Bookkeeping

The big difference between the two is that the quick ratio doesn’t include inventory in a company’s current assets. This is due to the belief that inventory can be difficult to sell off rapidly, and to do so may mean selling it at a loss. The current ratio is just one of many financial ratios […]

Outstanding shares also include any blocks of stock held by institutional investors, such as mutual or pension fund companies. Alternatively, the total number of shares outstanding can be easily calculated as a company’s market capitalization divided by the current share price. Before their availability on the secondary market, shares are authorized, issued, and, finally, purchased

For a note stated in days, the number of days is counted, omitting the issue date and counting the due date. The formula for computing interest is Face value × Interest rate × Time. One way to get people to pay you sooner is to make it worth their while. Offering them a discount for

When she’s not writing, Barbara likes to research public companies and play Pickleball, Texas Hold ‘em poker, bridge, and Mah Jongg. While that might please those stakeholders, there is a counterargument that some businesses may be better off deploying that cash elsewhere, with an eye toward growth. Helping organizations spend smarter and more efficiently by automating

Let’s test-drive some of these scenarios with the stuffed animal manufacturing business. No business decisions should be made solely on one number, so let’s bring in more context on how the business did last month. One common misconception pertains to the difference between the CM and the gross margin (GM). A high contribution ratio tells

Most, but not all, expenses are deductible from a company’s income (revenues) to arrive at its taxable income. The most common tax-deductible expenses include depreciation and amortization, rent, salaries, benefits, and wages, marketing, advertising, and promotion. The Tax Cuts and Jobs Act increased the number of small business taxpayers who were entitled to use the

The bank probably have that transaction marked as “pending” on 30 September, and “cleared” on 2 October. Personally, I use the earlier date in Quicken so that it looks like I lose money earlier. This isn't 100% accurate, but it keeps me from thinking my accounts have more money than they would otherwise have. For

It is important to know that land is not a depreciable property but landed properties such as buildings, warehouses, storage facilities, and other constructions are depreciable properties. The definition of depreciate is "to diminish in value over a period of time." An asset gets depreciated by using either the Straight Line Method or the Written

Understanding how a nominal account works while entering journal entries will help you understand your gains or losses. For all expenses and losses, you need to debit the amount, and for all gains and income, credit the amount. After an event is identified to have an economic impact on the accounting equation, the business event must be 1040

Understanding how a nominal account works while entering journal entries will help you understand your gains or losses. For all expenses and losses, you need to debit the amount, and for all gains and income, credit the amount. After an event is identified to have an economic impact on the accounting equation, the business event must be 1040