McSwain & Company, PS
Common Business Accounting Calculations
December 1, 2024 · Blog, General Business News, Uncategorized
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These articles provide general information on tax, accounting, and financial topics for small businesses and individuals. They are educational in nature and are not specific legal, accounting, financial, tax, or other professional advice, and should not be relied upon as such. This content was prepared by Service2Client and may have been reviewed or edited by the website owner for accuracy and compliance. Look for a trust mark below for verification details. No representation is made that any approach described will achieve a particular result, and no regulatory or professional body has reviewed or endorsed this content. Because each situation is different, readers should consult a qualified professional about their specific circumstances before acting. Images accompanying these articles are protected by copyright and may not be copied or reused.
December 1, 2024
Published by Service2Client on December 1, 2024
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No matter the type of business or industry, being able to analyze and deduce patterns is essential to discovering a business’ financial health. Here are four commonly used calculations to help internal and external…
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November 1, 2024
Published by Service2Client on November 1, 2024
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This metric, which is also referred to as the cash cycle or the net operating cycle, looks at the time a business takes to recover its investment in inventory to eventually sell. The process starts from selling its goods, collecting…
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October 1, 2024
Published by Service2Client on October 1, 2024
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Analyzing a company's Accounts Receivables is an effective way to measure its current cash flows and the likelihood of maintaining healthy cash flows. According to the U.S. Chamber of Commerce's Small Business Index (Third Quarter 2024), 68 percent…
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September 1, 2024
Published by Service2Client on September 1, 2024
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Whether it’s a private equity transaction or an institutional or retail investor, analyzing a company’s financial statements is an important part of fundamental analysis. One important but basic way…
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August 1, 2024
Published by Service2Client on August 1, 2024
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When it comes to running a business, there are a lot of expenses incurred during operations. As of January 2024, New York University’s Stern School of Business had recorded nearly $1.2 trillion in capital expenditures by U.S.
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July 1, 2024
Published by Service2Client on July 1, 2024
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With more than eight million small businesses in America, and more than $776 billion in net premiums issued by the insurance industry in 2022 for commercial policies (according to the Insurance Information Institute), business…
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June 1, 2024
Published by Service2Client on June 1, 2024
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A credit policy explains how a company will manage lines of credit for client accounts, and what procedures to follow for severely outstanding invoices. It helps a business promote a robust foundation for its working capital level…
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May 1, 2024
Published by Service2Client on May 1, 2024
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During Q3 of 2023, businesses in the United States made approximately $3.3 trillion, according to Statista. This is right behind the third quarter of 2022, when corporations in America made even more money. These figures are…
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April 1, 2024
Published by Service2Client on April 1, 2024
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When it comes to any business, but especially for a start-up, it’s essential to determine how long a company can survive before it must declare bankruptcy and/or close its doors. The biggest metric, especially for a start-up, is to…
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March 1, 2024
Published by Service2Client on March 1, 2024
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We all have those days when we dream of striking it rich with a winning lottery ticket. Never having to work again while living a life of luxury. While your chance of finding a four-leaf clover is higher than winning the lottery, we can still…
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February 1, 2024
Published by Service2Client on February 1, 2024
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Variance analysis is found by determining the difference between what was budgeted and what actually occurred. Additionally, when variances are added together, we get a better picture of how well a company is measuring its performance…
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January 1, 2024
Published by Service2Client on January 1, 2024
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Fiduciary accounting, which is also referred to as court accounting, is a way to document and report financial activity during a discrete period of time for legal entities, such as a conservatorship, estate, trust or guardianship…
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December 1, 2023
Published by Service2Client on December 1, 2023
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According to the United States Department of Labor's Consumer Credit Protection Act (CCPA), wage garnishments are a complex legal process for employers to account for when it comes to employment matters. This article…
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November 1, 2023
Published by Service2Client on November 1, 2023
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When it comes to measuring revenue, it’s essential that businesses analyze it from a variety of perspectives. While there's revenue and net income on an income statement to show a company's quarterly financials, another way…
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October 1, 2023
Published by Service2Client on October 1, 2023
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With accounting fraud and financial reporting mistakes creating a lack of confidence, understanding how financial reporting mistakes occur and are detected is an important topic. According to the Association for Federal Enterprise Risk Management and…
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September 1, 2023
Published by Service2Client on September 1, 2023
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🖨 Print⏱ 4 min readLooking at expenses for one’s business is essential to reduce cash flow issues. For example, it would show if there’s too much money leaving the business or what type of scenario the business might face if there’s an unexpected and large expense that guts the business’ cash position. Tracking expenses on a monthly basis is one way to determine a company’s financial health. Estimating sales by starting with last year’s month-by-month figures is one way to start. Looking at credit and cash sales from a business’ monthly income statements provides historical reference. Examining both fixed and variable past expenses, specifically, is a good starting point. However, it’s important when projecting future sales and reasonable increases […]
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August 1, 2023
Published by Service2Client on August 1, 2023
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🖨 Print⏱ 4 min readAccording to the Internal Revenue Service (IRS) and the National Federation of Independent Businesses (NFIB), almost one-third of companies see penalties due to payroll issues. Understanding a few examples, according to the NFIB, of how companies can better comply and avoid penalties is essential to smoother operations. Underpayment of Estimated Tax by Corporations Penalty As long as there’s a reasonable expectation of at least $500 in estimated taxes owed, corporations are required by the IRS to file. If, however, a corporation doesn’t satisfy its estimated tax payments or pays them after their quarterly submission deadline, the IRS will assess penalties. This can occur even if the IRS owes filers a refund. The IRS recommends the easiest […]
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July 1, 2023
Published by Service2Client on July 1, 2023
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🖨 Print⏱ 3 min readManagerial accounting is a form of internal reporting that helps business owners and others involved in the organization’s decision-making. It looks at individual processes and products to see how they are functioning via practical data points. This is done in hopes of applying data analysis to improve the business’ operational efficiency. It is important to keep in mind the intended audience and data structure with regard to managerial accounting versus financial accounting. While managerial accountants analyze information, it is not subject to GAAP requirements; however, financial accountants must present company information according to GAAP standards – and such information is often intended for external consumers like investors or lenders. Measuring Inventory Levels One way that businesses […]
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June 1, 2023
Published by Service2Client on June 1, 2023
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🖨 Print⏱ 4 min readAccording to a 2022 Allied Market Research report, the size of the global forensic accounting market is forecast to increase in value to $11.68 billion in 2031, up from its 2021 estimated value of $5.13 billion. Allied Market Research puts this compound annual growth rate at nearly 9 percent (8.8 percent). This same report found that the Covid-19 pandemic saw an uptick in the need for forensic accounting skilled professionals and approaches. Forensic accounting is a specialization within the general accounting profession. Professionals in this specialized subset focus on allegations of financial fraud brought by individuals and businesses in the civil courts and government agencies in the criminal courts. Disputes can range from family members contesting […]
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May 1, 2023
Published by Service2Client on May 1, 2023
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🖨 Print⏱ 4 min readWhen it comes to businesses looking to mitigate risk, one concept that’s important to explore is reproduction costs. The first step is to distinguish between reproduction and replacement costs. Replacement cost refers to how much it would cost a company to replace an asset that will duplicate the performance of the beginning asset; however, it does not necessarily have to meet the same materials, specifications, etc. Reproduction cost refers to how much it would cost a company to reproduce the asset so that it’s constructed of the same materials, specifications, etc., based on current market prices. When looking to assess real estate accurately, the cost approach examines how much a builder would need to spend […]
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