Economic Order Quantity – Formula, Example, and Explanation

Economic, Financial Accounting

In any business, production costs are the foundation of the pricing strategy, profit margins, and market positioning. The most important costs incurred in any manufacturing operation are material, labor, and factory overhead. Material is often existing as a cushion between production and consumption of the goods. In any inventory, you will find material in various […]

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The Hurdle Rate – How to Calculate the Hurdle Rate? (With Answer)

Financial Ratios

The hurdle rate is the rate of return required by investors on some particular project under consideration. It’s an excellent tool to measure the potential of the investment project. It helps decide if the project should be accepted considering expected returns to be generated from the investment proposal. Generally, the investment projects with higher risk

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Budgetary Control – Concept, Objective, Advantages, and More

Budgeting

Budgetary control is a concept of financial accounting that helps to oversee the payments and receipts within an organization. It provides a greater tool to plan, monitor, and control financial activities within an organization. The concept of budgetary control can be linked with liquidity and management of the cash flow. However, the concept of budgetary

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Expenditure Coverage Ratios – Types, Formular, And Why Are They Matter?

Financial Ratios

Any business that wants to scale and grow needs financial stability. The financial health of any business entity is very critical to determine the scaling potential. Any company struggling to meet its day-to-day expenses cannot dream of becoming one of the top 100 Fortune companies. Any investor, creditor, or banker will only invest in your

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Accounting For Construction In Progress – Explained

Financial Accounting

A construction company might come to your mind by reading the phrase “Construction In Progress.” Indeed, construction in progress accounting is mostly used by construction firms. Besides business dealing in building huge fixed assets, also use construction in progress accounting. However, any other business not falling under the categories mentioned above might also be dealing

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Provision for Income Tax – Definition, Example, and How to account for over/under-provision?

Financial Accounting

Definition Taxation is often assumed to be a cumbersome task by almost all businesses. This is primarily because of the fact that there are numerous different factors that need to be inculcated in order to ensure that tax calculation is executed in a proper manner. Income Tax is considered to be one of the most

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