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Introduction Amortization, in financial and accounting terms, involves spreading payments over multiple periods for loans or allocating the cost of intangible assets over their useful lives. This article will explain the basic terms and show calculations and examples of different kinds of amortization. This guide is also related to our articles on understanding journal entries
Read moreProfit margin, a key indicator of a company’s financial health, is calculated by dividing net income by revenue and expressing the result as a percentage. This metric highlights how effectively a company converts sales into profits. This guide will help you understand how to calculate profit margin and how to interpret it. This guide is
Read moreThe break-even point is where your sales equal your costs no profit, no loss. It’s crucial because it shows how much you need to sell to start profiting. The formula is: Break-Even Point (in sales units) = Fixed Costs / (Selling Price per Unit – Variable Cost per Unit) But what does it mean and
Read moreRunning a small business means keeping a close eye on your money – both what’s coming in and going out. Without this, you might run short on cash or miss chances to grow. Bank reconciliation is your go-to tool for staying on top of your finances. This guide will make bank reconciliation simple, showing you
Read moreYou’ve landed on our comprehensive guide to understanding the nuts and bolts of how to read a balance sheet. Understanding your balance sheet helps you see the clear picture how your hard work and decisions are shaping the financial stability and growth prospects of your business. Understanding your balance sheet is also related to understanding
Read moreCash flow is one of the most important metrics to track in your businesses. Without solid cash flow you’ll be struggling to fund payroll, pay your vendors and lenders, and continue operations. Cash flow statements are used to gauge this metric. At their core, they show your cash balance at the beginning of a period,
Read moreFor any startup aiming to grow, understanding your burn rate is essential. This guide will help you grasp how to calculate and manage your burn rate, helping prevent your startup from running out of money too soon. Here’s what we’ll go through Burn Rate Basics Preparation for Calculating Burn Rate Calculating Gross Burn Rate Calculating
Read moreYou found the Rigits guide on how to do cash flow forecasting! Cash flow forecasting is about predicting your cash inflows and outflows over a certain period, enabling you to plan for future growth, manage debt, and ensure you can cover your expenses. This guide is designed specifically for small business owners, breaking down the
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