Basics of Accounting

A relevant cost is a cost that only relates to a specific management decision, and which will change in the future as a result of…

Cash flow from assets is the aggregate total of all cash flows related to the assets of a business. This information is used to determine…

Accounting ratios are those ratio comparisons that can be derived solely from the financial statements. They are used to form conclusions regarding the liquidity, leverage,…

The price earnings multiple compares the earnings per share reported by a company to the market price of its common stock. This multiple is used…

A discretionary fixed cost is an expenditure for a period-specific cost or a fixed asset, which can be eliminated or reduced without having an immediate…

The total equity of a business is derived by subtracting its liabilites from its assets. The information for this calculation can be found on a…

Operating ratio is the ratio of operating expenses to net sales. Operating ratio is also a common term in the insurance business, where it refers…

Operating ratios compare the operating expenses and assets of a business to several other performance benchmarks. The intent is to determine whether the amount of…

Accounting is the practice of recording and reporting on business transactions. The basics of accounting can be summarized within the following points: The system of…

The scattergraph method is a visual representation of the cost and activity data associated with an expense. The resulting chart is used to identify and…