Any information you provide, particularly performance statistics and statements should be open to scrutiny, verifiable and accurate. To overcome these weaknesses, we can use the Herfindahl-Hirschman index (HHI). Third, when there is a merger at the top level, the ratio is unaffected. It is usually more useful to compare companies within the same industry. In…

10-K is short for Form 10-K, which is a document the SEC requires all public companies to file each year. The form presents a financial picture of the company, detailing its revenues, assets, and liabilities for the previous year. It is often lavishly illustrated with professionally shot photos and includes charts, diagrams, maps, and other visuals.…

For example, under certain circumstances, the balance sheet amount shown for inventory actually can reflect net realizable value. The range of accounting alternatives encountered in analyzing this asset emphasizes the importance of reading the notes included with financial statements rather than fixating on a few reported numbers alone. Understanding the normal balance of an account…

You purchased a stove and refrigerator and placed them in service in June. Your basis in the stove is $600 and your basis in the refrigerator is $1,000. Using the half-year convention column in Table 2-2a, the depreciation percentage for Year 1 is 20%. For that year, your depreciation deduction is $120 ($600 × 20%…

By using cash management software effectively, you can help ensure the financial success of your restaurant. With accurate financial data at your fingertips, you can make informed decisions about your business and focus on providing an exceptional dining experience for your customers. By breaking down your restaurant’s cash flow statement into these three sections, you…

You need to account for it in future planning and business performance analysis. Revenue recognition ensures that deferred revenue doesn’t slip through the cracks, but is properly documented and reported in your annual income statement. Accrued revenue (or accrued assets) is an asset such as proceeds from delivery of goods or services. Income is earned…

Because the company has not created any real value simply by announcing a stock dividend, the per-share market price is adjusted according to the proportion of the stock dividend. Scenario 2 – Let’s assume that Bright Ideas Co. begins a new accounting re formula period with $250,000 in retained earnings. During the accounting period, the…

Most landlords will cover essential utilities such as water, sewer, and trash, while tenants must pay the rest. However, you might offer to cover additional utilities to make yourself more competitive and get top dollar from your tenants. Running through this exercise will help you realize that you’ll have to look at numerous figures affecting…

If you need a bookkeeper to take care of all of this for you, check out Bench. We’ll do your bookkeeping each month, producing simple financial statements that show you the health of your business. After you generate your final financial statement, use your statements to track your business’s financial health and make smart financial…

In some manufacturing industries and the textile industry, factoring is one of the financing vehicles of choice. You will typically find accounts receivable factoring through specialized companies, like FundThrough or AltLINE. Factoring companies may also specialize in certain geographies or industries, like construction or trucking. Factoring costs can vary significantly, so reach out to multiple…