Non-current assets include non-current investments and long-term receivables. A positive ratio indicates the company pays its short-term obligations after liquidating current assets. A negative ratio means current liabilities exceed current assets and indicates financial distress. Yes, a current ratio of 2 is typically considered a good level of liquidity. Which of these is most important […]

Based on the vendor, this truck expects to work financial terms glossary for 5,000 hours. If the net realizable value of the inventory is less than the actual cost of the inventory, it is often necessary to reduce the inventory amount. A balance on the right side (credit side) of an account in the general […]

The first is that it is relatively easy to calculate (at least, compared to other methods such as internal rate of return). ARR allows for straightforward comparison between different investment opportunities. By comparing the ARR of various projects, businesses can quickly identify the most profitable investments. What is the Accounting Rate of Return? One of […]

On average, it takes the company 97 days to purchase raw material, turn the inventory into marketable products, and sell it to customers. For instance, the duration of a particular company could be high relative to comparable peers. Such an issue could stem from the inefficient collection of credit purchases, rather than due to supply […]

Because you only record the money going in and out of your business account, you have more control over your tax liability. If you send an invoice of $2,000 to a bookkeeping for cleaning business client in November and they pay you in January of next year, you won’t pay tax for that transaction until […]