EBIT margin

The EBIT margin is a financial ratio that measures the profitability of a company calculated without taking into account the effect of interest and taxes. It is calculated by dividing EBIT (earnings before interest and taxes) by sales or net income. EBIT margin is also known as operating margin. It is characterized by reflecting the … Read more

Balance of Trade

Balance of trade is the difference between the value of exports and imports of goods and/or services of a country in a specific period. As it measures the difference between exports and imports, it is also referred to as trade balance. Balance of trade is a significant element of national accounting that identifies exports and … Read more

Financial Statement

Financial statements are a set of four most significant reports of a business corporation or an organization. It tells about the overall health of a business in terms of finance. A standard set of Financial statements include: Balance Sheet or Statement of Financial Position Income statement or Statement of Income Cash Flow statement or Statement … Read more

Earnings Per Share – EPS

Earnings per share (EPS) is the part of a company’s net profit obtained by each outstanding share of common stock. Earnings per share is a financial metric, that indicates the profitability of a company. Earnings Per Share Formula: We can calculate EPS by using the formula below: The number of outstanding shares of a company … Read more

Balance Sheet

Balance sheet is one of the four major financial statements of a company or entity. Balance sheet portraits an entity’s economic and financial status on a given date. It’s a summary of entity’s assets, liabilities and equity on a certain date. It’s like a photograph of an organization’s financial health taken on a specific time. … Read more

Accounting

Accounting is the art of serving necessary and effective financial information of economic entities through the process of recording, summarizing, analyzing and reporting transactions to concerned parties. It conveys information about the financial health of a business or individual. That is why accounting is well known as an information system in today’s business world. In … Read more

Asset

Asset is a resource having economic value someone owns or controls with an expectation of getting future economic benefit. In business or accounting, an asset is an economic resource that an individual, a company, a corporation or a country purchased, acquired or achieved which contributes to generating income or cash flow. An asset can be … Read more

Consignment

Consignment is a collection of goods or materials to be sent, in transit or having been sent by owner (consignor) to another person or agent’s (consignee) custody for sale, keeping legal ownership of the goods or materials until they are sold. If sold the consignor will get the payment for sold items. Otherwise, will be … Read more

Accounting infrastructure

Accounting Infrastructure is a set of systems and conventions that directs the functional accounting practice of an enterprise or a professional body under a legal framework and adopted accounting standards. A standard accounting infrastructure ensures the quality of financial reporting for its stakeholders. [subtitleh2]Components of a standard accounting infrastructure are:[/subtitleh2] 1. Information producer and users … Read more

Normal spoilage

Normal spoilage is the unavoidable part of spoilage occurs in a production process. It will occur even the production process is operated with the highest efficiency. That is why it is also known as predetermined or planned spoilage. Manufacturers typically set a rate of normal spoilage based on their product type. Cost of normal spoilage … Read more