What are some examples of fixed assets?

July 9, 2024 No Comments

A: Fixed assets are long-term assets that a company has purchased and is using for the production of its goods and services. Fixed assets are noncurrent assets meaning the assets have a useful life of more than one year. Fixed assets include property, plant, and equipment (PP&E) and are recorded on the balance sheet. Fixed assets are also referred to as

What are some examples of horizontal integration?

July 9, 2024 No Comments

A: One of the clearest examples of horizontal integration is Facebook’s acquisition of Instagram in 2012 for a reported $1 billion. Both Facebook and Instagram operated in the same industry and were in similar production stages in regard to their photo-sharing services. Facebook, looking to

On which financial statement does a company list its raw material costs?

July 9, 2024 No Comments

A: A company records its raw material costs on its income statement as part of operating expenses, and it usually lists them as costs of goods sold (COGS). Raw Materials Any substance or material used in the production or manufacturing of a good is considered

What are some examples of how cash flows can be manipulated or distorted?

July 9, 2024 No Comments

A: When you review a company’s balance sheet or income statement, you run into a breakdown of cash flow. Ostensibly, the cash flow is the difference between how much money is generated versus how much is spent in operations. However, it isn’t always that straightforward.

On which financial statements does a company report its long-term debt?

July 9, 2024 No Comments

A: A company lists its long-term debt on its balance sheet under liabilities, usually under a subheading for long-term liabilities. Long-Term Liabilities Any obligations a company bears for a time period that extends past the current operating cycle or current year are considered long-term liabilities.

What are some examples of industries that cannot claim cost of goods sold (COGS)?

July 9, 2024 No Comments

A: Generally speaking, the Internal Revenue Service, or IRS, allows you to deduct the cost of goods that you either make or purchase to sell or resell for your business. For accounting and tax purposes, these are listed under the entry title cost of goods

What are common concepts and techniques of managerial accounting?

July 9, 2024 No Comments

A: The common concepts and techniques of managerial accounting are all the concepts and techniques that surround planning and budgeting, short- and long-term project decision making and operational measurement of performance. What Is Managerial Accounting? Managerial accounting is the process of identifying, analyzing, recording and

What are some examples of inherent risk?

July 9, 2024 No Comments

A: In financial and managerial accounting, inherent risk is defined as the possibility of incorrect or misleading information in accounting statements resulting from something other than failure of controls. Examples of inherent risk are most common where accountants have to use a larger than normal

What are common growth rates that should be analyzed when considering the future prospects of a company?

July 9, 2024 No Comments

A: Some of the most common growth rate metrics that investors and analysts consider in evaluating a company’s future prospects and suitability as an investment are revenues and earnings, the price-earnings (P/E) ratio, the price-earnings to growth (PEG) ratio, and return on equity (ROE). To

If the intrinsic value of a stock is significantly lower than the market price, should you avoid purchasing it? Why or why not?

July 9, 2024 No Comments

A: Though a stock with a significantly lower intrinsic value than current market price may indicate the stock is overvalued, this does not necessarily mean that the stock should be avoided. Looking at the disparity between intrinsic value and market price is known in the

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