Gross Margin Formula + Calculator

Gross profit margin shows whether a company is running an efficient operation and how profitably it can sell its products or services. Wages and related expenses might increase in regions or industries experiencing labor shortages or where labor unions are strong. If these wage increases aren’t accompanied by a corresponding rise in productivity or prices, […]

The Accounting Cycle: Reversing Entries Saylor Academy

The ability to create automatic reversing entries is a useful feature that can save time, reduce errors, and ensure accurate financial reporting. The general ledger is the central repository for financial data, including automatic reversing entries. Accounting software is a type of accounting system that automates many of the accounting processes. Beside of these transactions, […]

Acid-Test Ratio Learn How to Calculate the Acid-Test Ratio

The acid-test ratio, commonly known as the quick ratio, uses data from a firm’s balance sheet to indicate whether it has the means to cover its short-term liabilities. Generally, a ratio of 1.0 or more indicates a company can pay its short-term obligations, while a ratio of less than 1.0 indicates it might struggle to […]

Book Value: Definition, Meaning, Formula, and Examples

Because it is a technology company, a major portion of the company’s value is rooted in the ideas for, and rights to create, the apps it markets. Over 1.8 million professionals use CFI to learn accounting, financial analysis, modeling and more. Start with a free account to explore 20+ always-free courses and hundreds of finance […]

Financial Projections Template

The higher your BEP, the more seed money you’ll need or the longer it will be until operations are self-sufficient. In addition to the hard numbers available, you should apply your industry expertise to consider new opportunities for your business to grow. If you’re entering Series C, you should anticipate the extra investments and big […]

Bad Debt and Bad Debt Expense: Overview & Calculation Method

If a customer’s accounts receivable is identified as uncollectible, it is written off by deducting the amount from Accounts Receivable. After trying to collect this receivable for an extended period of time and getting no response  (not even an expressed refusal to pay), the customer’s AR account becomes uncollectible. If you have $50,000 of credit […]