September 1, 2026

Understanding Inflation Accounting

According to the July 12, 2026, Consumer Price Index Release from the U.S. Bureau of Labor Statistics, the 12-month inflation rate rose by 3.4 percent and the month-over-month measure rose by 0.1 percent in July 2026…
August 1, 2026

Understanding the Exchange Ratio

With more than $57 trillion in mergers and acquisitions, according to the Institute for Mergers, Acquisitions & Alliances, understanding…
July 1, 2026

Understanding Depreciation Recapture

What is Depreciation Recapture
June 1, 2026

Understanding Horizontal Analysis

Horizontal Analysis provides businesses a method to examine financial statement entries by looking at the documents’ number for a specific accounting time frame compared to the same length of a historical period for the same accounting line item…
May 1, 2026

Understanding the EV/2P Ratio

đź–¨ Print⏱ 3 min readWhen it comes to raw materials, especially for fossil fuels, it’s essential to evaluate existing and potential production capabilities for such companies. Using the EV/2P Ratio is a powerful tool when evaluating fossil fuel-related companies. Defining the Ratio This ratio is calculated by dividing a business’ enterprise value into the company’s reserves. It provides financial analysts, investors and internal business stakeholders with a snapshot of a company’s reserves and the business’ likelihood of preserving operation growth. This standardizes valuations, thereby allowing analysts to compare company-to-company financials. How to Calculate EV/2P Enterprise Value (EV) / Total 2P Reserves Defined as: Enterprise Value = Equity (open market price) + Debt (open market price) – Cash and Cash Equivalents […]
April 1, 2026

Understanding Cash EBITDA

While Cash EBITDA isn’t recognized by generally accepted accounting principles (GAAP), it’s a way for company owners and investors to account for deferred revenue during valuation modeling. This financial metric…
March 1, 2026

Understanding Qualifying Dispositions

With 57 percent of public companies offering their workers employee stock purchase plans (ESPPs), according to the National Association of Stock Plan Professionals (NASPP), understanding how qualifying dispositions work is an essential…
February 1, 2026

Understanding the Equity Multiplier

Whether you are an investor, an owner or an internal financial analyst, understanding how the equity multiplier works and how to interpret it is a helpful skill.
January 1, 2026

Defining An Activity Cost Driver

An activity cost driver is anything that causes a company's variable costs to either reduce or grow. Since measuring an activity cost driver is a way to streamline the administration of managing production costs, it’s…
December 1, 2025

How to Account for Accretion

Whether it’s an individual investor or a business owner looking to increase their earning power, understanding how accretion works is essential for individual and business investors to make the correct decisions…
November 1, 2025

Understanding The Q Ratio

When it comes to evaluating a business, there are many ways to perform a valuation. One way to do so is to use the Q Ratio. Known as Tobin's Q Ratio or simply the Q Ratio, this method looks at the proportion between the values…
October 1, 2025

Understanding Contribution Margin After Marketing

Contribution margin after marketing (CMAM) measures how much money is generated per unit retailed after factoring in a company's variable costs, along with marketing costs.
September 1, 2025

How to Evaluate Accounts Receivables

According to the Federal Reserve Bank of St. Louis, collection agencies saw $16.28 billion in revenue in 2019. While revenues have declined somewhat in recent years, unpaid invoices are still big business. Accounts…
July 1, 2025

Examining Differences Between Liquidity And Solvency

Liquidity looks at how well a company can handle paying wages, inventory and lending repayments via measuring its cash or quasi-cash levels. Put another way, it looks…
June 1, 2025

Understanding the Goodwill to Assets Ratio

The goodwill to assets ratio measures how much of a company's total assets come from goodwill – an intangible asset like brand value or customer loyalty – and it plays a role in assessing the company's overall value. It…
May 1, 2025

Cash Flow Available for Debt Service (CFADS)

When it comes to the risk of default, Moody's found that during Covid-19, American businesses had a 7.8 percent chance of defaulting. This is compared to a low of 4 percent in 2021, but lower than the current 9.2 percent risk of…
April 1, 2025

Valuation Ratio Calculating the EV / 2P

When it comes to analyzing a company’s financials, there are many avenues we can take. One way is through multiples; calculating the EV/2P multiple is the focus of this analysis…
March 1, 2025

Defining Net Revenue Retention (NRR)

The subscription economy, according to Forbes, is expected to reach $1.5 trillion in revenue for businesses. With the potential likely realized this year, it's vital to understand how it is tracked – and more importantly, how…
February 1, 2025

Analyzing Return on Ad Spending

Return on Ad Spend (ROAS) is one way to help advertising and marketing professionals and investors analyze how well promotions do (or don't) produce sales. It helps advertisers develop data based on their campaigns' revenue…
January 1, 2025

Calculating the CAC Payback Period

The CAC Payback Period looks at how a business needs to recover its investment in attracting new customers. It is especially crucial for companies that are in industries with large marketing and…
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