Companies use various financial tools to forecast information. This information helps anticipate future outcomes, enabling informed decision-making, strategic planning, and efficient resource allocation based on anticipated business conditions. One of these tools is the three-statement model. What is the 3 Statement Model? The three-statement model is a core financial modeling …

When it comes to loans and mortgages, a change in interest rates is not a very uncommon thing. This can happen due to several reasons such as economic factors, market trends, and policies of lending institutions. When this happens, the interest rate of your loan may also change. Blended rate …

Depreciation refers to the reduction in an asset’s value over its life. In accounting, it is crucial to identify whether a company can depreciate a specific asset. Therefore, companies know what a depreciable asset is. What is a Depreciable Asset? A depreciable asset is a long-term tangible asset that experiences …

It’s a very unfortunate event when businesses have to come to an end. Many reasons can lead a business to shut down, such as financial struggles, market saturation, or even natural disasters. Whatever the reason may be, business owners need to understand when it’s time to close their doors and …

One of the most crucial measures of success for a company includes its ability to generate money. In accounting, the term used to describe it is sales turnover. What is Sales Turnover? Sales turnover (also known as turnover or sales revenue) is the total amount of money a company generates …

When it comes to business deals and job offers, it is considered unethical to back out or renege on a contract after agreeing to its terms. This can not only damage businesses’ reputations but also have legal consequences. However, there are certain circumstances where reneging may be necessary or even …

Companies prepare different budgets to forecast future events. These plans can relate to various areas of the business. One of the most crucial ones among these is the sales budget. What is a Sales Budget? A sales budget is a strategic financial plan outlining an organization’s anticipated sales revenue for …

Understanding the inner workings of business finances is crucial for entrepreneurs and managers alike. The Cash Conversion Cycle is one key aspect that often gets overlooked, yet holds huge value. Its importance cannot be overstated, as it provides vital insights into how efficiently a company manages its working capital. In …

Before a company issues its financial statements, it goes through several stages. After preparing these statements, companies must evaluate all events occurring after it that may indicate changes to those figures. These are a part of subsequent events. What are Subsequent Events? Subsequent events in accounting pertain to occurrences or …

Marginal benefit (or marginal utility) is a critical concept in economics and business. It represents the maximum amount a consumer is prepared to pay for an additional unit of a good or service. It’s a very important concept when making decisions about how much of a product or service to …