Gross Profit Margin: Definition, Formula and Analysis
On the other hand, Gross Profit Ratio can provide insights into the overall profitability of a company relative to its revenue. By analyzing both metrics together, stakeholders can gain a…
How Do You Calculate a Company’s Equity?
Company equity is an essential metric when determining the return being generated versus the total amount invested by equity investors. If a balance sheet is not available, another option is to summarize…
Discounted Cash Flow DCF Model: Definition, Formula, & Training
We have now completed the 6 steps to building a DCF model and have calculated the equity value of Apple. Hundreds of assumptions go into building a DCF model—it’s hard…
Cash Flow Statement: Definition, Example, & Methods
It helps identify the availability of liquid funds with the organization in a particular accounting period. Thus, it accounts for a company's financial standing and reveals the corporate efficiency in…
Consignment account definition, explanation, format, example
For the consignee, proper accounting ensures that consigned goods aren’t mixed with other goods. For the consignor, it helps them account for the cost of goods sold and revenue. In…
LIFO Liquidation Definition, Example Effect on the Financial Statements
However, using LIFO Liquidation when there is no other better option can save the business from unnecessary hassles. However, a company can benefit from LIFO Liquidation when the market demand…
What Does ‚MM‘ Mean in Accounting?
But in internal communications and external business dealings, “MM” has become a de facto standard that seasoned professionals recognize instantly. It may seem obscure to outsiders at first, but the…
What Is Tax Accounting and How Does It Differ From Financial Accounting?
At DeVry, our online Bachelor’s Degree in Accounting is designed with a robust curriculum of core business courses. This gives you a strong foundation in accounting and economics, and a…
Gross Profit vs Net Profit: Understanding the Key Differences
For example, if a company has a gross income of $1,000,000 and a tax liability of $210,000, the net of tax income is $790,000. This figure reflects the true earnings…
FIFO Method Formula: Accounting Explained
For some companies, there are benefits to using the LIFO method for inventory costing. For example, those companies that sell goods that frequently increase in price might use LIFO to…
