Forecast demand, set low stock alerts, create purchase orders, know which items are selling or sitting on shelves, count inventory, and more. WAC can help retailers understand how much each item in their inventory costs to purchase (or produce) with... Read more
This will increase subjectivity and reduce the consistency and reliability of the financial statements. It will also be highly inconvenient for those companies that prepare their financial statements more frequently such as monthly. It is a conserva... Read more
For example, if a manufacturing company has to use more machine hours in March vs February, then its budget should logically increase in March. Conversely, if it uses them for few hours, its budget should reflect that decline. Therefore, most compan... Read more
Quite apart from their potential for creating value, share buybacks can also offer companies a shareholder-friendly way to distribute cash. That’s because, in the United States at least, many investors are taxed more highly on cash dividends t... Read more
While high inventory turnover can mean high sales volumes, it can also mean that you're not keeping enough inventory in stock to meet demand. Inventory is one of the most important aspects a business should track. Today, you can use software to trac... Read more
An accounting degree requires deep education and training in tax and other laws with which businesses need to comply, plus finance and business management. While some bookkeepers may have developed similar skills, that level of training isn’t... Read more
The cash ratio is the strictest measure of a company's liquidity because it only accounts for cash and cash equivalents in the numerator. Below is a video explanation of how to calculate the current ratio and why it matters when performing an analys... Read more
Dilutive securities are financial products that cause a company to issue new shares. They can cause share prices and earnings per share to decline, creating some resistance among existing shareholders. Among the many types of dilutive securities are... Read more
Assets and liabilities valued at historical cost (market cost) are translated at the historical (current market) rate. A method of cash budgeting that is organized along the lines of the statement of cash flows. Accounting for an acquisition using... Read more
The estimation is typically based on credit sales only, not total sales (which include cash sales). In this example, assume that any credit card sales that are uncollectible are the responsibility of the credit card company. It may be obvious intuit... Read more
