When it comes to manufacturing, different types of approaches can take place. One popular approach is vertical integration – this involves the company controlling different aspects of the production process, from raw materials to the finished product. Through this approach, a company can more closely manage its operations and costs. …

When it comes to measuring profits and losses from a project or investment, the benefit-cost ratio (BCR) is an important metric. The BCR looks at how much value a project produces relative to the cost of the project. This ratio can be used to determine if a potential project should …

Companies use various techniques to determine the cost of a product. It is crucial in managerial accounting as it allows for better decision-making regarding costs and profitability. Companies may use product costing to determine those costs. What is Product Costing? Product costing is a process to determine the total cost …

Distribution networks are an essential aspect of any business that involves the sale and transportation of goods. Without a proper distribution network, it can be difficult to transport products from the supplier to the customer. These networks provide a way for businesses to efficiently deliver goods and services, while also …

One of the crucial sources of cash inflows for a company is its sales. However, some companies offer credit, which can postpone those cash flows. Companies must manage these balances effectively to operate efficiently. They can use accounts receivable days to determine how long it takes them to recover debt …

When investing or working for a company, one of the first things people should know is whether it’s a private or public company. Both types of companies have pros and cons, which can impact shareholders, employees, and customers. By understanding how both companies work, it will be easier to make …

Inventory represents goods and products that companies produce or sell. It is crucial in some industries, for example, manufacturing and retail. Therefore, it is vital to employ controls to ensure the safety of these goods. Companies can use several tools at their disposal to achieve that. Usually, these fall under …

Uncertainty is a part of any business. Sometimes, however, they may come with accounting implications if they have a monetary impact. Accounting standards dictate how companies deal with uncertain situations. The accounting for these instances may fall under contingencies. What are Contingencies in Accounting? Contingencies in accounting refer to uncertain …

When it comes to understanding a company’s financial health, there are a few ways to do so. One of the most common and vastly used methods is to look at solvency. This is a measure of whether or not a business has enough assets to pay its liabilities, without relying …

Tax is a financial obligation that a taxpayer pays to a government. For companies, it represents an expense deducted from revenues to reach net earnings. However, stakeholders may consider pretax income to determine a company’s performance accurately. Before discussing how to calculate it, it is crucial to define this income. …