16
Investment and Portfolio Management / Re: ডিএসইর অংশীদার হচ্ছে সেনজেন ও সাংহাই স্টক এক্সচেঞ্জ
« on: December 08, 2018, 12:19:26 PM »
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17
Branding / Re: 10 Examples of Brand Storytelling (with Data) that Hit the Mark
« on: December 08, 2018, 12:18:01 PM »
Informative.
18
Financial Accounting / What is the difference between operating cash flow and net income?
« on: December 08, 2018, 12:15:46 PM »
What is the difference between operating cash flow and net income?
Net income is earned revenues minus incurred expenses. It follows gross income and operating income and is a final monthly, quarterly or annual report. A net income statement is important for potential investors and creditors, but it does not always show the company's actual development. For instance, after a high one-time asset sale, monthly net income may be higher than operating income, followed by much lower quarterly net income.
Total cash flow is the operative cash flow plus the net working capital of the company. The net working capital is the difference between assets and liabilities. The operative cash flow reports inflows and outflows as a result of regular operating activities. The best demonstration of operating cash flow is the cash cycle, which converts accrual accounting based sales into cash.
Cash flow and net income statements are different in most cases, because there is a time gap between documented sales and actual payments. The situation is under control if the invoiced customers pay in cash during the next period. If the payments are postponed further, there is a larger difference between net income and operative cash flow statements. If the trend does not change, the annual report may demonstrate equally low total cash flow and net income.
Usually, rapidly developing companies report low net income as they invest in improvement and expansion. In the long run, high operating cash flow brings a stable net income raise, though some periods may show net income decreasing tendency.
Constant generation of cash inflow is more important for a company's success than accrual accounting. Cash flow is a better criterion and barometer of a company's financial health. Managers and investors can avoid many traps if they pay more attention to operating cash flow analyses.
Source: https://www.investopedia.com/ask/answers/012915/what-difference-between-operating-cash-flow-and-net-income.asp
Net income is earned revenues minus incurred expenses. It follows gross income and operating income and is a final monthly, quarterly or annual report. A net income statement is important for potential investors and creditors, but it does not always show the company's actual development. For instance, after a high one-time asset sale, monthly net income may be higher than operating income, followed by much lower quarterly net income.
Total cash flow is the operative cash flow plus the net working capital of the company. The net working capital is the difference between assets and liabilities. The operative cash flow reports inflows and outflows as a result of regular operating activities. The best demonstration of operating cash flow is the cash cycle, which converts accrual accounting based sales into cash.
Cash flow and net income statements are different in most cases, because there is a time gap between documented sales and actual payments. The situation is under control if the invoiced customers pay in cash during the next period. If the payments are postponed further, there is a larger difference between net income and operative cash flow statements. If the trend does not change, the annual report may demonstrate equally low total cash flow and net income.
Usually, rapidly developing companies report low net income as they invest in improvement and expansion. In the long run, high operating cash flow brings a stable net income raise, though some periods may show net income decreasing tendency.
Constant generation of cash inflow is more important for a company's success than accrual accounting. Cash flow is a better criterion and barometer of a company's financial health. Managers and investors can avoid many traps if they pay more attention to operating cash flow analyses.
Source: https://www.investopedia.com/ask/answers/012915/what-difference-between-operating-cash-flow-and-net-income.asp
19
Financial Accounting / How do net income and operating cash flow differ?
« on: December 08, 2018, 12:13:17 PM »
How do net income and operating cash flow differ?
Net Income
Net income is calculated by subtracting cost of sales, operational expenses, depreciation, amortization, interest, and taxes from total revenue. Also called accounting profit, net income is included on the income statement along with all revenues and expenses.
Below is the income statement for Exxon Mobil Corporation (XOM) from the company's 2017 10K statement:
Revenue or Total Sales = $237 billion (highlighted in blue).
Total costs and other deductions = $225.68 billion (in red). Total costs include manufacturing expenses of $34 billion, SG&A expenses of $10.9 billion and $19.893 billion in depreciation costs spread-out over years for the purchase of assets like property, plant, & equipment.
Profit or Net income = $19.8 billion (green) after subtracting costs, deductions, and taxes.
Source: https://www.investopedia.com/ask/answers/042115/what-difference-between-net-income-and-cash-flow-operating-activities.asp
Net Income
Net income is calculated by subtracting cost of sales, operational expenses, depreciation, amortization, interest, and taxes from total revenue. Also called accounting profit, net income is included on the income statement along with all revenues and expenses.
Below is the income statement for Exxon Mobil Corporation (XOM) from the company's 2017 10K statement:
Revenue or Total Sales = $237 billion (highlighted in blue).
Total costs and other deductions = $225.68 billion (in red). Total costs include manufacturing expenses of $34 billion, SG&A expenses of $10.9 billion and $19.893 billion in depreciation costs spread-out over years for the purchase of assets like property, plant, & equipment.
Profit or Net income = $19.8 billion (green) after subtracting costs, deductions, and taxes.
Source: https://www.investopedia.com/ask/answers/042115/what-difference-between-net-income-and-cash-flow-operating-activities.asp
20
Financial Accounting / What factors decrease cash flow from operating activities?
« on: December 08, 2018, 12:10:38 PM »
What factors decrease cash flow from operating activities?
1. Dwindling Net Income
2. Declining Sales or Margin Compression
3. Changes in Working Capital
1. Dwindling Net Income
2. Declining Sales or Margin Compression
3. Changes in Working Capital
21
Financial Accounting / Three Types of Cash Flow Activities
« on: December 08, 2018, 12:03:12 PM »
Three Types of Cash Flow Activities
Operating activities include cash activities related to net income. For example, cash generated from the sale of goods (revenue) and cash paid for merchandise (expense) are operating activities because revenues and expenses are included in net income.
Investing activities include cash activities related to noncurrent assets. Noncurrent assets include (1) long-term investments; (2) property, plant, and equipment; and (3) the principal amount of loans made to other entities. For example, cash generated from the sale of land and cash paid for an investment in another company are included in this category. (Note that interest received from loans is included in operating activities.)
Financing activities include cash activities related to noncurrent liabilities and owners’ equity. Noncurrent liabilities and owners’ equity items include (1) the principal amount of long-term debt, (2) stock sales and repurchases, and (3) dividend payments. (Note that interest paid on long-term debt is included in operating activities.)
Source: https://saylordotorg.github.io/text_managerial-accounting/s16-02-three-types-of-cash-flow-activ.html
Operating activities include cash activities related to net income. For example, cash generated from the sale of goods (revenue) and cash paid for merchandise (expense) are operating activities because revenues and expenses are included in net income.
Investing activities include cash activities related to noncurrent assets. Noncurrent assets include (1) long-term investments; (2) property, plant, and equipment; and (3) the principal amount of loans made to other entities. For example, cash generated from the sale of land and cash paid for an investment in another company are included in this category. (Note that interest received from loans is included in operating activities.)
Financing activities include cash activities related to noncurrent liabilities and owners’ equity. Noncurrent liabilities and owners’ equity items include (1) the principal amount of long-term debt, (2) stock sales and repurchases, and (3) dividend payments. (Note that interest paid on long-term debt is included in operating activities.)
Source: https://saylordotorg.github.io/text_managerial-accounting/s16-02-three-types-of-cash-flow-activ.html
23
Branding / Re: Why Place and Destination Brand Strategies Fail
« on: December 02, 2018, 05:01:44 PM »
Thanks.
24
Marketing – Magic of Marketing / Re: Link of SPSS tutorial (For beginners)
« on: December 02, 2018, 03:36:12 PM »
Thanks for sharing..
25
Financial Accounting / Why should an investor understand accounting?
« on: December 02, 2018, 03:27:12 PM »
Why should an investor understand accounting?
Learning How a Company Finances Their Operations
Another question that business accounting helps answer relates to the mix of debt and equity used to finance a company's operations. The ability to identify debt and equity is crucial in determining the company's value since the debt-to-equity ratio is commonly used in measuring a company's idiosyncratic risk. Although most information on debt and equity comes from the balance sheet, certain debt items require further digging and deep knowledge of business accounting.
For example, companies often choose to lease property instead of buying it. Under the U.S. GAAP, operating leases are not required to be included as a liability. However, operating lease payments are akin to debt payments, and investors may wish to treat the present value of operating leases as debt.
Source: Investopedia https://www.investopedia.com/ask/answers/042715/why-it-important-investor-understand-business-accounting.asp#ixzz5YVuHoSUs
Learning How a Company Finances Their Operations
Another question that business accounting helps answer relates to the mix of debt and equity used to finance a company's operations. The ability to identify debt and equity is crucial in determining the company's value since the debt-to-equity ratio is commonly used in measuring a company's idiosyncratic risk. Although most information on debt and equity comes from the balance sheet, certain debt items require further digging and deep knowledge of business accounting.
For example, companies often choose to lease property instead of buying it. Under the U.S. GAAP, operating leases are not required to be included as a liability. However, operating lease payments are akin to debt payments, and investors may wish to treat the present value of operating leases as debt.
Source: Investopedia https://www.investopedia.com/ask/answers/042715/why-it-important-investor-understand-business-accounting.asp#ixzz5YVuHoSUs
26
Financial Accounting / How should a change in accounting principle be recorded and reported?
« on: December 02, 2018, 03:24:53 PM »
How should a change in accounting principle be recorded and reported?
Recording and Reporting Change in Accounting Principle
Whenever a change in principle is made by a company, the company must retrospectively apply the change to all prior reporting periods, as if the new principle had always been in place, unless it is impractical to do so. This is known as "restating." Keep in mind that these requirements only impact direct effects, not indirect effects.
If the adoption of a new accounting principle results in a material change in an asset or liability, the adjustment must be reported to the retained earnings' opening balance. Additionally, the nature of any change in accounting principle must be disclosed in the footnotes of financial statements, along with the rationale used to justify the change. The FASB issues statements about accounting changes and error corrections that detail how to reflect changes in financial reports.
Read more: How should a change in accounting principle be recorded and reported? | Investopedia https://www.investopedia.com/ask/answers/102714/how-should-change-accounting-principle-be-recorded-and-reported.asp#ixzz5YVtkTM5y
Recording and Reporting Change in Accounting Principle
Whenever a change in principle is made by a company, the company must retrospectively apply the change to all prior reporting periods, as if the new principle had always been in place, unless it is impractical to do so. This is known as "restating." Keep in mind that these requirements only impact direct effects, not indirect effects.
If the adoption of a new accounting principle results in a material change in an asset or liability, the adjustment must be reported to the retained earnings' opening balance. Additionally, the nature of any change in accounting principle must be disclosed in the footnotes of financial statements, along with the rationale used to justify the change. The FASB issues statements about accounting changes and error corrections that detail how to reflect changes in financial reports.
Read more: How should a change in accounting principle be recorded and reported? | Investopedia https://www.investopedia.com/ask/answers/102714/how-should-change-accounting-principle-be-recorded-and-reported.asp#ixzz5YVtkTM5y
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Financial Accounting / What are the differences between a change in accounting principle and a change i
« on: December 02, 2018, 03:21:50 PM »
What are the differences between a change in accounting principle and a change in accounting estimate?
Change in Accounting Principle
Accounting principles are general guidelines that govern the methods of recording and reporting financial information. When an entity chooses to adopt a different method from the one it currently employs, it is required to record and report that change in its financial statements. A good example of this is a change in inventory valuation; for example, a company might switch from a FIFO method to a specific-identification method. According to the FASB, an entity should only change an accounting principle when it is justifiably preferable to an existing method or when it is a necessary reaction to a change in accounting framework.
Change in Accounting Estimate
Accountants use estimates in their reports when it is impossible or impractical to provide exact numbers. When these estimates prove to be incorrect, or new information allows for a more accurate estimation, the entity should record the improved estimate in a change in accounting estimate. Examples of commonly changed estimates include bad-debt allowance, warranty liability and the service life of an asset. There are different and less stringent reporting requirements for changes in accounting estimates than for accounting principles. In some cases, a change in accounting principle leads to a change in accounting estimate; in these instances, the entity must follow standard reporting requirements for changes in accounting principles.
Read more: What are the differences between a change in accounting principle and a change in accounting estimate? | Investopedia https://www.investopedia.com/ask/answers/102714/what-are-differences-between-change-accounting-principle-and-change-accounting-estimate.asp#ixzz5YVsjumnQ
Change in Accounting Principle
Accounting principles are general guidelines that govern the methods of recording and reporting financial information. When an entity chooses to adopt a different method from the one it currently employs, it is required to record and report that change in its financial statements. A good example of this is a change in inventory valuation; for example, a company might switch from a FIFO method to a specific-identification method. According to the FASB, an entity should only change an accounting principle when it is justifiably preferable to an existing method or when it is a necessary reaction to a change in accounting framework.
Change in Accounting Estimate
Accountants use estimates in their reports when it is impossible or impractical to provide exact numbers. When these estimates prove to be incorrect, or new information allows for a more accurate estimation, the entity should record the improved estimate in a change in accounting estimate. Examples of commonly changed estimates include bad-debt allowance, warranty liability and the service life of an asset. There are different and less stringent reporting requirements for changes in accounting estimates than for accounting principles. In some cases, a change in accounting principle leads to a change in accounting estimate; in these instances, the entity must follow standard reporting requirements for changes in accounting principles.
Read more: What are the differences between a change in accounting principle and a change in accounting estimate? | Investopedia https://www.investopedia.com/ask/answers/102714/what-are-differences-between-change-accounting-principle-and-change-accounting-estimate.asp#ixzz5YVsjumnQ
28
Financial Accounting / Recognized Vs. Realized Gains
« on: November 28, 2018, 02:31:36 PM »
Recognized Vs. Realized Gains
When you sell an asset, you may face federal income tax liability if you earn a profit. The Internal Revenue Service makes a distinction between recognized gains and realized gains. While a recognized gain may create a tax liability, the realized gain often determines the amount of tax you must pay. The IRS taxes capital gains earned from the majority of assets, but profits from certain assets may include tax exclusions.
source: https://smallbusiness.chron.com/recognized-vs-realized-gains-25871.html
When you sell an asset, you may face federal income tax liability if you earn a profit. The Internal Revenue Service makes a distinction between recognized gains and realized gains. While a recognized gain may create a tax liability, the realized gain often determines the amount of tax you must pay. The IRS taxes capital gains earned from the majority of assets, but profits from certain assets may include tax exclusions.
source: https://smallbusiness.chron.com/recognized-vs-realized-gains-25871.html
29
Financial Accounting / Do Deferred Gains Go on the Balance Sheet?
« on: November 28, 2018, 02:22:11 PM »
Do Deferred Gains Go on the Balance Sheet?
Deferred gains are profits that the business has not yet accepted the money. It is sometimes called unearned revenue, and while it represents a future asset, it is treated as a liability on the balance sheet. As a liability, the recorded deferred gains are listed on the right side of the balance sheet equation in liabilities. Understanding how the balance sheet works help clarify why gains are considered a liability until they are realized as an asset, thus gain.
Source: https://smallbusiness.chron.com/deferred-gains-balance-sheet-23624.html
Deferred gains are profits that the business has not yet accepted the money. It is sometimes called unearned revenue, and while it represents a future asset, it is treated as a liability on the balance sheet. As a liability, the recorded deferred gains are listed on the right side of the balance sheet equation in liabilities. Understanding how the balance sheet works help clarify why gains are considered a liability until they are realized as an asset, thus gain.
Source: https://smallbusiness.chron.com/deferred-gains-balance-sheet-23624.html
30
Financial Accounting / How to Classify Capital Gains on a General Ledger
« on: November 28, 2018, 02:20:46 PM »
How to Classify Capital Gains on a General Ledger
When a company sells an asset other than inventory for more than the original purchase price, it has a capital gain. There's no universal way to classify capital gains on a company general ledger. Instead, U.S. generally accepted accounting principles instruct companies to classify the gains based on the nature of the asset.
Source: https://smallbusiness.chron.com/classify-capital-gains-general-ledger-77810.html
When a company sells an asset other than inventory for more than the original purchase price, it has a capital gain. There's no universal way to classify capital gains on a company general ledger. Instead, U.S. generally accepted accounting principles instruct companies to classify the gains based on the nature of the asset.
Source: https://smallbusiness.chron.com/classify-capital-gains-general-ledger-77810.html