Accounting

OverviewProgressive TaxRegressive TaxWho Pays What, Where, When and How? All tax schemes can be characterized as either progressive or regressive. The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Any other tax that confers an advantage to wealthy individuals is regressive. The Bureau of Labor Statistics annual Consumer Expe […]

Let’s say Company A records EBIT of $300,000, lease payments of $200,000, and $50,000 in interest expense. The calculation is $300,000 plus $200,000 divided by $50,000 plus $200,000, which is $500,000 divided by $250,000, or a fixed-charge coverage ratio of 2x. As with other commonly used debt ratios, a higher ratio value – preferably 2 or above – indicates a more financially healthy, and less risky, company or situation.
The Fixed Charge Coverage Ratio , also known as the Solvency Ratio, […]

There are also many smaller procedures that may be a part of the inventory audit workflow. Additionally, warehouses will often have damaged, obsolete or returned inventory put to the side to be processed. Before your audit, deal with those items — whether it be writing them off, writing them down, repairing or reshelving them. Planning is key prior to an inventory audit, according to Durak. Without proper preparation, companies will face a disorganized, expensive and time-consuming audit.

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Going to University means that there is an implicit cost which is the money which could have been earned during that period. Training a new employee presents an implicit cost in the fact that those seven hours could have been used doing other work. Explicit costs are all the expenses incurred as part of the normal operating costs of a business.

The difference between implicit and explicit costs is that explicit costs are clear and identifiable, whilst implicit costs purely refer to the opportu […]

The times interest earned ratio is an indicator of the company’s ability to pay interest as it comes due. It is calculated by dividing earnings before interest and taxes by interest expense. The debt to total assets ratio calculates the percent of assets provided by creditors. Another indicator of how a corporation performed is the dividend yield. It measures the return in cash dividends earned by an investor on one share of the company’s stock. It is calculated by dividing dividend […]

An effective financial reporting structure begins with a reporting company’s management, which is responsible for implementing and properly applying generally accepted accounting standards. Auditors then have the responsibility to test and opine on whether the financial statements are fairly presented in accordance with those accounting standards. If these responsibilities are not met, accounting standards, regardless of their quality, may not be properly applied, resulting in a lack of t […]