A security or bond that pays dividends or returns ad infinitum is perpetuity. In the business world, the term helps businesses know their market value and acts as a guide for stakeholders and investors to assess investment opportunities on the fly. Over time, perpetuities have faded from the limelight, and less than a handful of…
Accrual-based accounting is the go-to method for public and private businesses as it is simple. However, tracking finances this way is easier said than done, as expenses or revenues don’t always match payments and earnings. That’s why every business needs to know what is deferral in accounting and how to use it right. This blog…
Small and medium businesses long for ways to win a competitive edge and beat the market. Economies of scale enable them to do the same and help them target a mark at which mass production turns profitable. However, to use economies of scale for your benefit, you must first know how to calculate marginal costs….
You cannot overstate how vital cash disbursements journal is for small and medium-sized businesses. This journal records the cash payments made through a check, e-check, or Automated Clearing House (ACH). More so, anything that deducts from your business debit account then and there goes into it. That’s why these journals are also called cash payments…
Business success relies upon the business owner’s ability to survive testing times and cope with rising costs. Inflation has led to the downfall of many firms and continues to derail more from the winning track. The year 2022 was the most inflated in recent times, with the average inflation rate in the USA rising to…
Being a small business owner, it is extremely important to compile and report your financial data accurately. When you have complete clarity about your finances, you can check out the insights of the business and also determine the areas which require improvement. You might have heard about trailing twelve months or TTM. TTM or trailing…
It is extremely vital for a business to have a clear understanding of the company’s accounting liquidity. In order to achieve that, you need to explore liquidity ratios. The question arises what is a good liquidity ratio, and more importantly, what does a good liquidity ratio aim for? Let’s dig in to find out all…
Accounting software are gaining popularity rapidly, especially among small and large enterprises. However, there are a lot of accounts that are unfamiliar to business owners; one such account is opening balance equity. This account is not found in traditional bookkeeping, regardless of whether it’s done on paper or on any other platform like Excel. Opening-balance…
“Startups don’t fail because they lack a product; they fail because they lack customers and a profitable business model.” -Steve Blank Profitability models matter regardless of the size of a business. These models illustrate how you plan to upscale your business and your goals to make the business profitable. You might be familiar with revenue…
It is not easy to manufacture something, and definitely not cheap. There are so many costs that go behind the manufacturing of a product that it becomes very hard to keep track. All of these costs are known as manufacturing overheads. Let’s look in detail at what manufacturing overhead is, its formula, and how to…
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