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Therefore, a firm's historic financial information may not be accurate and can lead to over- and undervaluation. In an acquisition, a buyer often performs due diligence to verify the seller's information. This method is based on projections of future cash flows which are adjusted to get the current market value of the company. The main difference between the discounted cash…

This transparency is crucial for maintaining trust and ensuring that the financial statements provide a true and fair view of the company’s financial position. When you sell land, the first step is to determine the price at which the land was sold, and subtract from it any selling costs, such as a sales commission paid to a realtor. Then subtract…

This transparency is crucial for maintaining trust and ensuring that the financial statements provide a true and fair view of the company’s financial position. When you sell land, the first step is to determine the price at which the land was sold, and subtract from it any selling costs, such as a sales commission paid to a realtor. Then subtract…

Eide Bailly is Utah’s largest accounting firm with offices in Salt Lake City, Lehi, Orem and Ogden. The Salt Lake City office is located in the heart of downtown, which is rich with historical sites, museums, professional sports teams, symphony, art and a vast variety of family-friendly activities. With Bench, you get a team of real, expert bookkeepers in addition…

This was the case with Blackberry’s dramatic decline in 2013 due to the popularity of Apple and Samsung smartphones. This can also occur with technological advances that may render a company or sector’s products obsolete, such as compact-disc makers in the early 2000s. Retained earnings and profits are related concepts, but they’re not exactly the same. With plans starting at…

In other words, the total number of sales dollars that can be lost before the company loses money. Sometimes it’s also helpful to express this calculation in the form of a percentage. By integrating the margin of safety with the above metrics, businesses can craft a holistic risk management strategy. What does an increase in fixed costs do to the…

Anything that can be used productively to general sales for the company can fall into this category. Plant assets are key to a company's production process and are often considered among the most valuable items on the balance sheet. Here, we'll discuss what plant assets are, why they matter, and how they fit into a company's financial circumstances. In the…

QuickBooks Online’s customer records are thorough and can be imported in multiple formats, including CSV, Excel, Google Sheets, and QuickBooks Desktop. Each customer's home page has contact information as well as more unusual fields, like the customer's preferred language and Price Rules. This page also has links to that customer’s transactions, statements, projects, and late fees, as well as to…

Rating agencies examine an insurer’s liquidity in order to establish a credit rating. These agencies will publish the liquidity ratio as well as a quick ratio, which compares cash and cash equivalents to liabilities. The results of these stress tests for a single insurer are compared to the results of other insurers offering similar policies. Current liquidity is the total…

Market value refers to the asset’s current replacement cost, and it has a defined ceiling and floor, although the floor can be subjective. Companies usually record assets at cost (how much it cost to acquire the asset). Sometimes the business cannot recover this amount and must report such assets at the lower of cost and Net Realizable Value. Accounting standards…