This Accounting category will cover various topics on accounting ranging from financial, management, and advance accounting.
The economic value added (EVA) is the value added by an entity by utilizing its capital resources. Unlike profitability, it considers both debt and equity sources of capital. Let us discuss what is EVA, its important components, and how it is calculated. What is Economic Value Added (EVA)? The economic value added (EVA) is the …
What is Economic Value Added (EVA) and How to Calculate It? Read More »
Net operating profit after tax (NOPAT) is an important profitability and efficiency metric. It tells us about the operational efficiency of a business. NOPAT can be used to analyze the impact of debt financing (leverage) on the profits of a business. Thus, it is a core measure of the profits generated through the operations of …
What is Net Operating Profit After Tax (NOPAT) and How to Calculate it? Read More »
Interim dividends and final dividends are two common types of dividends issued by most companies. Established companies follow a consistent dividend policy to offer income to dividend investors. Both types of dividends offer some advantages and disadvantages to the issuers. Let us discuss what are interim and final dividends and their key differences. What is …
Interim Dividend Vs Final Dividend – Key Differences (Including Pros and Cons) Read More »
Simple average and weighted average are two widely used methods of allocating averages of data sets. Both methods are useful with some pros and cons for each. Let us discuss what are these methods and their key differences. What is a Simple Average? A simple average refers to a number that is derived by adding …
Simple Average Vs Weighted Average – Key Differences Read More »
A special journal is a bookkeeping record that keeps a record of special accounts of a business. It is created for bookkeeping accounts that require special records and details to be recorded. A special journal can be customized and formatted according to the needs of a business. It is followed by businesses with manual bookkeeping …
A cash receipt journal is a source document that records all cash inflows of a business. It is an important part of the cash book. Businesses can record details of cash receipt transactions that are otherwise omitted from the general ledger. Let us discuss what is cash receipt journal, how it is constructed, and its …
A 10-column worksheet presents an overview of the account books of a company at the end of an accounting period. It can be prepared for any accounting period like any other financial statement. A 10-column worksheet serves many purposes for a business. It can also be used to prepare financial statements and extract valuable financial …
A cash disbursement journal is a primary source document that records cash payments of a business. It helps a business keep an eye on its cash outflows. A cash payment or disbursement journal complements a cash receipt journal where they become part of the cash book. Let us discuss what is a cash disbursement journal, …
Contribution margin and operating margins are both profitability measures. However, both these metrics provide different types of information to the business. Both these terms have certain similarities and some key differences. Let us discuss these concepts briefly. What is Contribution Margin? The contribution margin is total sales minus variable costs for a company. It can …
Contribution Margin Vs Operating Margin: What Are the Differences? Read More »
Common stocks and treasury stocks are important components of the equity of a company. Although both represent equity, they work in contrasting ways. Let us discuss what are common stocks and treasury stocks and their key differences. What is Common Stock? Common stock or a common share refers to a type of security that represents …
Common Stock Vs Treasury Stock: What Are the Differences? Read More »
