Accounting Tools

MAY 13, 2024

Financial risk is the possibility that the use of debt to finance operations will have a negative impact on earnings. Business risk involves operational and pricing decisions, while financial risk involves financing choices regarding how an organization is to be funded. What is Financial Risk? Reduction actions. Impact on income types.

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40

Accounting Tools

APRIL 7, 2024

If the goods or services are not provided, the company has an obligation to return the funds. Current portion of debt payable. Any portion of long-term debt that is due for payment within one year. Interest accrued on debt that has not yet been invoiced by the lender. Debt that is due for payment in more than one year.

General Ledger 75

General Ledger Payroll Deposits Invoicing 75

Accounting Tools

JANUARY 18, 2024

Less critical deciding factors are the currency in which an entity retains receipts from its operations, and the currency in which debt and equity instruments are issued. Debt Service Whether a foreign operation’s cash flows can service its debt obligations without funds transfers from the reporting entity.

Accounting 75

Accounting Accounting 75

Accounting Tools

JANUARY 24, 2024

What is Debt? Debt is an amount owed for funds borrowed. The lender agrees to lend funds to the borrower upon a promise by the borrower to pay interest on the debt, usually with the interest to be paid at regular intervals. Alternatively, the debt may be unsecured.

Corporate Finance 40

Corporate Finance Tax Accounting Accounting 40

Accounting Tools

JANUARY 24, 2024

What is Debt Financing? Debt financing is the use of a loan or a bond issuance to obtain funding for a business. The reasons for debt financing include obtaining additional working capital , buying assets , and acquiring other entities. Advantages of Debt Financing There are multiple advantages to using debt financing.

Corporate Finance 40

Corporate Finance Tax 40

Accounting Tools

MAY 4, 2024

The cash ratio formula is as follows: (Cash + Cash equivalents) ÷ Current liabilities = Cash ratio Leverage Ratios The relative debt load of a business is its leverage, which is best measured with the debt-equity ratio. Related Articles Capitalization Ratios Coverage Ratios Debt Ratios Ratio Analysis Inventory turnover.

Accounting 40

Accounting Accounting Financial Statements Accounts Receivable 40

Accounting Tools

APRIL 7, 2024

What is the Debt Service Coverage Ratio? The debt service coverage ratio measures whether a business has sufficient cash flow to pay its debt obligations. In essence, it compares cash flows to debt service payments. The debt service figure may also vary, if the debt is subject to a variable interest rate.

Financial Statements 40

Financial Statements Tax 40

Accounting Tools

SEPTEMBER 11, 2023

In essence, cash flows from operations are compared to the payments made for long-term debt reductions, fixed asset acquisitions, and dividends to shareholders. During that time, it also paid down $225,000 of debt, acquired $175,000 of fixed assets, and paid out $75,000 of dividends.

Financial Statements 75

Financial Statements 75

Accounting Tools

MAY 3, 2024

If the borrower cannot repay the liability within the contractually designated time period, the lender can seize the asset and sell it in order to obtain the funds needed to settle the liability. If the amount received from sale of the asset exceeds the amount of the associated debt, then the lender pays the excess amount to the borrower.

Accounts Receivable 40

Accounts Receivable Accounts Receivable Account Receivables Accounting 40

Accounting Tools

MAY 15, 2024

The payback of a large group of term bonds at the same time can present a liquidity challenge for the issuer, which may deal with the situation by rolling over the debt into a new bond issuance. Rollover rate.

Corporate Finance 40

Corporate Finance 40

Accounting Tools

AUGUST 27, 2023

Related Courses Corporate Cash Management Corporate Finance Treasurer's Guidebook What is Funded Debt? Funded debt is money acquired through the sale of long-term securities. The most common type of funded debt is bonds. Related Articles Asset Financing Evergreen Loan Mortgage Sale and Leaseback Term Loan

Corporate Finance 40

Corporate Finance 40

Accounting Tools

MARCH 29, 2024

The line item contains the sum total of the changes that a company experienced during a designated reporting period that were caused by transactions with owners or lenders to either provide long-term funds to the business or to return those funds to the owners or lenders.

Financial Statements 40

Financial Statements 40

Accounting Tools

SEPTEMBER 27, 2023

Related Courses Corporate Cash Management Corporate Finance Treasurer's Guidebook What is Debt Retirement? Debt retirement occurs when a borrower repays the principal associated with a bond or note. An issuer should have a firm plan in place for debt retirement, in order to reassure investors about its ability to do so.

Corporate Finance 40

Corporate Finance 40

Accounting Tools

MARCH 19, 2024

A business that has a relatively small amount of capital stock is said to be thinly capitalized, and probably relies upon a significant amount of debt to fund its operations. Presentation of Capital Stock The funds received from capital stock are recorded within the stockholders' equity section of the balance sheet.

Corporate Finance 40

Corporate Finance Financial Statements Accounting Accounting 40

Accounting Tools

MARCH 29, 2024

The concept most commonly applies to the lending of funds, where a borrower applies for a loan , and there is a credit evaluation by the lender. When all repayment terms of the agreement have been fulfilled by the borrower, the underlying debt agreement is retired. What is a Borrower?

Corporate Finance 40

Corporate Finance 40

Accounting Tools

MARCH 5, 2024

A reserve is funding that is set aside for expected financial requirements. The intent of this allowance is to recognize the expected amount of bad debts contained within the current accounts receivable balance. What is a Reserve? The amount in the reserve is the expected amount of the lawsuit payout. What is an Allowance?

Bookkeeping 40

Bookkeeping Accounts Receivable Accounts Receivable Account Receivables 40

Accounting Tools

JUNE 7, 2023

Financial leverage is the use of debt to buy more assets. However, an excessive amount of financial leverage increases the risk of failure, since it becomes more difficult to repay debt. The financial leverage formula is measured as the ratio of total debt to total assets. Leverage is employed to increase the return on equity.

Corporate Finance 75

Corporate Finance Financial Statements Tax Financial Analysis 75

Accounting Tools

MAY 13, 2024

Leverage Analysis Leverage analysis involves a review of the proportions of debt and equity that a business uses to fund its operations. A key part of the analysis is determining the stability of a firm’s cash flows, to see if it can reliably generate enough cash to pay off its debt obligations as they mature.

Financial Analysis 40

Financial Analysis Financial Statements Accounts Payable Accounts Payable 40

Accounting Tools

OCTOBER 25, 2023

Reserves are sometimes set up to purchase fixed assets , pay an expected legal settlement, pay bonuses, pay off debt , pay for repairs and maintenance, and so forth. This is done to keep funds from being used for other purposes, such as paying dividends or buying back shares. The board of directors is authorized to create a reserve.

Accounting 75

Accounting Accounting Financial Statements Bookkeeping 75

Accounting Tools

MARCH 5, 2024

Coverage ratios are used to evaluate the ability of a business to meet its debt obligations. Coverage ratios compare either income or the amount of assets that can be liquidated to portions or all of a debt obligation. If the resulting ratio is less than 1:1 for an income comparison, then the debt load cannot be supported.

Financial Statements 40

Financial Statements Tax 40

Accounting Tools

DECEMBER 19, 2023

The incremental cost of capital is the weighted-average cost of new debt and equity issuances during a reporting period. When the incremental cost of capital begins to rise, it indicates that investors feel the entity has an excessively risky capital structure that is weighted too far in the direction of debt.

Financial Analysis 40

Financial Analysis Budgeting 40

Accounting Tools

JUNE 12, 2023

The liabilities to be aggregated for the calculation are accounts payable , accrued liabilities , short-term debt , unearned revenue , long-term debt , and other liabilities. In their case, total equity is simply invested funds plus all subsequent earnings.

Financial Statements 75

Financial Statements Accounts Payable Accounts Payable Accounts Receivable 75

Accounting Tools

JUNE 20, 2023

Related Courses Corporate Finance Treasurer's Guidebook The difference between recourse and non-recourse debt is the ability of the lender to take the assets of the borrower if the debt is not paid. Non-recourse debt favors the borrower, while recourse debt favors the lender.

Corporate Finance 75

Corporate Finance Tax Accounting Accounting 75

Accounting Tools

OCTOBER 11, 2023

What is Debt Financing? Debt financing involves borrowing cash from a lender. Comparing Equity Financing and Debt Financing There are several differences between equity financing and debt financing. Related Articles The Difference Between Private Equity and Venture Capital

Corporate Finance 40

Corporate Finance 40

Accounting Tools

JULY 29, 2023

Should have a thorough understanding of derivatives, hedging, investments, bank account management, and international funds flows.

Corporate Finance 75

Corporate Finance Accounting Accounting 75

Accounting Tools

AUGUST 5, 2023

Related Courses Auditing State and Local Governments Governmental Accounting The Green Book Explained The Yellow Book Explained What is Fund Accounting? Fund accounting is a system of accounting used by non-profit entities to track the amount of cash assigned to different purposes and the usage of that cash. Debt service funds.

Accounting 74

Accounting Accounting Budgeting Auditing 74

Accounting Tools

NOVEMBER 6, 2023

This financing is needed to fund a firm’s operational needs, usually in relation to its expected working capital requirements. Debt Bridge Financing Bridge financing is usually in the form of debt , which is sourced from a venture capital firm or investment bank. In this case, the funds are needed to pay for the cost of the IPO.

Corporate Finance 40

Corporate Finance Accounts Receivable Accounts Receivable Account Receivables 40

Accounting Tools

SEPTEMBER 7, 2023

If a covenant is breached, the lender has the right to call the loan, though it may waive the breach and continue to accept periodic debt payments from the borrower. Many notes payable require formal approval by a company’s board of directors before a lender will issue funds.

Accruals 75

Accruals Accounts Payable Accounts Payable Auditing 75

Accounting Tools

APRIL 9, 2024

With such a singular focus, the parties responsible for a revenue center can direct their energies entirely towards driving up sales, without needing to be overly involved in monitoring expenses or invested funds. Related AccountingTools Course Accounting for Managers Related Articles Cost Center Investment Center Profit Center

Accounting 40

Accounting Accounting 40

Accounting Tools

OCTOBER 6, 2023

The investment turnover ratio compares the revenues produced by a business to its debt and equity. The ratio is used to evaluate the ability of a management team to generate revenue with a specific amount of funding. The formula for the investment turnover ratio is to divide net sales by all stockholders' equity and outstanding debt.

Financial Statements 40

Financial Statements 40

Accounting Tools

OCTOBER 13, 2023

Related Courses Corporate Finance Treasurer's Guidebook What is Senior Debt? Senior debt is a security that has a high priority for repayment in the event of the liquidation of the issuer. Senior debt also has repayment priority over all classes of equity. Examples of senior debt are lines of credit and bond offerings.

Corporate Finance 40

Corporate Finance Accounts Receivable Accounts Receivable Account Receivables 40

Accounting Tools

JANUARY 9, 2024

What is a Money Market Fund? A money market fund is a package of government debt instruments that is assembled by a fund management company. The investment is highly liquid , with many investors putting in funds for as little as a day. The package is typically comprised of Treasury bills, notes, and bonds.

Deposits 40

Deposits Corporate Finance Billing 40

Accounting Tools

MAY 21, 2023

The asset to equity ratio reveals the proportion of an entity’s assets that has been funded by shareholders. The inverse of this ratio shows the proportion of assets that has been funded with debt. A low ratio should be the goal when cash flows are highly variable, since it is quite difficult to pay off debt in this situation.

Financial Statements 40

Financial Statements 40

Accounting Tools

AUGUST 1, 2023

If the ratio is high, it implies that assets are being funded with a high proportion of debt. Conversely, if the ratio is low, it implies that management is either avoiding the use of debt or the company is unable to obtain debt from prospective lenders.

Financial Statements 40

Financial Statements Accounts Payable Accounts Payable Accounts Receivable 40

Accounting Tools

AUGUST 27, 2023

Commercial paper is unsecured debt that is issued by an entity, and which has a fixed maturity ranging from one to 270 days. A company can sell its commercial paper directly to investors, such as money market funds, or through a dealer in exchange for a small commission.

Corporate Finance 40

Corporate Finance Deposits Billing 40

RevCycle

MARCH 20, 2024

This article explores the financial struggles of rural healthcare in the Great Lakes region and proposes solutions, including implementing flexible payment policies, up-front collections, and partnering with high-quality collection agencies, to create a more sustainable future. Implementing a flexible payment policy can be a game-changer.

Collections 92

Collections Billing Revenue Cycle 92

Accounting Tools

JANUARY 30, 2024

The interest coverage ratio measures the ability of a company to pay the interest on its outstanding debt. This measurement is used by creditors , lenders , and investors to determine the risk of lending funds to a company. What is the Interest Coverage Ratio?

Financial Statements 40

Financial Statements Tax 40