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Accounting breakeven point definition

Accounting Tools

Related Courses Financial Analysis The Interpretation of Financial Statements What is the Accounting Breakeven Point? This concept is used to model the financial structure of a business.

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Net income margin definition

Accounting Tools

Related Courses Business Ratios Guidebook Financial Analysis The Interpretation of Financial Statements What is Net Income Margin? It is used in ratio analysis to determine the proportional profitability of a business. Net income margin is the net after-tax income of a business, expressed as a percentage of sales.

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Contribution definition

Accounting Tools

Related Courses Financial Analysis What is Contribution? Contribution should be calculated using the accrual basis of accounting , so that all costs related to revenues are recognized in the same period as the revenues. Contribution is the amount of earnings remaining after all direct costs have been subtracted from revenue.

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Accounting rate of return definition

Accounting Tools

Related Courses Capital Budgeting Financial Analysis What is the Accounting Rate of Return? In essence, then, profit is calculated using the accrual basis of accounting , not the cash basis. The accounting rate of return is the expected rate of return on an investment.

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Net income formula definition

Accounting Tools

Related Courses Business Ratios Guidebook Financial Analysis The Interpretation of Financial Statements What is the Net Income Formula? The net income formula yields the residual amount of profit or loss remaining after all expenses are deducted from revenue.

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EBITDA definition

Accounting Tools

Related Courses Business Ratios Guidebook Financial Analysis The Interpretation of Financial Statements What is EBITDA? EBITDA is a contraction of earnings before interest, taxes, depreciation , and amortization. It is used to evaluate the performance of a business before the impact of financing decisions.

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Fixed cost definition

Accounting Tools

The concept is used in financial analysis to find the breakeven point of a business, as well as to determine product pricing. Allocation of Fixed Costs Fixed costs are allocated under the accrual basis of cost accounting. A fixed cost is a cost that does not increase or decrease in conjunction with any activities.