Dunning Letter – communication with customers to ensure the collection of account receivable. The department must have supporting documentation for each individual account to be written-off available for review. Accounts receivable are eligible for w... Read more
Once you’ve got that number, divide your net sales for the year by your working capital for that same year. The resulting number is your working capital turnover ratio, an indication of how many times per year you deploy that amount of working ... Read more
I hope we all can use these lessons about working capital to make better future free cash flow growth projections and intrinsic value estimates. These are usually defined as assets that are cash or will be turned into cash in a year or less and liabi... Read more
WIP refers to the raw materials, labor, and overhead costs incurred for products that are at various stages of the production process. WIP is a component of the inventory asset account on the balance sheet. These costs are subsequently transferred to... Read more
They could trade above or below their par value while bond traders attempt to make money trading these yet-to-mature bonds. As a result, the Apple bond pays a higher interest rate than the 10-year Treasury yield. Also, with the added yield, the bond ... Read more
Here again, no matter which situation is causing the reduction in the inventory to sales ratio, either one suggests that you are effectively managing your business's inventory levels and its cash flow. Inventory turnover also reflects the carrying co... Read more
Typically, permanent accounts have no ending period unless you close or sell your business or reorganize your accounts. All income statement balances are eventually transferred to retained earnings. In accounting, a permanent account refers to a gene... Read more
It indicates that the company is in good financial health and is less likely to face financial hardships. Notice that the cash ratio is much smaller than the other two ratios. In analyzing the cash ratio, any ratio greater than 0.5 is considered good... Read more
A closed iron tank 12 m long 9 m wide and 4 m deep is to be made . Determine the cost of iron sheet used at the rate of rs 5 per meter , sheet being 2 m wide. A closed account is any account that has been closed out or otherwise terminated, either by... Read more
As a company’s assets grow, its liabilities and/or equity also tends to grow in order for its financial position to stay in balance. How assets are supported, or financed, by a corresponding growth in payables, debt liabilities, and equity reve... Read more
