Understanding the Exchange Ratio
With more than $57 trillion in mergers and acquisitions, according to the Institute for Mergers, Acquisitions & Alliances, understanding…
Category: General Business News
Understanding Horizontal Analysis
Horizontal Analysis provides businesses a method to examine financial statement entries by looking at the documents’ number for a specific accounting time frame compared to the same length of a historical period for the same accounting line item…
Understanding the EV/2P Ratio
When it comes to raw materials, especially for fossil fuels, it’s essential to evaluate existing and potential production capabilities for such companies. Using the EV/2P Ratio is a powerful tool when evaluating fossil fuel-related…
Understanding Cash EBITDA
While Cash EBITDA isn’t recognized by generally accepted accounting principles (GAAP), it’s a way for company owners and investors to account for deferred revenue during valuation modeling. This financial metric…
Understanding Qualifying Dispositions
With 57 percent of public companies offering their workers employee stock purchase plans (ESPPs), according to the National Association of Stock Plan Professionals (NASPP), understanding how qualifying dispositions work is an essential…
Understanding the Equity Multiplier
Whether you are an investor, an owner or an internal financial analyst, understanding how the equity multiplier works and how to interpret it is a helpful skill.
Defining An Activity Cost Driver
An activity cost driver is anything that causes a company’s variable costs to either reduce or grow. Since measuring an activity cost driver is a way to streamline the administration of managing production costs, it’s…
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.