Installment Sales: Why Do We Use Them?
Why do we use installment sales? Installment sales are only used for financial reporting when there is no reasonable basis for estimating the degree of collection ability. Revenue recognition occurs...
View ArticleLifetime Value of a Customer, Part 1
All businesses on some level require the same evaluation. There must be a developed interest in their goods or service through business development activities, fulfill on sales that result from the...
View ArticleLifetime Value of a Customer, Part 2
In a previous blog post, the ratio Lifetime Value of a Customer against Cost of Acquisition was introduced. The concept effectively promoted the idea that the Gross Margin of new customers should be...
View ArticleWIP Accounting Schedule (Work In Progress)
In this blog post I will be discussing some of the main items of the WIP Accounting Schedule: Percentage of Completion, Job Cost, Earned Revenue, Backlog, Fade, and Percentage of Completion vs....
View ArticleUnderstanding Business’ Cash Position Through Liquidity Ratios
Cash is King. One of the classic sayings in business and one of the great “truths” is that cash truly is King. Cash presents businesses with many opportunities: it can be seen as the ultimate reward...
View ArticleUnderstanding Breakeven Analysis
Breakeven analysis is extremely important for appropriately assessing financial stability. Break even analysis provides management with the answer every owner wants to know: how much do we need to...
View ArticleUnderstanding the Cash Conversion Cycle Formula
The cash conversion formula takes into account the length of time between cash expenditures and cash receipts. The cash conversion formula is important to understand because it determines the average...
View ArticleWhat Makes Up Cost of Sales?
Cost of Sales is a special type of expense that is used to differentiate between the direct costs and general overhead expenses of a business. It is important to determine the correct Cost of Sales to...
View ArticleReturn on Investment – Advertising and Marketing Returns
I have a client that was questioning their current marketing budget. They were spending a lot of money to market and promote products but they had no way of determining the success of the spending....
View ArticleWhy I Focus On Not One Bottom line, But Three
This is a Forbes.com article written by Matt Garrett At Vanderbilt University, my then girlfriend (now wife) and I began a consulting firm selling art and related services to hotels. Juggling...
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