What are Credit Analyst Positions? There are a variety of credit analyst positions. Credit analysts – in general – are responsible for looking at the backgrounds of individuals and companies applying for loans or other types of credit. They examine financial and personal information about applicants and draw up figures that help them determine whether…
What is Operating Margin (Return on Sales)? Operating margin, also known as return on sales, is an important profitability ratio measuring revenue after the deduction of operating expenses. It is calculated by dividing operating income by revenue. The operating margin indicates how much of the generated sales is left when all operating expenses are paid off. In…
What is Depreciation Expense? When a long-term asset is purchased, it should be capitalized instead of being expensed in the accounting period it is purchased in. Assuming the asset will be economically useful and generate returns beyond that initial accounting period, expensing it immediately would overstate the expense in that period and understate it in…
What is Current Debt? Current debt includes the formal borrowings of a company outside of accounts payable. This appears on the balance sheet as an obligation that must be paid off within a year’s time. Thus, current debt is classified as a current liability. This is not to be confused with the current portion of…
What is Accounts Payable (AP)? Accounts payable (AP) refers to the amount of money a business owes to its suppliers or vendors for goods and services received but not yet paid for. They are considered short-term liabilities and are typically due within 30 to 90 days. AP is considered one of the most current forms…
What are Intangible Assets? According to the IFRS, intangible assets are non-monetary assets without physical substance. Like all assets, intangible assets are expected to generate economic returns for the company in the future. As a long-term asset, this expectation extends for more than one year or one operating cycle. Intangible assets lack a physical substance…
What are the Objectives in Accounting for Income Taxes? Tax accounting is one of the largest subsets or specializations within the field of accounting. In corporate finance, there are several objectives related to accounting for income taxes and optimizing a company’s valuation. Main Objectives The three main objectives in accounting for income taxes are: 1….
Net Income Explained: How It’s Calculated and Where It’s Found Net Income Definition: Net income is the amount of accounting profit a company has left over after subtracting all of its expenses. It connects directly to the balance sheet and cash flow statement and is a key measure of financial performance. Also called net profit…
What is Earnings Before Tax (EBT)? Earnings before tax, or pre-tax income, is the last subtotal found in the income statement before the net income line item. The EBT metric is found after all deductions – except taxes – that have been made against sales revenue. These deductions include COGS, SG&A, depreciation and amortization, and…
