To understand a company’s valuation, there are different ways to analyze it. One of the most popular methods is the Enterprise Value (EV). Enterprise Value is very useful for investors to compare the size of different companies. It also makes it easier for enterprises to identify the value of acquisitions. …

The accounting for nonprofit organizations (NPOs) differs from other entities. Accounting standards require these entities to use a different format when reporting their expenses. On top of that, these standards require them to present those expenses in a specific financial statement. NPOs prepare the statement of activity, where they must …

Variance analysis is a technique used in managerial accounting. It allows companies to calculate the difference between expected and actual figures. Consequently, they can investigate how those variances occurred. Variance analysis can apply to various areas if a company has a budget. One of these includes sales and revenues. Among …

Accounts Expenses are an important part of accounting and can be defined as the costs that are not related to production. These expenses include items such as rent, utilities, insurance premiums, payroll taxes, or contributions to pension plans. Accounts expenses are also one of three classifications of assets on a …

The accounting for debt instruments involves various stages. Initially, it begins when a company obtains debt from multiple sources. When holding that debt, the company will perform several accounting treatments. The final stage during this process is the extinguishment of debt. This process may give rise to gains or losses. …

The accounting process for companies and other entities may differ. One of these entities includes government organizations. Usually, companies in the US follow accounting standards issued by the Financial Accounting Standards Board (FASB). For government bodies, they come from the Governmental Accounting Standards Board (GASB). GASB standards guide entities on …

To understand how important a company’s inventory is, many investors will look at the company’s inventory turnover ratio. It is an important factor for every business that deals with inventory. It gives an idea of how well the business can sell its inventory in a given time frame. A high …

Companies pay taxes due to their operations. Usually, these taxes fall under the corporation and other taxes. However, income taxes may also apply to individuals and businesses. These entities must calculate the taxes they must pay annually under the tax law. For entities that prepare financial statements, creating a provision …

Trade receivables or accounts receivables are prevalent balance sheet items for most companies. These include any amounts owed from customers. Usually, trade receivables refer to money due from customers for goods and services delivered or used. These accounts are prevalent for companies that provide credit sales facilities. In some cases, …

When manufacturing a product, companies incur various expenses. These expenses are crucial in helping companies produce that product. Similarly, they contribute to the cost of that product. Based on that cost, companies can decide the pricing and other factors. Companies may also classify those costs for several reasons. One such …