By contrast, fixed costs such as managerial salaries, rent, and utilities are not included in COGS. Inventory is a particularly important component of COGS, and accounting rules permit several different approaches for how to include it in the calcul... Read more
The earnings per share (EPS) reported by a company per GAAP accounting standards can be found near the bottom of a company’s income statement, right below net income. On a fully diluted basis, our company has a total of 180 million shares outs... Read more
Based on prevailing interest rates available to the company, it may be most favorable for the business to acquire debt assets by incurring liabilities. Because payment is due within a year, investors and analysts are keen to ascertain that a company... Read more
All businesses must face different kinds of costs throughout their operation, which can be grouped into fixed cost or variable cost. Understanding fixed cost is of great importance for companies to price their goods or services reasonably. A fixed c... Read more
The number of shares outstanding can typically be found on the company’s balance sheet. If there are treasury shares, it is important to subtract those from the number of issued shares to get the number of outstanding shares. Advisory services... Read more
If you’re a small business owner, you know that borrowing money is both inevitable and essential. You need working capital to get your business off the ground or grow it to new heights. A free Google Sheets DCF Model Template to calculate the... Read more
The bad debts are the losses that the business suffers because it did not receive immediate payment for the sold goods and provided services. If 6.67% sounds like a reasonable estimate for future uncollectible accounts, you would then create an all... Read more
In a partnership, separate entries are made to close each partner's drawing account to his or her own capital account. If a corporation has more than one class of stock and uses dividend accounts to record dividend payments to investors, it usually... Read more
Typically, the difference between the cash book and passbook balance arises due to the items that appear only in the passbook. Therefore, it makes sense to first record these items in the cash book to determine the adjusted balance of the cash book... Read more
You can compare various offers accurately only if you know the effective annual interest rate of each one. The format we presented for the effective interest rate can be used as an Excel formula. In the case of compounding, the EAR is always higher... Read more
