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It focuses on the sales of individual products and how much each one contributes to covering the company’s fixed costs (like rent) and then making profit. This number is super important because it helps businesses decide which products are worth selling more of and which might be losing money. It considers the sales revenue of…

In fact, the very oldest inventory of books may stay in inventory forever and never be circulated. This is a common problem with the LIFO method once a business starts using it, in that the older inventory never gets onto shelves and sold. Depending on the business, the older products may eventually become outdated or…

Unlike simple interest, which is calculated only on the principal, compound interest is calculated on both the principal and the financial intermediary definition accumulated interest. This compounding effect causes investments to grow faster over time, much like a snowball gaining size as it rolls downhill. Should you need any help with checking your calculations, please…

Scalability is the major advantage of outsourcing accounting services, especially in businesses involving fluctuating business demands. Whether facing seasonal peaks, expansion initiatives, or periods of reduced activity, outsourcing providers offer flexible solutions customized to match varying requirements. Most of the outsourcing service providers offer customizable service packages that accommodate fluctuations in activity, ensuring that businesses…

The cash flow statement is reported in a straightforward manner, using cash payments and receipts. Investing activities include any sources and uses of cash from a company’s investments. Purchases or sales of assets, loans made to vendors or received from customers, or any payments related to mergers and acquisitions (M&A) are included in this category.…