Times Interest Earned Ratio Formula + How To Calculate
Learn financial statement modeling, DCF, M&A, LBO, Comps and Excel shortcuts. The TIE’s main purpose is to help quantify a company’s probability of default. This, in turn, helps determine relevant debt parameters such as the appropriate interest rate to be charged or the amount of debt that a company can safely take on. A company’s […]
Times Interest Earned Ratio Analysis Formula Example
The cost of capital for issuing more debt is an annual interest rate of 6%. The company’s shareholders expect an annual dividend payment of 8% plus growth in the stock price of XYZ. When you sit down with the financial planner to determine your TIE ratio, they plug your EBIT and your interest expense into […]
What Is Shrinkage: How to Calculate Inventory Shrinkage
This can be done by tracking inventory more carefully, conducting regular inventory audits, and instituting policies and procedures to ensure that inventory is properly accounted for. Inventory shrinkage is also known as inventory loss, inventory variance, or shrink. It is the measure of lost or stolen inventory, which is a common problem in any business […]
Shrinkage in Business: Definition, Causes, and Impact
According to the National Retail Federation’s 2022 Retail Security Survey, shoplifting (of all kinds) is the biggest source of shrink. The best way to combat shrinkage is to know where yours is coming from. Shaun Conrad is a Certified Public Accountant and CPA exam expert with a passion for teaching. Clerical errors like this also […]
Accounting 101: Deferred Revenue and Expenses
This time we’ll look at one of the magazine subscriptions that Anderson Autos paid for. The magazine is called “Film Reel” and it is a national entertainment magazine. It focuses on content related to movies that are about to be released into cinemas. Accrued revenue are amounts owed to a company for which it has […]
Deferred Payment Option: Definition and Examples
Lenders typically reserve deferments for people who are undergoing some sort of financial hardship. Deferred revenue is a liability in your books because it is for goods or services you still owe to your customers. Record deferred revenue on your balance sheet as an asset until you incur the expense. After you incur the expense, […]
