Financial Statements

What Causes Inventory Turnover Ratio To Increase Or Decrease?

The financial statements of any business entity give insights into any business entity’s financial health and performance. However, a business entity might need to perform further analysis to deeply evaluate the financial results. Therefore, companies perform different financial analyses. The popular type of analysis is sensitivity analysis, vertical & horizontal analysis, ratio analysis, growth rates, …

What Causes Inventory Turnover Ratio To Increase Or Decrease? Read More »

Valuation of Intangible Assets: What Are The Top Methods?

Assets are resources owned or controlled by a company. These resources also come with a future inflow of economic benefits. Usually, these include items such as property, plant, equipment, patents, inventory, etc. Companies use these items to conduct business and generate profits. Every company needs assets to survive and stay active within its specific industry. …

Valuation of Intangible Assets: What Are The Top Methods? Read More »

What is a Variable Costing Income Statement? Definition and Example

Companies use various costing techniques to determine the cost of a specific product. This process is crucial in establishing the expenses borne by a company to produce that product. Consequently, companies can use the information to set the price for that product. It is crucial in determining the profits the company expects to make and …

What is a Variable Costing Income Statement? Definition and Example Read More »

Understanding Current Tax Liabilities In Balance Sheet: Classification, Recognition, Measurement, And More

 The financial statements of a company tell about different aspects of the business. Financial health, future growth prospects, underlying problems, expenses, revenues, liabilities, and assets are shown in income statements and balance sheets. Income taxes and sales taxes are critical elements of a company’s financial calculations, valuation, and operations. Income taxes are payments a business …

Understanding Current Tax Liabilities In Balance Sheet: Classification, Recognition, Measurement, And More Read More »

What is the Difference Between Current Assets and Current Liabilities?

The balance sheet is a financial statement that reports various account balances. Companies may combine several items under a single name or report them separately. Nonetheless, they accumulate those accounts to offer a financial picture of operations. The balance sheet is the only financial statement that presents those balances. Similarly, it does not report the …

What is the Difference Between Current Assets and Current Liabilities? Read More »

What Is a Compilation of Financial Statements?

Accounting is a process within companies to identify, analyze, summarize, record, and present financial transactions. This process involves an accountant obtaining data from various business transactions. Once they have the required data, they can start inputting it into a company’s financial systems. Most modern accounting systems process the data and prepare the result automatically. Accounting …

What Is a Compilation of Financial Statements? Read More »

How Does the Current Portion of Long-term Debt Affect Cash Flow Statement?

Companies obtain finance from various sources. Usually, this finance comes from equity holders, which constitutes equity finance. This finance is perpetual and can be crucial in helping companies start their operations as startups. However, as companies progress, they have more options available in meeting their financing needs. The other finance source that companies can choose …

How Does the Current Portion of Long-term Debt Affect Cash Flow Statement? Read More »

How to Treat Capital Reserve in Cash Flow Statement?

Using and understanding financial statements are crucial for investors. These statements provide insights into a company’s operations and activities. Usually, companies report these operations through four financial statements. These include the balance sheet, income statement, cash flow statement and statement of changes in equity. Each of these plays a significant role in helping investors analyze …

How to Treat Capital Reserve in Cash Flow Statement? Read More »

Does Prepaid Rent Go On Cash Flow Statement?

Companies incur expenses to help in generating revenues. These revenues can allow companies to make profits. If companies don’t spend, they cannot make sales. Therefore, expenses are crucial in helping companies operate and continue their activities. Some may view these spendings as unnecessary. However, they support the revenues that companies generate through their operations. Companies …

Does Prepaid Rent Go On Cash Flow Statement? Read More »

What is the Treatment of Provision in Cash Flow Statement?

Managing cash and cash equivalent resources is crucial for companies to stay liquid. This liquidity also brings many benefits, such as quicker transactions, more flexibility, better opportunities, etc. Similarly, most investors prefer investments that can illustrate better cash management. These investors obtain information about how companies manage their operations through financial statements. For most companies, …

What is the Treatment of Provision in Cash Flow Statement? Read More »