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Welcome to our blog! Here, you can find the useful articles related to accounting, audit, finance and tax.
The Current Ratio: Formula, Example, Calculation, And More
Overview The current ratio is the measure of the short-term liquidity of a company. It shows the ability of a company to meet its short-term liability through its current assets. It is important to understand the current ratio, how it works, and what information it...
Operating Performance Ratios Analysis (Definition | Using | Formula | Example | Explanation)
Overview Operating performance refers to evaluating a company’s ability to utilize its resources efficiently. It can be measured in terms of assets and equity sources. The focus of operating performance analysis is to analyze the efficient use of resources to generate...
Inventories Costing: Method, Example And More
Overview Inventory costing is an integral part of inventory control and inventory management. It helps a business determine its cost of goods sold and eventually in gross profits. Different inventory costing methods can bring the different cost of goods sold results....
How to Records Journal Entry of Account Payable?(Definition and Examples)
Overview Accounts Payable (AP) refers to the short-term debt obligations of a business. It is one type of trade credit that businesses use to manage their cash flows. Managing accounts payable effectively can boost a business’s credit. It can help reduce reliance on...
What Is Financial Leverage? Definition, Explanation, Example, And More
Modigliani, Miller, David Durand, and many other financial scientists focused their areas of interest on the firms’ capital structure. From small enterprises to partnerships and multinational organizations, the capital structure of different companies within the same...
What Is Sales Tax And How To Calculate It?
Businesses earn income by business operations, and individuals earn income by doing jobs. Similarly, taxes are the main source of income for government bodies. Public services, legislature, establishment, and all government services available to citizens are funded by...
How Does Invoice Factoring Work? 7 Steps Process
What else do other businesses do for working capital needs? And most importantly, if you’ve commercial or government institutional clients having long terms of credits, you might have to think about your short-term financing needs! Small and medium business...
How To Factoring Your Company’s Accounts Receivable? Step by Step
There are many business events and scenarios when the company is in dire need of financing. One option is to go for a bank loan or issue public debt. But can these methods be a good option for quick financing? Oh, maybe then you should go for a ‘line of credit.’ But,...
Perpetual Vs. Periodic Inventory System – Key Differences
The perpetual inventory system is the process of keeping inventory records in real-time. The company updates its inventory account as and when it makes new inventory purchases. On the other hand, the periodic system first adds the inventory in the purchases accounts,...
