Articles
Pass-Through Taxation: What Is It & How It Works?
One of the most significant advantages of a pass-through entity is the elimination of double taxation. This concept refers to the scenario where a C corporation pays taxes on its profits at the corporate tax rate before distributing any remaining income to shareholders.
Fluctuation (Flux) Analysis in Accounting: A Comprehensive Guide
Fluctuation analysis, often referred to as flux analysis, is the process of examining the changes in financial statement items over a period. The primary goal is to identify significant variances and understand the underlying reasons for these changes.
Understanding Generally Accepted Accounting Principles (GAAP)
Generally Accepted Accounting Principles (GAAP) are a set of accounting rules and standards used by accountants to prepare and report financial information in a consistent and reliable manner.
What is Valuation Allowance
A Valuation Allowance is an accounting concept primarily used in the context of deferred tax assets. Deferred tax assets arise when a company has overpaid taxes or has accumulated tax credits that can be used to reduce future tax liabilities.
Valuation Multiples: Definition & Calculation
The valuation multiples approach is commonly used to find out a business’s value. It is based on premise that companies operating in similar businesses tend to have similar prices, have similar cost structure and operate in similar market conditions.
Working Capital: What It Is, How to Calculate It, and Why It Matters
Key Takeaways: Working capital is crucial for a company’s short-term financial health, reflecting its ability to cover current obligations and operate smoothly.
Net Working Capital In Mergers & Acquisitions (M&A)
A net working capital analysis is one of the key areas in financial due diligence, in addition to the quality of earnings analysis—i.e., adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization)—and a debt and debt-like items analysis.
Understanding Cash Flow Analysis: Definition, Benefits, and Examples
Cash flow analysis is a method of evaluating the financial performance and health of a business by examining its cash inflows and outflows. Cash flow analysis helps business owners, managers, investors, and creditors to understand how a business generates and uses cash, and how it meets its short-term and long-term obligations.
Account Reconciliation in Accounting
Account reconciliation is a crucial process in the world of finance and accounting. It ensures that the financial records of a company are accurate, consistent, and complete.
Mastering the Art of Discounted Cash Flow (DCF) Valuation
Discounted cash flow (DCF) valuation is a widely acclaimed financial modeling technique that determines the present value of an investment by carefully analyzing its anticipated future cash flows.
Decoding Pre-Money vs. Post-Money Value: A Complete Guide
Understanding the distinction between pre-money and post-money value is fundamental for both entrepreneurs and investors in the realm of startup financing. Pre-money value refers to the estimate of a company’s value before it receives new capital from investors, whereas post-money value reflects the company’s value after the infusion of new investment.
Business Valuation: An Introduction
Business valuation is the process of determining the economic value of a business or company. It involves analyzing various aspects of the business, including financial performance, assets, market competition, and future earning potential.