By Shreesha
Cost of Goods Sold (COGS) represents the direct costs incurred to manufacture a product or deliver a service. These costs vary with production or sales volume and exclude indirect operating expenses such as marketing, administration, and finance costs. Gross Profit…
Revenue appears to be the simplest line item in the income statement, but it is often one of the most judgment-intensive. Because revenue is a primary measure of business performance, even small changes in management assumptions can materially affect reported…
Since accounting is based on the accrual concept, accounting earnings often differ significantly from the cash that actually flows into and out of the business. ACTUAL Cashflows (Not Cashflow From Operations) Adjustment Why it is needed (+) Non-cash expenses (Depreciation, Amortization) These…
Situation Which Is Greater? Reason Credit sales Earnings > Cash flow Revenue before cash Increase in Receivables Earnings > Cash flow Cash not collected Revenue Recognition from Prior Advances Earnings > Cash flow No new cash Situation Which Is Greater?…