Which types of industries have the largest capital expenditures?

July 9, 2024 No Comments

A: Capital expenditures are major purchases, such as facilities and equipment, that companies make to maintain or expand their business. Because such purchases involve acquiring assets that provide value and usefulness for a company for a period of several years, companies recover the cost of

Who actually declares a dividend?

July 9, 2024 No Comments

A: It is a company’s board of directors who actually declares a dividend. The declaration date is the first of four important dates in the process of a company paying a dividend. How a Company Handles Paying a Dividend Before a cash dividend is declared

When are expenses and revenues counted in accrual accounting?

July 9, 2024 No Comments

A: Under the accrual basis of accounting, revenues and expenses are counted when they are earned. This is different from the cash basis of accounting, where they are reported whenever cash actually flows in and out of the business. Most accountants consider the accrual accounting

When do you use installment sales method vs. the cost recovery method?

July 9, 2024 No Comments

A: There are four primary methods that accountants use to recognize business sales revenue: percentage of completion, completed contract, cost recovery and installment sales. In some circumstances, complications in a transaction make it uncertain as to how much revenue from a particular sale is collectible

When does Q4 start and finish?

July 9, 2024 No Comments

A: Most companies such as Facebook have financial years that end on December 31st. For these companies, the fourth quarter begins on October 1st. Other companies have financial years that end on odd dates; the financial year for Nike ends on May 31, for example.

When evaluating terminal value, should I use the perpetuity growth model or the exit approach?

July 9, 2024 No Comments

A: In discounted cash flow (DCF) analysis, neither the perpetuity growth model nor the exit multiple approach is likely to render a perfectly accurate estimate of terminal value. The choice of which method of calculating terminal value to use depends partly on whether an investor

What profit margin is average for a company in the electronics sector?

July 9, 2024 No Comments

A: The electronics sector offers an attractive addition to a portfolio because it provides strong growth opportunities. The electronics sector is very diverse and includes semiconductors, technical instruments, circuit boards, photographic equipment, communication devices, and other electronic and computer equipment. Profit margin is one of

When is accrual accounting more useful than cash accounting?

July 9, 2024 No Comments

A: The accrual accounting method is more useful than the cash accounting method when a person or company is trying to understand the performance of a business over a specified time period. Under the accrual accounting method, all revenue and expenses are matched together. All

What qualifies a company as blue chip?

July 9, 2024 No Comments

A: The term “blue chip” in poker signifies the chip that has the highest value. The term was taken from the poker world and used as stock market terminology. In the investment world, a blue-chip company is well-known, well-established and well-secured. It is considered to

What role do SPVs / SPEs play in public-private partnerships?

July 9, 2024 No Comments

A: When created and used in conjunction with a public-private partnership (PPP), a special purpose vehicle (SPV) — sometimes referred to instead as a special purpose entity (SPE) — allows for improved financing and a greater degree of operational control for the private agent. Since

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