Deferred revenue or unearned revenue is essentially the same type of income. It is the income that is received before delivering goods or services. In many cases, it comes in the form of advance payment for a large contract. Some contracts stipulate certain terms that require a proportion of the total amount to be paid […]
Deferred Revenue Vs Unearned Revenue – Are They Different? Read More »
Lockup days and days sales outstanding (DSO) figures depict the cash conversion of a business. Lockup days tell us how quickly a company turns its inventory into cash. The DSO figures show how efficiently a company collects its accounts receivable. Both figures are important efficiency and cash flow measurement metrics. Generally, the measures will depend
Lockup Days v Days Sales Outstanding (DSO) – What are the Differences? Read More »
The utilization and realization rates important performance measurement metrics of an organization. Both metrics are widely used for professional service organizations. The utilization rate is a measure of internal efficiency and the realization rate is a measure of revenue recognition of an entity. There are no set rules to define an ideal level for both
Utilization Rate Vs Realization Rate – What are the Differences? Read More »
The utilization rate is the working efficiency of an organization. It tells a company how efficiently its employees are working in terms of available working hours. Calculating the utilization rate is easy and can be used to derive the profitability of a company. Let us discuss what is utilization rate and how to calculate it.
What is Utilization Rate and How to Calculate It? Read More »
Realization rate is the ratio of your worked hours against your paid hours. It means it is the difference between the time worked on a project against the time you get paid for. It is a simple percentage term that indicates how much a company is earning against its worked hours. It can be used
What is Realization Rate and How to Calculate It? Read More »
Scrap inventory is the residue, unfinished, or damaged inventory that cannot be used under normal circumstances. All production processes produce scrap and waste material inevitably. If the costs are smaller, a company may account for these costs as overhead costs. However, if scrap costs are significant, a company would need to account for them separately.
What is Scrap Inventory and How to Account for it? Read More »
Days payable outstanding (DPO) are the days taken by a company to clear its accounts payable. It also indicates how long a company takes to convert its raw material into finished goods and utilize that cash to pay its creditors. Several factors affect the DPO figure. A company can have a high or a low
What are Days Payable Outstanding – DPO? Step by Step Calculation Read More »
The lock-up period is the timeframe during which insider traders, corporate investors, and company employees cannot sell their shares. Companies can use the lock-up period for several purposes including share price stability, employee retention, fraud prevention, and publicity. Let us discuss what is the lock-up period, how it works, and what purposes does it serve
What is a Lock-Up Period? Read More »
Businesses are run by sales. Days inventory outstanding is a measure that tells how quickly a business is turning its inventory into sales. Days inventory outstanding (DIO) is an important working capital ratio. It also shows the operating efficiency and short-term liquidity positions of a company. Let us discuss what is a DIO ratio, how
Days Inventory Outstanding – DIO: Definition, Formula, Calculation, and More Read More »
Stock appreciation rights (SARs)are one of the many stock-based compensation plans offered by employers. SARs and other stock-based plans are accounted for under ASC 718 guidelines. Let us discuss what are stock appreciation rights and their accounting treatment. What are Stock Appreciation Rights (SARs)? Stock appreciation rights (SARs) are one of the several stock-based compensation
Accounting for Stock Appreciation Rights – SARs Read More »
