How are current and noncurrent assets different?

July 7, 2024 No Comments

A: Assets can be divided into two categories: current and noncurrent. Current assets are items listed on a company’s balance sheet that are expected to be converted into cash within one fiscal year. Conversely, noncurrent assets are long-term assets that a company expects to hold over one

How are EBIT and operating income different?

July 7, 2024 No Comments

A: EBIT (earnings before interest and taxes) is a company’s net income before interest expense, and income tax expense have been deducted. EBIT is often considered synonymous with operating income, although there are exceptions. Investors and creditors use EBIT to analyze the performance of a company’s core operations

Do all countries follow the same GAAP?

July 7, 2024 No Comments

A: Generally accepted accounting principles, formally designated in the United States as GAAP, vary from country-to-country, and no universally accepted accounting recording and publishing system currently exists. The GAAP are a combination of procedures and standards utilized by a company when generating its financial statements.

Do dividends go on the balance sheet?

July 7, 2024 No Comments

A: Cash dividends offer a typical way for companies to return capital to their shareholders. The cash dividend affects the cash and shareholders’ equity accounts primarily. There is no separate balance sheet account for dividends after they are paid. However, after the dividend declaration and

Do plane tickets get cheaper closer to the date of departure?

July 7, 2024 No Comments

A: The price of flights usually increases one month prior to the date of departure. Flights are usually cheapest between three and seven weeks prior to departure. This answer has some exceptions, notably the winter holidays. If the trip is planned during a holiday, the

Does a capital expenditure (CAPEX) immediately affect income statements?

July 7, 2024 No Comments

A: A capital expenditure, or CAPEX, is considered an investment into the business. The money spent is not immediately reported on the income statement; rather, it is treated as an asset on the balance sheet. A CAPEX is deducted over the course of several years

A hypothecation agreement allows a broker-dealer to

July 7, 2024 No Comments

A: A. approve the client for “hot” IPOs. B. hold the margined securities in a street name loan – using the securities as collateral for other means (i.e. bank loans and short sales of other customers). C. hold margined securities in mutual fund accounts and

Are depreciation and amortization included in gross profit?

July 7, 2024 No Comments

A: Gross profit is the revenue earned by a company after deducting the direct costs of producing its products. For example, if it costs $15,000 to produce a car, and the car sells for $20,000, the difference of $5,000 is the gross profit on that one car. Gross profit, sometimes referred to as

Are qualified dividends included in ordinary dividends?

July 7, 2024 No Comments

A: Qualified dividends are included with ordinary dividends in box 1a of the Internal Revenue Service Form 1099-DIV; the box includes all ordinary dividends earned from a particular stock. Box 1b shows the number of the dividends in box 1a that are qualified dividends. The

Can a stock have a negative price-to-earnings (P/E) ratio?

July 7, 2024 No Comments

A: Yes, a stock can have a negative price-to-earnings ratio (P/E), but it is very unlikely that you will ever see it reported. Although negative P/E ratios are mathematically possible, they generally aren’t accepted in the financial community and are considered to be invalid or

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