How to Account for Accretion
Whether it’s an individual investor or a business owner looking to increase their earning power, understanding how accretion works is essential for individual and business investors to make the correct decisions…
Understanding The Q Ratio
When it comes to evaluating a business, there are many ways to perform a valuation. One way to do so is to use the Q Ratio. Known as Tobin’s Q Ratio or simply the Q Ratio, this method looks at the proportion between the values…
Understanding Contribution Margin After Marketing
Contribution margin after marketing (CMAM) measures how much money is generated per unit retailed after factoring in a company’s variable costs, along with marketing costs.
How to Evaluate Accounts Receivables
According to the Federal Reserve Bank of St. Louis, collection agencies saw $16.28 billion in revenue in 2019. While revenues have declined somewhat in recent years, unpaid invoices are still big business. Accounts…
Understanding Depreciation Recapture
When it comes to businesses and asset depreciation, there are many types available, such as straight-line, units of production, double declining balance and sum of years digits. While these aren’t the only ones, they are…
Examining Differences Between Liquidity And Solvency
Liquidity looks at how well a company can handle paying wages, inventory and lending repayments via measuring its cash or quasi-cash levels. Put another way, it looks…
Understanding the Goodwill to Assets Ratio
The goodwill to assets ratio measures how much of a company’s total assets come from goodwill – an intangible asset like brand value or customer loyalty – and it plays a role in assessing the company’s overall value. It…
Cash Flow Available for Debt Service (CFADS)
When it comes to the risk of default, Moody’s found that during Covid-19, American businesses had a 7.8 percent chance of defaulting. This is compared to a low of 4 percent in 2021, but lower than the current 9.2 percent risk of…
Valuation Ratio Calculating the EV / 2P
When it comes to analyzing a company’s financials, there are many avenues we can take. One way is through multiples; calculating the EV/2P multiple is the focus of this analysis…
Defining Net Revenue Retention (NRR)
The subscription economy, according to Forbes, is expected to reach $1.5 trillion in revenue for businesses. With the potential likely realized this year, it’s vital to understand how it is tracked – and more importantly, how…