The reduced income resulted in a higher operating leverage, meaning a higher level of risk. An investor may apply the margin of safety to determine the company’s share price with its current market price and use the variance as a basis for buying securities. It means that there is remarkable upward potential for the stock… Continuar lendo Margin Of Safety What Is It, Formula, Example, How to Calculate?

We had a beginning inventory of $50,000 which was shown on last year’s balance sheet. And during the year, we have made a total of $200,000 in purchases. Likewise, we can calculate the cost of goods sold with the formula of the beginning inventory plus purchases minus the ending inventory. Cash Flow vs Revenue: Which… Continuar lendo Perpetual inventory system explanation, journal entries, example

First, revenue refers to the total amount of money generated by a company. It is a key indicator of a company’s ability to generate sales and it’s reported before deducting any expenses. Shareholders, analysts and potential investors use the statement to assess a company’s profitability and dividend payout potential. However, company owners can use them… Continuar lendo Retained Earnings in Accounting and What They Can Tell You