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Category: Bookkeeping

Nov 23
What is the reorder point formula? Definition, calculations, and benefits

Having an adequate safety stock level means you’re covered when those unexpected scenarios pop up. It gets factored into your reorder point to make sure you’re always prepared. In the context of inventory management, lead time is the amount of time it takes for a new order to be delivered to your warehouse once you’ve […]

Jun 28
Retained Earnings Formula: Definition, Formula, and Example

A company’s beginning retained earnings are the first amount of retained earnings that the company has after its initial public offering (IPO). You calculate this number by subtracting a company’s total liabilities from its total assets. Finally, companies can also choose to repurchase their own stock, which reduces retained earnings by the investment amount. During […]

Mar 03
Break-Even Price: Definition, Examples, and How To Calculate It

What this tells us is that Hicks must sell 225 Blue Jay Model birdbaths in order to cover their fixed expenses. In other words, they will not begin to show a profit until they sell the 226th unit. For a service business, the units could be the company’s hours billed to clients. Dividing the fixed […]

Feb 17
Optimizing Working Capital Deloitte US

Then they added a buffer based on actual variability they had observed in demand and supply. In the end, they determined that they only needed to keep 30 days’ inventory. The 20-day gap between the incremental target and the clean-sheet target was worth tens of millions of dollars annually. Despite its size and focus, however, […]

Jul 12
Earnings per Share Formula EPS Examples and Tutorial

As with any fundamental metric, earnings per share on its own doesn’t define whether a stock is a buy or sell. You should use the Net Income after the deductions for Net Income to Noncontrolling Interests, Preferred Dividends, etc., (if they exist) because none of these go to to the common shareholders of the company. A company’s […]

Jul 06
How To Properly Use Reversing Entries

Then, when the bill comes in for $9,500, you record a new journal entry for $9,500 in consultant fees and accounts payable. Businesses also use reversing entries to delete erroneously recorded transactions. You can make transposition errors and other mistakes go away with a reversing entry. If accountants do not understand the nature of transactions, […]

Apr 12
How to write a financial plan for a bakery business

Automated late payment reminders save you from keeping track of who’s paid when. Activate the accounting software’s default settings or customize your own terms and message. Automate tasks like organizing expenses, tracking time and following up with clients, FreshBooks accounting software works hard for bakers, so they can rest easy. FreshBooks empower bakers to attract […]