.

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How the Growth of Private Credit is Impacting Private Equity

OfficeHours

In particular, new guidelines from the FDIC and Federal Reserve (among other governmental agencies) made it more difficult for banks to underwrite financings that resulted in debt-to-EBITDA ratios in excess of 6.0x. This capital is released once investors buy the debt off the banks’ balance sheets.