Understanding the Income Statement The income statement is one of the basic financial statements that disclose the financial performance of a company. Profit and loss statement (P&L), statement of income, and statement of earnings are other names for the income…
Read MoreAccrual Accounting Vs. Cash
Cash vs Accrual Accounting You have finally taken the leap and started the business you have always dreamt about. However, now you must make one more tough decision: what accounting method should your business follow: cash or accrual accounting? Accounting…
Read MoreIncome Statement: The Importance
The Importance of the Income Statement There are four basic financial statements: Balance Sheet, Cash Flow Statement, Income Statement and Statement of Retained Earnings. External users such as investors, creditors, etc. use these statements to gain insight into the financial…
Read MoreNew Revenue Recognition Standards
New Revenue Recognition Standards Are Now REAL For nonpublic companies, the new revenue recognition standards that the Financial Accounting Standards Board (FASB) implemented are now a reality. FASB 606, Revenue from Contracts with Customers, is effective for fiscal years beginning…
Read MoreEfficiency Ratios #2
In this blog, I will be discussing efficiency ratios. Efficiency ratios are used internally to check if the company is utilizing their assets and liabilities efficiently in earning revenues. Efficiency ratios are mainly used to assess how well assets and…
Read MoreFinancial Ratios #1 (3-part series)
Financial data by itself may not give the complete picture about a company’s performance and financial wellbeing. It is difficult to evaluate standalone numbers without comparing them to certain norms and standards. Ratios provide a set of standardized parameters which…
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