Category Archives: Bookkeeping

Why Do Bond Prices Go Down When Interest Rates Rise?

In general, it is better to buy bonds when interest rates are high if your objective is to maximize returns. When interest rates are high, the yield on a bond is higher, so your investment return will be higher compared to when rates are low. Bonds compete against each other on the interest income they […]

Accrual Accounting Entrepreneur Small Business Encyclopedia

Running a business isn’t always as simple as trading your product or service for cash up-front. When managing large orders and long projects, you may not see a payment right away. While you earn revenue after selling a product or service, payment delays lead to accrued revenues. It is fully accredited by the New England […]

What is working capital? Formula, ratio and examples

One is that the inventory component can be hard to liquidate, especially if it contains a large proportion of old inventory. The other concern is that it may be impossible to collect old accounts receivable, which might really be bad debts. To mitigate these issues, a more accurate working capital formula is to strip old […]

The Definition of Net Credit Sales on a Balance Sheet Chron com

The accounts receivable turnover ratio is an efficiency ratio and is an indicator of a company’s financial and operational performance. A high ratio is desirable, as it indicates that the company’s collection of accounts receivable is frequent and efficient. A high accounts receivable turnover also indicates that the company enjoys a high-quality customer base that […]

Receivables Turnover Ratio Defined: Formula, Importance, Examples, Limitations

The figure for average accounts receivable is used as part of a bigger calculation, to see how efficiently a business is managing to collect what it is owed. Given the vital importance of staying on top of managing credit, average accounts receivable is a key figure. Once you have calculated your average collection period, you […]

Days Sales Outstanding DSO: Meaning in Finance, Calculation, and Applications

Days sales outstanding can vary from month to month, and over the course of a year with a company’s seasonal business cycle. Of interest when analyzing the performance of a company is the trend in DSO. If DSO is getting longer, accounts receivable is increasing or average sales per day are decreasing. Similarly, a decrease […]

CFO vs CAO: Understanding the Key Differences

Life as an accountant isn’t particularly glamorous, but few career paths match its combination of solid pay, low stress, job security, and opportunity for advancement. Few accountants ever worry about burning out or feel compelled to switch industries, and many will move into positions of prominence and importance in an organization. One such position is […]

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