Accounting

Perpetuity is an infinite series of periodic payments of equal face value. In other words, perpetuity is a situation where a constant payment is to…

The perpetuity concept refers to an infinite series of identical cash flows. It is most commonly applied to a discounted cash flow analysis, where this…

Accounts receivable are the amounts owed to a company by its customers, while accounts payable are the amounts that a company owes to its suppliers.…

The key difference between forward P/E and trailing P/E is that the forward measurement is based on the next projected 12 months of earnings, while…

The treasury stock method is used to calculate the net increase in shares outstanding if in-the-money options and warrants were to be exercised. This information…

The reverse treasury stock method is used to calculate the effect of a put option on the diluted earnings per share calculation of a publicly-held…

The essential difference between direct costs and indirect costs is that only direct costs can be traced to specific cost objects. A cost object is…

EBITDA Coverage Ratio is a solvency ratio that measures a company’s ability to pay off its liabilities related to debts and leases. It compares the…

The EBITDA coverage ratio measures the ability of an organization to pay off its loan and lease obligations. This measurement is used to review the…

Dual Aspect Concept, also known as Duality Principle, is a fundamental convention of accounting that necessitates the recognition of all aspects of an accounting transaction.…