Accounting error What is an Accounting Error? An error is a non-fraudulant act that is generally accepted as a mistake in the accounting record. Accounting errors are unintentional and should be spotted and solved immediately. Errors should not be c…
What is 2/10 Net 30? It's a term that tells that the person will get a 2% discount if they made a payment within 10 days. 2/10 net 30 is often used as a tread credit term if the customer pays the money within this period he/she will get a 2% dis…
The account receivable turnover ratio is gonna tell you how many times in a given year or quarter whatever the period is that a company collects its average account receivable balance. To calculate this here's the formula, you're basically g…
The asset turnover is a ratio and we use it to tell how good a company is at generating sales revenue given the number of assets that the company has. So we calculate the asset turnover ratio by taking the company's net sales revenue and dividi…
In this article, I'm going to show you how to calculate a company's cash ratio. So in previous articles , we've talked about ratios such as the current ratio. We take a company's current assets and divided them by current liabilitie…
In this article, I'm gonna show you how to calculate times interest earned which is also known as the interest coverage ratio. Let's say a company had earnings before interest in taxes (EBIT) of $500 and they had interest expense of $100 …
In this article, we're going to talk about the debt-to-equity ratio. For starters, the debt to equity ratio is considered what we call a leverage ratio and the reason it's considered to be a leverage ratio is that it measures the degree t…
In this article, I'm going to show you how to calculate a company's debt ratio. So the debt ratio is usually calculated by taking a company's total liabilities and dividing them by the total assets . In other words, how highly leverage…
In our previous article, we talked about how the current ratio could be a really good measure of a firm's short-term liquidity and by that, we meant that we basically taking the firm's current assets and dividing those by current liabilitie…
The current ratio as the name suggests has a look at a business's current assets versus the value of its current liabilities the reason why it's called a liquidity ratio is that this ratio is going to examine a business's ability…
