What is Inheritance Tax? Inheritance tax is a tax paid by a person or persons who inherit the estate (money or property) of a deceased person. In some jurisdictions, the terms “estate tax” and “inheritance tax” can be used interchangeably. In the United Kingdom and a few Commonwealth countries, the tax is also called the…
What is Cash? In finance and accounting, cash refers to money (currency) that is readily available for use. It may be kept in physical form, digital form, or invested in a short-term money market product. In economics, cash refers only to money that is in the physical form. Cash in Business Operations Cash is the…
What is Direct Labor? Direct labor refers to the salaries and wages paid to workers directly involved in the manufacture of a specific product or in performing a service. The work performed must be related to the specific task. For a business that provides services to its customers, direct labor is the work performed by…
How to Calculate FCFE From EBITDA You can calculate FCFE from EBITDA by subtracting interest, taxes, change in net working capital, and capital expenditures – and then add net borrowing. Free Cash Flow to Equity (FCFE) is the amount of cash generated by a company that can be potentially distributed to the company’s shareholders. FCFE…
How to Calculate FCFE from Net Income Free Cash Flow to Equity (FCFE) can be calculated using net income as well as using the Free Cash Flow to the Firm (FCFF) formula. It is the amount of cash generated by a company that can be potentially distributed to the company’s shareholders. When using an intrinsic…
What is Window Dressing? “Window dressing” is commonly used to refer to the way a pedestrian facing the window of a retail business is presented to make their goods look most appealing. However, when it is referenced by the finance world, the term means something slightly different. In finance, window dressing refers to the efforts…
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…
