How do you calculate credits and debits in the general ledger?

June 30, 2024 No Comments

A: A general ledger acts as a record of all accounts and their transactions. Balancing the ledger involves subtracting the total number of debits from the total number of credits. In order to correctly calculate credits and debits, a few rules must first be understood.

How do you calculate net current assets in Excel?

June 30, 2024 No Comments

A: The value of net current assets, or working capital, helps to gauge a company’s short-term financial health. If you are working on a balance sheet in Microsoft Excel, you usually have two sides: assets and liabilities. The formula for net current assets is total

How do you calculate payback period using Excel?

June 30, 2024 No Comments

A: The payback period is the number of years it takes to recover an initial investment outlay, as measured in after-tax cash flows. It is an important calculation used in capital budgeting to help evaluate capital investments. For example, if a payback period is stated

How do spinoffs differ from initial public offerings (IPOs)?

June 30, 2024 No Comments

A: A spinoff is when a public parent company organizes a subsidiary and distributes shares to current stockholders for the new business, thereby creating a new publicly traded company. An initial public offering (IPO) occurs when a private company first sells stock to the public

How do tangible and intangible assets differ?

June 30, 2024 No Comments

A: Tangible Assets Tangible assets are physical and measurable assets that are used in a company’s operations. Assets like property, plant, and equipment, are tangible assets. These assets include: Land Vehicles Equipment Machinery Furniture Inventory Securities like stocks, bonds, and cash There are two types

How do the balance sheet and cash flow statement differ?

June 30, 2024 No Comments

A: The balance sheet and cash flow statement are two of the three financial statements that companies issue to report their financial performance. The financial statements are used by investors, market analysts, and creditors, to evaluate a company’s financial health and earnings potential. The third

How do I calculate the P/E ratio of a company?

June 30, 2024 No Comments

A: The price-to-earnings ratio or P/E is one of the most widely-used stock analysis tools used by investors and analysts for determining stock valuation. In addition to showing whether a company’s stock price is overvalued or undervalued, the P/E can reveal how a stock’s valuation

How do I discount Free Cash Flow to the Firm (FCFF)?

June 30, 2024 No Comments

A: Discounted free cash flow for the firm (FCFF) should be equal to all of the cash inflows and outflows, adjusted to present value by an appropriate interest rate, that the firm can be expected to bring in during its lifetime. It’s a form of

How do I perform a financial analysis using Excel?

June 30, 2024 No Comments

A: Investors can use Excel to run technical calculations or produce fundamental accounting ratios. Corporations use Excel to run capital budgeting analysis, risk analysis or discount cash flows. Options traders can run Black-Scholes pricing. There are dozens, if not hundreds, of standard financial analysis models

How do I read and analyze an income statement?

June 30, 2024 No Comments

A: The income statement, also known as the profit and loss (P&L) statement, is the financial statement that depicts the revenues, expenses and net income generated by an organization over a specific period of time. It is one of the most heavily scrutinized financial statements

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