• Accounting ,
• 31 Aug

Absorption Costing is helpful in calculating the value of inventory on the Balance Sheet and determing the selling price of products. We also call this Full Costing. There are two big differences between this and Variable Costing. One is that we add in fixed costs to derive the total cost per unit. The other is

• Accounting , Finance ,
• 17 Aug

Variable Costing is used in internal Managerial Accounting, Cost Accounting and Finance to help make decisions. It is a part of calculating the Contribution Margin and Break-Even Analysis.  It is similar to absorption costing except that we leave out fixed manufacturing overhead. GAAP and IFRS do not allow Variable Costing in external reporting. The main

• Accounting , Economics , Finance ,
• 09 Aug

Calculating Foreign Exchange gains and losses is important for companies that do business internationally. We won’t get into complicated Forex trading but look at how exchange rates changing over time can affect your accounts receivable and accounts payable. We’ll also define basis points and work them into our discussion. Why do we have gains or

• Accounting , Finance , Metrics and Ratios ,
• 13 Jul

Contribution margin in it’s simplest form is total sales minus total variable costs but it can also be expressed as a ratio. This margin is what is left over to pay fixed costs and for capital. This is different than Gross Margin in that GM uses COGS instead of variable costs. COGS does not equal

• Accounting , Corporate Strategy , Finance , Higher Level Management , Metrics and Ratios ,
• 26 Dec

Cash Conversion Cycle is really important for manufacturing companies. It tells us how many days it takes to go from investments in inventory and sales processes to cash flows. Another name for this is the Net Operating Cycle or Cash Cycle.  A low CCC could mean that the company is managing it’s operations well. I

• Accounting , Finance , Metrics and Ratios ,
• 20 Nov

Gross Margin is a helpful Profitability metric. It tells us what the profit is for every dollar of revenue. It is also useful as the basis of other formulas. We also refer to this as gross profit percentage as the gross margin ratio.         Gross Margin     where Gross Margin Revenue

• Accounting , Finance ,
• 25 Aug

Price to Sales Ratio is  valuation metric. It can be helpful for valuating new companies that are not yet profitable. It is a basic formula you can use when no earnings are available to base valuation on. A lower number Price to Sales Ratio can often mean a good value, but it can also signal

• Accounting , Higher Level Management , Regulatory ,
• 24 Feb

GDPR, The General Data Protection Regulation was approved by the EU Parliament on April 14th, 2016 and goes into effect May 25th, 2018. This regulation is intended to strengthen and unify data protection for individuals within the European Union. While this article doesn’t cover every minute detail, this is a good overview for understanding the

• Accounting , Tips and Tricks ,
• 01 Dec

Many Accounting Software systems use  built-in tax routines  for calculating payroll tax deductions but are they correct? Depending on what Country you live in, there are different online calculators you can use to double check accuracy. You want to make sure that your system, staff member, or dept is calculating incorrectly right? Unites States Withholding

• Accounting , Tips and Tricks ,
• 11 Oct

How many hours are worked in a single year? You found the right place if you are trying to determine how many hours an employee works in a year. If an employee get’s paid X amount a year, what is the hourly rate? Well typically you divide the total year salary by 2087. If they