Based on the project’s risk profile and the returns on comparable investments, the discount rate – i.e., the required rate of return debtors control account – is assumed to be 10%. The discounted payback period, in theory, is the more accurate measure, since fundamentally, a dollar today is worth more than a dollar received in …
Investors can also analyze this using a metric called the quick ratio, which runs the same calculation but only uses cash or cash-like assets. The quick ratio is a strong measure of immediate liquidity, meaning how a firm can respond to financial needs today. The debt-to-equity (D/E) ratio indicates the degree of financial leverage (DFL) …
Understanding Solvency Ratios vs Liquidity Ratios Read More »
Connect to your warehouse, semantic layer, and hundreds of service APIs to put data analysis and dashboards into the hands of business users. The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters. Get instant access to lessons taught by experienced private equity pros and bulge bracket …
Consider a business that offers an early payment discount to its customers, cutting their invoiced total by 3% if they pay within 1 week of invoicing. If every single buyer had taken advantage of the early payment discount, the company would have provided roughly $10 thousand in discounts during that same timeframe. In reality, the …
Contra Accounts: Explained, Popular Types and Examples Read More »
As the fixed assets last longer, the expenses are divided over the item until they’re useful. The IAS 16 of the IFRS governs the rules regarding recognizing and recording the plant assets in the company’s financial statements. Instead, a part of the cost is periodically charged to the expense account to depreciation the plant assets. …
Introduction to Plant Assets Financial Accounting Read More »
To keep this from being an issue, base the estimates on recent actual history, adjusted for your best estimate of production activity in the near future. Because the predetermined overhead rate is based on estimates, calculating it with incomplete or inaccurate data can also skew the budgets, reports, and forecasts created using it. It’s a …
How to Calculate Predetermined Overhead Rate: Formula & Uses Read More »
Rippling’s payroll software is so powerful, it practically runs itself. In New York, the Department of Taxation and Finance (frequently called the Tax Department) is responsible for administering payroll taxes at the state level. Under the Tax Department’s new hire reporting laws, you must report a new hire or a rehired employee within 20 days …
Retained earnings are reported under the shareholder equity section of the balance sheet while the statement of retained earnings outlines the changes in RE during the period. Some benefits of reinvesting in retained earnings include increased growth potential and improved profitability. Reinvesting profits back into the business can help it expand and become more successful over time. Retained earnings can …
How to calculate retained earnings formula + examples Read More »
The second plan, Monthly, accommodates businesses that need monthly bookkeeping services. This plan also includes a dedicated accountant, monthly profit and loss statements and balance sheets, phone, email, and chat support, as well as a Xero or QuickBooks subscription. However, you can share most accounting solutions with an accountant or bookkeeper, including accounting software that …