For example, suppose a company’s current assets consist of $50,000 in cash plus $100,000 in accounts receivable. Its current liabilities, meanwhile, consist of $100,000 in accounts payable. In this scenario, the company would have a current ratio of 1.5, calculated by dividing its current assets ($150,000) by its current liabilities ($100,000). For very small businesses, […]
Many companies will use point of sale technology linked with their books to record sales transactions. Beyond sales, there are also expenses that can come in many varieties. The resulting financial reports will allow you to see how your cash is moving and how much money is available to you at any given time, among […]
Keep in mind that support is only available via email or one-way call. If you’re a larger company with multiple bank accounts, go for a more robust accounting system like QuickBooks Enterprise. For heavily inventory-based businesses, we suggest an ERP like NetSuite ERP or Sage Intacct. Xero is not free, though it does provide a […]
An investment asset’s liquidity is its ability to be sold rather quickly and easily, at (or close to) fair market value. Some assets, such as savings accounts or short-term securities like Treasury bills, can be liquidated with ease. Investors simply need to withdraw the funds, cash out the certificates or sell the stock on the […]
This is posted to the Accounts Receivable T-account on the debit side. This is posted to the Service Revenue T-account on the credit side. This is posted to the Accounts Payable T-account on the credit side. Wages to employees are a business expense and decrease owner’s equity, so the Wages Expense account will be debited […]
Right after the general information, please write a sentence in which you clearly say that these financial statements are under IFRS. Notes are the integral part of a complete set of financial statements in line with IAS 1. It’s the amount of money that would be left if all assets were sold and all liabilities […]
They may inaccurately estimate their time or neglect to document overtime shifts. Overtime miscalculations can lead to legal complaints, not to mention a disgruntled workforce. And with each state having varying regulations, it’s easy to get lost. And you need ongoing support, not impersonal, number call centers. To succeed, you need a dedicated team of […]
The short/current long-term debt is a separate line item on a balance sheet account. It outlines the total amount of debt that must be paid within the current year—within the next 12 months. Both creditors and investors use this item to determine whether a company is liquid enough to pay off its short-term obligations. A company can keep its […]
In effect, the process can be more difficult in comparison to a quick calculation of gross profit and the gross margin using the income statement, yet is worthwhile in terms of deriving product-level insights. The contribution margin ratio is calculated as (Revenue – Variable Costs) / Revenue. Investors examine contribution margins to determine if a […]
Gross margin is the percentage of revenue that exceeds a company’s Costs of Goods Sold, calculated using the formula below. However, recording COGS accurately can be complicated by variables such as shipping delays, returns, and missing vendor invoices – just to name a few. In certain scenarios such as when sales impact multiple periods, recording […]
