Labor costs are one of the highest contributors in significantly driving up your total manufacturing costs. Thus, it makes sense for your business to cut back on this area and thus make your manufacturing lean. However, because COGS excludes…

Cash flow statements reflect a company’s balance of cash and cash equivalents at the beginning and end of the reporting period. For instance, rather than recreating a year-to-date cash flow every month, it’s easier and usually more accurate to simply…

In summary, the Single Step Income Statement offers a simple, transparent way to assess the profitability of a company, but it lacks the level of detail often required for comprehensive financial analysis. Other income, non-operating income, or other income might…

Effective financial management is critical for any company’s success and growth in today’s fast-paced corporate world. Managing financial records and bookkeeping activities, on the other hand, can be time-consuming and complex. This is not a complete list of benefits that…

This can take up a lot of time and human resources but can be tackled by adopting a comprehensive order-to-cash management system that will automate a majority of your communications. However, CEI and DSO focus on different elements and bring…

Discounted payback period will usually be greater than regular payback period. Investments with higher cash flows toward the end of their lives will have greater discounting. The discounted payback period is the number of years it takes to pay back…

Most importantly, knowing your cash runway reduces the risk of running out of cash. It gives you a better understanding of when you need to raise funds or adjust your budget to stay afloat. In other words, they’re spending $3,500…

It also shows the company’s financial position (in terms of assets, liabilities, and proprietor’s interest) at the end of the period. If a transaction or an event does not have a financial implication, it will not be recorded in the…

Maintaining a positive margin of safety is critical to profitability because it marks the point at which the company avoids losses. The margin of safety is the difference between the actual sales volume and the break-even sales volume. It shows…

When a company issues a stock dividend, it distributes additional shares of stock to existing shareholders. These shareholders do not have to pay income taxes on stock dividends when they receive them; instead, they are taxed when the investor sells…