It is the average annual net income the investment will produce, divided by its average capital cost. If the result is more than the minimum rate of return the business requires, that is an indication the investment may be worthwhile. If the accounting rate of...
Raising capital or considering an acquisition means you’ll need skilled accounting practitioners to help you. Another major area where CPAs can be much better than a simple bookkeeper are producing tax returns - and interacting with tax authorities like the IRS or state tax...
A check endorsement is for security purposes to verify you are the intended recipient of the check. Bank reconciliation, or balancing your checkbook, can help you track checks and other transactions each month. This helps ensure every transaction is accounted for and provides a better...
If the average stock of a business is high in relation to its annual sales, its inventory turnover ratio will be low. Similarly, if the average stock is low, the inventory turnover ratio will be high. A low inventory turnover ratio, on the other hand,...
Beyond tax expertise, we offer services including bookkeeping, payroll management, enrolled agent guidance, and business consulting. Nearly anyone can learn to record a business’s financial transactions, such as purchases, sales, and payments. But as a business grows and the number of transactions taking place grows,...
A number of online calculators can compute present value for your annuity. But if you want to figure out present value the old-fashioned way, you can rely on a mathematical formula (with the help of a spreadsheet if you’re comfortable using one). You can then...
In contrast, car manufacturers have a low inventory turnover rate because they sell high-value items that take time to produce. The key is to find out what the standard ratio is for your industry so that you can compare your ratio to similar businesses. The...
Instead, the business income or loss is passed through to the owners, and they report the business income or loss on their own personal tax returns. Thus, the income of the business is taxed only once, at the individual tax rate of the owner or...
The LLC should file annual reports or biennial reports that give updates on current members, business locations, and other changes. The growth potential of your business operations can influence your decision between forming an LLC or an S corp. While LLCs provide a flexible...
Preferreds, which offer income potential, are securities that are generally considered hybrid investments, meaning they share characteristics of both stocks and bonds. They can offer more predictable income than do common stocks and are typically rated by the major credit rating agencies. Yet, because preferred...