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Questions tagged [accounting]

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What are some good examples of goodwill related to cash generating unit (Ias36/IFRS)? [closed]

I'm new on this platform . I'm working on a presentation of CGU cash generating unit and goodwill . goodwill is two types one: goodwill related to all CGUs and second: goodwill related to each CGU ....
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109 views

Why intuitively does Break-even point $= \dfrac{\text{Total fixed costs}}{\text{Selling price per unit} − \text{Variable cost per unit}}$?

p. 100. Accounting: A Very Short Introduction (2014). I understand the green sentence beneath, but not the fractional formula for BEP containing CPU in red? What's the intuition for the latter? ...
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3answers
45 views

What is the maximum number of characters in a currency symbol?

In the program I am writing, I need to show a currency selector. I would like it to display currency symbols. For this, I need to know what is the longest, in characters, currency symbol (or rather ...
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2answers
104 views

Why would minimum rent under franchise arrangements for McDonald's decrease year by year?

I am working on a project regarding the refranchising strategy of McDonald's and came across this piece of data in their 2014 annual report. My understanding of minimum rent is that its a fixed amount ...
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2answers
60 views

How does the EBQ formular come out?

I figured out how the economic order quantity (EOQ) formula comes out. I know it is quite similar with economic batch quantity (EBQ), sometimes termed economic production quantity (EPQ). I just don't ...
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75 views

Why some companies are reporting loss due to the new US tax law?

From http://uk.businessinsider.com/bank-of-america-fourth-quarter-earnings-q4-2018-1?r=US&IR=T: Like the other big banks, Bank of America took a hit from the recently enacted tax law, writing ...
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1answer
74 views

Why wasn't the wage of the entrepreneur included in explicit costs?

I was solving an economic problem (I was calculating explicit and implicit costs) and noticed one interesting thing: In the said problem, the entrepreneur set himself the wage of 10 000 rubles AND in ...
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37 views

Why are share repurchases particularly accretive?

From the "Manual of Ideas"... VALUE CREATION VIA BUYBACKS Share repurchases tend to be particularly accretive in the case of companies generating cash from operations while trading below tangible ...
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1answer
2k views

Interest Rate vs. Borrowing Rate - Difference

I have never studied economics so the question might be very basic one and would need understandable answer: I would like to know the difference between Interest Rate term and Borrowing Rate term? As ...
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2answers
504 views

Can a firm have a negative turnover during a period of time?

Can a firm have a negative turnover during a period of time? I'm asking this because I couldn't find any details on the web. I am working with a data table that holds a lot of firms and their ...
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54 views

Confusion about Balance sheet equation and sum of the cashflows

I was solving a business case I had at school where i just needed to compute the cashflows (CF). Once I have done so I wanted to check that my calculations are all good by verifying that the following ...
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1answer
249 views

Negative expenditures in public budgets

I need to better understand the concept of negative expenditure in UK public spending. The definition says Receipts classified as negative public expenditure receipts are netted off, and hence ...
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2answers
445 views

How could Pablo Escobar earn so much money?

I read it's about 30 billion. But I read there were 6 million users in 1985. Let's say he gets 10 percent of the sales price, it means each person paid 50000 dollars for cocaine. It sounds way too ...
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1answer
214 views

Securities traded in different currency

Excuse me if this is not the site to ask this question but I read in meta that you have a accounting tag so here we go. If I made a buy of an ETF in two different exchanges with different currencies ...
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2answers
2k views

What is the difference between gross, operating, net profit and EBIT(DA)?

What is the difference between the following accounting measures, if any? Gross profit Operating profit Net profit/income EBIT EBITDA
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1answer
50 views

Definition of market to book value?

What is the difference between (market value of equity/book value of equity) ratio and (market value of assets/book value of assets) ratio? In my opinion both measure fairly the same? Is this correct?...
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1answer
16 views

Contribution Margin [closed]

W LTD wishes to attain a before tax-net profit equal to $20\%$ of sales revenue. Variable costs are $60\%$ of sales and fixed costs are $360,000$. Calculate the dollar amount of sales necessary for ...
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2answers
404 views

How is the matching principle implemented with double entry accounting? [closed]

I understand that the accounting matching principle requires incurring the expense in the same period as the revenue. But I'm confused how one would go about doing this in double entry accounting. ...
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1answer
557 views

Return on Assets vs Return on Investment [closed]

1) Is Return on Investment same as Return on Assets? There are so many different definition in books so I am now confused... 2) Is ROA = Profit before taxes/Total Assets or Profit after taxes/Total ...
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2answers
153 views

What are the economic consequences of discounting deferred tax liability?

I was wondering why the IAS prohibits companies from discounting their deferred tax items? Are there any particular economic reasons for implementing such prohibition? Thank you!
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1answer
34 views

In a bi-weekly payroll cycle, there are only ever 26 pay dates, correct?

In a bi-weekly payroll cycle, there are only ever 26 pay dates, correct? It never jumps to 27 or falls to 25? I'm asking this question in a leap year, and I know that calculating the first pay ...
2
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1answer
38 views

Estimating the cost of an assett that needs to be replenished [closed]

I am working with hard drives. For simplicity, let's say all drives have the same capacity, 1TB and all cost $100. They typically last about 4 years, when they need to be replaced. They drop in ...
3
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1answer
57 views

Why do banks need to write-off the debt against Shareholders capital invested

I have seen the basic equation that rules this system: $$ Assets = Liabilities + Equity $$ @Alecos Papadopoulos has a really great answer that totally makes sense for this question. But, I would ...
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1answer
62 views

Depreciating companies intangible assets [closed]

Companies intangible assets are something which is not physical e.g. Patents, copyrights etc. How can we depreciate companies intangible assets and why it is done?
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1answer
1k views

How does depreciation affect the cash flow in a tax-paying company?

I came across a question in first year's finance book.The question is: For a tax-paying firm, an increase in ______will cause the cash flow from assets to increase. A. Change in net working capital ...
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2answers
82 views

Why does Walmart (SYMBOL:WMT) have its Q1 2015 end April 30 instead of March 30

The Walmart 10-Q form covers the period for the three months ending April 30th while other companies post their first quarter reports for the three months ending March 30th. Why does Walmart end one ...
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0answers
132 views

Semi Annual Deposit that earns 5% Compounded Quarterly

I was asked: A man planned to endow 1000000 USD to his son on his son's 21'st birthday. How much is his semi-annual deposit in a special account that earns 5% compounded quarterly if the first ...
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1answer
112 views

Assets, Liabilities, Equity [closed]

I am writing a business plan based on some old notes from a master in economics. However I am I bit confused. Can you please confirm the following is right? (above all what's marked in bold) Assets: ...
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2answers
76 views

Have the Greek bailouts been included in state budgets Eurozone members?

A lot of people (mainly journalists and politicians) say that Eurozone taxpayers pay for the Greek bailouts. On the other hand, a lot of economists say that those money have not been added in the ...
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55 views

Project Financing Evaluation and accounting

While evaluating the whole entrerprise value of Falck Renewables using the discounted cash flow method I end up with a negative continuing value and economic profit due to the negative spread between ...
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2answers
413 views

If assets = liabilities + equity, what do we mean by overcapitalization?

Overcapitalization doesn't seem to have a clear-cut definition. For some it seems to deal with the ratio of current output (Y) over optimal output (Y*). A company would then be overcapitalized if Y &...
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1answer
6k views

What is “Stated-capital”?

What is Stated Capital? I have found some definitions on the Google, but I have not been able to comprehend it from this definitions. Could somebody explain it to me?
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2answers
760 views

A national accounting calculation

The question that I am trying to answer is as follows: For a given year, South Africa's Gross Domestic Expenditure (GDE) is R 3 251 414, imports are R 987 781, and exports are R891 562. The table ...
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1answer
48 views

Understanding Leveraged Buyout

There is company A, which has Assets = \$100, Equity = \$50, Debt = \$50. I, Ant, found a new company, company B. I personally invest 10 in this company, and I find people who lend me \$50. Assets = \...