EBIT and EBITDA: Measures of operating performance EBIT is Earnings Before Interest and Taxes. EBITDA is Earnings Before Interest, Taxes, Depreciation and Amortization. Analysts and managers take these measures from
A quick measure of competitiveness Analyzing gross profit can be a valuable way for investors (and journalists) to better understand how an entity is competing in its industry. An analysis
Consolidated statements: Information goldmines The word ‘consolidated’ in financial statement titles signals that subsidiary company financials are added to parent company financials. Large economic entities such as General Electric consist
Investment Accounting Last week we explored the accounting for debt securities. Like investment in debt, many entities invest substantial sums of wealth into equity securities. Let’s explore the accounting for
Investment Accounting Most entities maintain an investment portfolio that includes bonds, shares of stock and derivative securities. Entities maintain investments for a myriad of reasons including investing extra cash until
Controversy with intangible asset accounting Many capital market participants are dissatisfied with intangible asset accounting. The crux of the issue: Intangible assets are the most valuable assets for many entities
You can discover numerous business article topics by analyzing business activities, such as property, plant and equipment, then comparing your analysis with managers’ representations about the business. It isn’t unusual
Articles Based on New Accounting Standards When the Financial Accounting Standards Board revises a standard, which they have been doing frequently, numerous potential business article topics result. Interest in FASB-standard-related
Lease Accounting is Changing Recently the Financial Accounting Standards Board approved a new lease accounting standard U.S. public entities will adopt starting in 2019. This shift creates an urgent need
Earnings Per Share (EPS) Capital market participants probably watch, analyze and discuss earnings per share more than any other financial measure. Managers talk about EPS when they announce earnings and
What Is It? Why Analyze It? Often managers announce current earnings results, discuss their business initiatives or talk about other interesting aspects of the entities they manage. While their comments
Accounting goodwill is often misunderstood Accounting goodwill is an asset shown on the balance sheet. It has a specific definition under generally accepted accounting principles (GAAP) that most investors and
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