A company’s working capital and cash flow can tell you a lot about a business. The working capital turnover ratio measures how efficient a company is using its working capital in relation to a given level of sales which tells a lot about a company’s financial situation at the end of the period. In other …
What is the Statement of Cash Flows Direct Method? Cash flow refers to the amount of cash flowing in and the amount of cash flowing out of a business. These financing activities are reported on financial statements known as income statements. There are two methods that are used to report cash flow. They are the …
What is the Statement of Cash Flows Direct Method? | Formula & Example Read More »
When a company sells products and services, it may do so by extending credit to its clients. When a company produces products or services for customers and issues invoices for payment of those products or services, it is reasonable to assume that many of those invoices will not be paid. As a result, an accounts receivable …
Bad Debt Expense: What is it and How to Calculate Read More »
Lesson 1 in the Basic Accounting series: Understanding basic accounting concepts is a must for every small business owner. Even if you have an accountant that takes care of that “accounting stuff”, you need to know business accounting basics such as debits and credits and some accounting terminology. Accounting is setting up a system of …
Lesson 2 in the Basic Accounting series: With a double entry bookkeeping system every one of your small business transactions will be recorded into at least two of the accounts in your accounting system. Is double entry accounting right for your small business or will another accounting system work better? Single Entry vs Double Entry …