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 […]
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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
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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
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Penetration pricing and price skimming are two contrasting pricing strategies. Both strategies come with different objectives. Let us discuss what are penetration and skim pricing strategies and their key differences. What is Penetration Pricing? Penetration pricing is a pricing strategy where the seller sets low prices initially. It aims to attract more customers and quickly
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Internal and external sources of financing help businesses fulfill their capital requirements. Both types of financing offer discrete benefits and some limitations to the business. Let us discuss what are external and internal sources of financing and their key differences. What are Internal Sources of Financing? Internal sources of financing are the financial sources of
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Horizontal and vertical integration are two major corporate strategies. Both strategies offer different types of business growth and expansion opportunities to the parties involved. Let us discuss what are horizontal and vertical integration strategies and their key differences. What is Horizontal Integration? Horizontal integration refers to a scenario when two or more entities in the
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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
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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
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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
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General and special journals are primary bookkeeping documents of a business. Both these documents are used by businesses for similar purposes. A general journal is used more commonly by businesses either with a manual or digitized bookkeeping system. A special journal is created for specific accounts by some businesses when they require detailed records. Let
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