What is the difference between accrual accounting and cash accounting?

July 9, 2024 No Comments

A: The primary difference between the two principal business accounting methods, accrual accounting and cash accounting, lies in the point in time when revenue and expenses are recorded as taking place. The accrual accounting method is the most common accounting practice for corporations. Businesses with

What is the difference between accrued expense and accrued interest?

July 9, 2024 No Comments

A: An accrued expense, or accrued liability, is an accounting expense that has occurred but is not yet paid for. The expense is usually not yet entered into the company’s general ledger; it does not appear on its financial statements unless the company makes an

What is the difference between an accretive and a dilutive merger?

July 9, 2024 No Comments

A: A merger and acquisition (M&A) deal is said to be accretive if the acquiring firm’s earnings per share (EPS) increases after the deal goes through. If the resulting deal causes the acquiring firm’s EPS to decline, the deal is considered to be dilutive. Investors

What is the difference between an accretive transaction and a dilutive transaction?

July 9, 2024 No Comments

A: “Accretion” and “dilution” are chemical terms that refer to respective increases or decreases in the concentration of a substance or compound. The financial world adopted these references to describe the impact of a merger and acquisition (M&A) deal on earnings per share (EPS). When

What is the difference between an accrual and an account payable?

July 9, 2024 No Comments

A: The difference between an accrual and an account payable is that an accrual is an accounting adjustment for revenue that has been earned but not yet recorded or an expense incurred but not yet recorded, and an account payable is a liability to a

What is the difference between an operational expense and an administrative expense?

July 9, 2024 No Comments

A: The differences between an operational expense and an administrative expense is that operational expenses cover the costs to produce products and services for clients and administrative expenses cover overall general expenses that are not necessarily tied to production or a specific department within the

What is the difference between arbitrage and speculation?

July 9, 2024 No Comments

A: Arbitrage and speculation are very different strategies. Arbitrage involves the simultaneous buying and selling of an asset in order to profit from small differences in price. Often, arbitrageurs buy stock on one market (for example, a financial market in the United States like the

What is the difference between a compiled and a certified financial statement?

July 9, 2024 No Comments

A: All publicly-traded companies are required to provide financial statements, including a balance sheet, cash flow statement and income statement. To ensure that these statements are accurate and fall within the guidelines of generally accepted accounting principles (GAAP) they are audited and certified by an

What is the difference between a merger and a takeover?

July 9, 2024 No Comments

A: In a general sense, mergers and takeovers (or acquisitions) are very similar corporate actions – they combine two previously separate firms into a single legal entity. Significant operational advantages can be obtained when two firms are combined and, in fact, the goal of most

What is the average price-to-earnings ratio in the automotive sector?

July 9, 2024 No Comments

A: As of January 2015, the current price-to-earnings, or P/E, ratio was 15 for auto manufacturers and 20 for auto parts manufacturers. The forward P/E ratios, which are based on projected earnings, are 29 and 17, respectively. Automotive Sector The automotive sector is composed of

All Rights Reserved