ROE vs. ROA: Understanding Profitability Across Manufacturing, Services, and Hospitality Vinu: Manu, I’ve been hearing a lot about two important financial metrics—Return on Equity (ROE) and Return on Assets (ROA). Can you explain what these terms mean and why they are important? Manu: Sure, Vinu! Le...
Capex vs. Opex: How to Classify Laptops, Software, and App Development Costs? Laptops: Capex or Opex? Vinu: Manu, if a company buys laptops for employees, is it considered a capital expenditure (Capex) or an operating expense (Opex)? Manu: Good question, Vinu! Laptops are considered capital expendit...
Book Profit vs. Cash Profit: Understanding the Key Differences for Financial Stability Vinu: Manu, I often hear about “Book Profit” and “Cash Profit” in financial discussions. Are they the same, or is there a difference? Manu: Good question, Vinu! They are quite different. Book Profit is the profit ...
Depreciation, GST Allocation, and Accounting Treatment: A Practical Guide with Vinu & Manu Vinu: Manu, I bought some laptops for my office, and I am wondering what percentage of depreciation I should use. How do I determine the useful life of these laptops? Manu: Good question, Vinu! The depreciatio...
Decoding Other Comprehensive Income (OCI): Beyond the Profit & Loss Statement Vinu: Vinu: Manu, I was going through a company’s Balance Sheet, and I noticed a section called Other Comprehensive Income (OCI). What exactly is it? Manu: Good question, Vinu! Other Comprehensive Income (OCI) represents c...