Category: Accounting

How to Produce Realistic Sales Projections

2016 has flown by and we are already in the fourth quarter! As we wrap up the year in just over a month, strategic planning for 2017 is happening in businesses across the world. As the person responsible for the bottom line, your job as a financial leader is quite simply to improve profits and cash flow.

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Shareholders’ Equity Definition

Shareholders’ Equity Definition The Shareholders’ Equity Definition is one of the three primary components of the balance sheet: assets, liabilities, shareholders’ (or owners’) equity. These three components comprise the well-known accounting equation of assets = liabilities + shareholders’ equity. This equation is important when beginning to think about what shareholders’ equity means for a business. The

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What is your business worth?

So, you’re considering selling your business… Whether it’s to pursue new opportunities or to get out while you can, you need to start thinking about your business from a valuation standpoint. Even if you don’t intend to sell your business in the near future, building a business to be sellable is a sound strategy. So,

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Cloud Computing: The Good, The Bad, & The Ugly

As I sat in my car, stuck in Houston traffic, I looked around and saw many other people stuck in a similar situation – frustrated, impatient, and banging their heads against the wheel. How easy would it be to never go into work, avoid traffic, and just stay at home or work at a local coffee shop

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Optimistic Projections

By publishing overly-optimistic projections, your company could be at risk for internal financial problems, misleading investors, miscalculating inventory and staff, and more. As we reach the halfway point in the year,  it’s time to revisit whether your company has realistic or optimistic projections.  Are your sales projections still on target?  Now is a good time

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Goodwill Impairment

See Also: Goodwill Accounting Term Fair Market Value Asset Market Value vs Asset Book Value Intangible Assets Goodwill Impairment Definition Goodwill impairment is goodwill that is now lower in value than at the time of purchase. Goodwill is an intangible asset that sellers are willing to pay for; brand, reputation, a large customer base, strong

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ROE (Return on Equity)

See Also: Return On Equity Example Return on Asset Financial Leverage Gross Profit Margin Ratio Analysis Return on Equity Analysis Fixed Asset Turnover Analysis Return on Equity (ROE) The return on equity, or ROE, is defined as the amount of profit or net income a company earns per investment dollar. It reveals how much profit a company

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Fair Market Value

See Also: Adjusted EBITDA Asset Market Value vs Asset Book Value Valuation Methods Goodwill Impairment Fair Market Value Definition The Fair Market Value definition is the price a specific property, asset, or business would be purchased for in a sale. A company’s fair market value should be an accurate appraisal of its worth. Calculating Fair

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Adjusted EBITDA

See Also: EBITDA Valuation Calculate EBITDA Valuation Methods EBITDA Definition Multiple of Earnings Adjusted EBITDA Definition Adjusted EBITDA is a valuable tool used to analyze businesses for the purposes of valuation and potential acquisition. Many also call it Normalized EBITDA because it systematizes cash flow and deducts irregularities and deviations. Use adjusted EBITDA as an

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A Forward-Thinking Driven Business

We are halfway through 2016 and, as technology rapidly progresses, the expectation for financial leaders to be practicing forward-thinking driven business is growing. It’s easy to fall into a habit of valuing historical data over forward-looking information.  So how can you go from being historically-minded to forward thinking? First things first… Would you drive a car

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Collection Effectiveness Index (CEI)

See Also: CEI vs. DSO Key Performance Indicators (KPI’s) How Does a CFO Bring Value to a Company? 5 Stages of Business Grief Collection Effectiveness Index (CEI) The Collection Effectiveness Index, also known as CEI, is a calculation of a company’s ability to retrieve their accounts receivable from customers. CEI measures the amount collected during a time period to the

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Normalized Earnings

See Also: Key Performance Indicators (KPI’s) Collection Effectiveness Index (CEI) How Does a CFO Bring Value to a Company? Multiple of Earnings Continuous Accounting: The New Age of Accounting Budgeting 101: Creating Successful Budgets Normalized Earnings are adjustments made to the income statement in preparation to show potential buyers of the company. When making these

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