How to Calculate Free Cash Flow to Equity (FCFE) from CFO Free Cash Flow to Equity (FCFE) is the amount of cash generated by a company that can be potentially distributed to its shareholders – you can calculate FCFE from CFO (cash flow from operations). FCFE is a key metric in one of the approaches…
What is Unearned Revenue? Unearned revenue, sometimes referred to as deferred revenue, is payment received by a company from a customer for products or services that will be delivered at some point in the future. The term is used in accrual accounting, in which revenue is recognized only when the payment has been received by…
What is Free Accounting Software? Free accounting software provides businesses from sole proprietors to and small- and medium-sized enterprises (SMEs) with a cost-effective solution for their accounting needs. The accounting process tells how well the operation is doing, how much money is coming in, and where the money goes. In this article, we compile a…
What is MACRS Depreciation? MACRS Depreciation is the tax depreciation system that is currently employed in the United States. The MACRS, which stands for Modified Accelerated Cost Recovery System, was originally known as the ACRS (Accelerated Cost Recovery System) before it was rebranded to its current form after the enactment of the Tax Reform Act…
What is Gross Income? Gross income refers to the total income earned by an individual on a paycheck before taxes and other deductions. It comprises all incomes received by an individual from all sources – including wages, rental income, interest income, and dividends. For example, if the revenue earned by an individual for rendering consultancy…
What is the Chart of Accounts? The chart of accounts is a tool that lists all the financial accounts included in the financial statements of a company. It provides a way to categorize all of the financial transactions that a company conducted during a specific accounting period. Companies often use the chart of accounts to…
What are Overheads? Overheads are business costs that are related to the day-to-day running of the business. Unlike operating expenses, overheads cannot be traced to a specific cost unit or business activity. Instead, they support the overall revenue-generating activities of the business. For example, a vehicle retail company pays a premium rent for business space…
What is Customer Acquisition Cost (CAC)? Customer acquisition cost (CAC) is the cost related to acquiring a new customer. In other words, CAC refers to the resources and costs incurred to acquire an additional customer. Customer acquisition cost is a key business metric that is commonly used alongside the customer lifetime value (LTV) metric to…
What is Average Revenue Per Paying User (ARPPU)? Average revenue per paying user (ARPPU) is a non-GAAP metric used to assess the average revenue generated from a paying customer. Although similar to average revenue per user (ARPU), the fundamental difference with ARPPU is that the calculation of the metric only involves active paying customers and…
What are Equity Issuance Fees? “Equity issuance fees” is the accounting term used to reference the costs a company incurs when they introduce securities into the market. A company commonly introduces shares of capital stock when it’s looking to grow its business, expand its operating footprint, and establish a broader base of shareholders. The Fees…
