Financial

Accumulated Depreciation

Accumulated Depreciation

Accumulated depreciation is an account used to tally or keep track of the amount an asset depreciates. Accumulated depreciation is the accumulation of an asset’s estimated reduction in value.

The first thing you need to know before establishing an accumulated depreciation account is the amount an asset depreciates each year. Think of depreciation expense as a fixed asset’s estimated reduction in value each year.

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What is Net Worth

What is Net Worth

 
What is net worth is important to individuals, business owners, and entrepreneurs when applying for a financing.  In fact, the term net worth is what most, if not all, bankers, financial investors, mortgage brokers, venture capitals, government lending agency, and other loans managers consider the ultimate number when determining whether a loan will be approved or declined.

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How to Finance a Business

25 Ways to Finance a Business 
 

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Complete Example of a Sensitivity Analysis

SENSITIVITY ANALYSIS EXAMPLE:

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What is a Cash Flow Statement and Components

CASH FLOW STATEMENT

The Cash Flow Statement is a tool used to show the movement or flow of cash into and out of a business. A business needs cash in order to pay rent, buy advertising, pay employees, pay for inventory, pay taxes, pay down business loans, pay for utilities, and so on. Without the necessary cash, a business will not survive.

A cashflow statement will provide an existing or a potential business with the following information;

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Introduction to Ratio Analysis

INTRODUCTION TO RATIO ANALYSIS

A general technique for analyzing a business's performance or its potential performance is known as Ratios Analysis. Ratio Analysis involves calculating ratios for a business or proposed business and comparing them to ratios of other businesses within the same industry.

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Sales Percentage Factor used for a Sensitivity Analysis

2. - SALES PERCENTAGE FACTORS

The second component of the Sensitivity Analysis is the Sales Percentage Factor.  Sales Percentage Factors indicate the sales percentage increases and decreases in which the analysis is based upon. As you can see, Resume Services' Forecasted Sensitivity Analysis uses the following sales percentage factors.

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Ratios Analysis - Comparing Ratios to the Indusrty

Part 3 - Comparing Ratios to the Industry

In Part 1, we calculated The Widget Manufacturing Company's 200Y ratios. This provided us with some information regarding the company's performance.  In Part 2, we gained a greater insight into the performance of the Widget Manufacturing Company by comparing their 200X ratios to their 200Y ratios. At the end of Part 2, we concluded the company's performance had improved during 200Y.

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The Heading of the Cash Flow Statement

1.   THE HEADING

The heading is extremely important since it communicates to the reader the name of the company, the type of statement that will follow (in this case, the statement will be the cash flow statement), and the date or range of months the statement pertains to. Below illustrates the Heading for Red Deere Electronics.

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How to Calculate Cost of Goods Sold using examples

COST OF GOODS SOLD:

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