7

So, here goes: Gross Profit = Revenue - COGS (Cost of Goods Sold) If you bought an orange for a dollar and sold it for two, you have one dollar of Gross Profit Operating Profit = Gross Profit - Labor - SG&A If you're business paid someone \$100 to sell 200 oranges (like above), you would have \$200 in Gross profit, and \$100 in Operating Profit (...


5

Instead of currency symbols, some of which are used by more than one currency as @HotLicks suggests, you may want to consider the three-letter currency codes used in most currency exchanges. Here is a list: https://en.wikipedia.org/wiki/ISO_4217#Active_codes.


5

Not sure an economist can answer this particular question about Escobar's wealth and not only because all the given estimates are uncertain. A more interesting question for an economist (or at least for me) would be: What is Escobar's (a drug firm) mark-up? Or what is the economic size of the international market for cocaine? The most serious source of ...


4

All assets which have a finite useful life are depreciated. For example, your patents or copyright might hold for 5 or 10 years but no more. Thus, it is quite coherent to reflect the loss of value through depreciation and amortization. Same goes for a software for example: in 5 years time, a software might be obsolete, so we need to reflect this in the ...


3

One possible circumstance relates to firms undertaking long term contracts (eg for building or engineering work). Where a contract is uncompleted at the end of a period, the firm may (depending on its accounting policies) include in its turnover an amount reflecting its assessment of the work in progress. Sometimes unforeseen difficulties in completing a ...


3

A December fiscal year end, which gives a first quarter of three months ending March 30, aligns the fiscal and the tax year. This can be very convenient and in the United States is sometimes required. In addition, some regulated firms like banks are required to prepare documents on calendar quarters regardless of the month of their fiscal year end, and it is ...


3

You are confusing your balance sheet with your income statement, and putting a few things in the wrong bins. The basic accounting identity is: $$ Assets=Liabilities+Owners' Equity$$ Assets are generally valued not at cost (or as you put it, "the price I have paid them on the first place"), but at either their hold-to-maturity value (i.e., the present ...


2

I disregarded the information about imports and subsidies because I assumed that GDE was calculated using the equation Y=C+I+G+X-M. This is where I went wrong. GDE is calculated as C+I+G, but to get GDP at market prices, I need to add nett exports.


2

A firm's Output $Y$ (in value-added terms, i.e. over and above the value of purchases of third-party services and materials) is distributed as reward to the factors of production. Denote $K$ the book value of the company's assets. Use the standard notation $L$ for payments to the labor/human capital input to production. Denote $r$ the capital rate of ...


2

You mean 26 pay dates per year, right? Then no, because a year is 365 days long and a 26 biweeks are $26 \cdot 14 = 364$ days long. Therefore any year that starts with a Friday (which is usually a pay date) should have 27 pay dates. However if Jan 1 is a holiday (depends on where you live), the paydate is probably moved to Dec 31 so the preceding year would ...


2

Gross profit = revenue - cost of goods sold (COGS) Operating Profit (also known as EBIT or operating income) = Operating Revenue - COGS - Operating Expenses - Depreciation & Amortization Net income (also known as net profit) = EBIT - Interest - Taxes Operating expenses: include rent, equipment, inventory costs, marketing, payroll, insurance and funds ...


2

They are not the same. Basic accounting equation: Assets = Liability + Shareholder Equity Assets refers to what the company actually owns: cash, property, inventory, etc. Assets are paid for in two major ways: debt (liability) and stock (equity). Essentially, everything a company owns is paid for by a combination of (1) getting loans from other entities ...


2

There are several issues here, but the three most significant are: The National Accounts treatment of the public sector, which is set out in international standards and controlled by the Office for National Statistics. This is what you might naturally look to if you wanted to compare the size of the UK's public sector with those of other countries, or its ...


1

Suggestion of @herr-k led me to this Wikipedia article: https://en.wikipedia.org/wiki/List_of_circulating_currencies. It lists all current currencies and their symbols.


1

Suppose McDonald's has 2 franchisees. Franchisee A under its current franchise arrangement has to pay \$100 a year of minimum rent until the current arrangement expires in 2025. Franchisee B, on the other hand, has to pay \$75 a year but its arrangement expires in 2019. The future minimum rent due to McDonald's in 2018 is $\$100 + \$75 = \$175$. This ...


1

@ThisIsNoZaku is correct, but I thought I should explain the mechanism. When you have a tax asset, you were required to pay a tax by the taxing authority before GAAP says the income happened. A tax asset, in GAAP terms, is a prepaid liability. When the tax rates fell and the income was realized, the prepaid tax cannot be recovered. It is gone for good. ...


1

The lower tax rate means that they will gain less benefit when they apply their deferred tax assets against their income. They have large amounts of these assets recorded on their balance sheets and are adjusting them to reflect the new, lesser value.


1

The Interest Rate is a more general term, and can cover all shorts of financial transactions where one expects by a contractual clause to get their money back plus "a little something" (I am not referring to the expected profit from an investment, where the "little something" is not a contractual obligation). So you can talk about "the interest rate of a ...


1

By issuing credit notes in the period higher in value than the invoices of the period. Typically, such credit notes correct mistakes or award overall discounts related to past periods, so they mess data up.


1

I don't really see why you would price an ETF at fair value and not at last market price, given that those funds are very liquid. But in either cases you need to have two distinct securities in your portfolio, as the two classes of shares that you own in the ETF bear different risks, and will yield different performances, due to the xrate.


1

It appears that you mix up the timing of invoicing with the timing of accrual of an expense or a revenue. There exist special Balance Sheet accounts that do not affect the P&L (with names like "Next-period Expenses" in the Assets side or "Next-period Revenues" in the Libailites/Equity side, depending on the country of course) which you use in order to ...


1

The answer is in the text of IAS 12, and basically amounts to "it's unreasonable to require it, and if we allow firms discretion in doing it, they will only do it when it's in their favor": The reliable determination of deferred tax assets and liabilities on a discounted basis requires detailed scheduling of the timing of the reversal of each temporary ...


1

"Double-entry" bookkeeping is the resulting methodology of the fundamental approach of Accounting science to what a productive mechanism does (be it a company or whatever): Accounting perceives productive entities as mechanisms to transform capital from one form to another, irrespective of what their economic goal is for doing this (profits, charity, ...


1

Depreciation is tax-deductible. The firm in question pays taxes. If depreciation increases, then taxes paid decrease. If taxes paid decrease, then cash flow increases. ceteris paribus


1

I offer the following reason why a business like Walmart may desire to have January end as its closing-date for the fiscal year: in anticipation of the high-season of Christmas, it is natural that inventories rise "abnormally", in order not to lose sales. Most probably Walmart has return-contracts with suppliers. So during January is when any products that ...


1

I'd like to read more on "intergovernmental guarantees", but I believe it's something similar to how the US government implemented the bailout. The 2008 stimulus of $700 bn was the right to spend this money over time. So, this amount entered government spending only gradually. (I think that's also what @BKay's quote says.) But as we found out here, the ...


1

I don't know of a full accounting in the Eurozone but Measuring the True Cost of Government Bailout (Block (2010)) provides a look at the on- and off-budget costs of the bailouts in the United States and finds they were substantially off-budget. Government intervention to assist individual businesses and industries during the 2008–2009 economic crisis ...


1

I don't think the term is very well defined. I think it depends on the context. I have maybe two possibilities. I'll try to provide references with each. Possible Definition 1 The first coincides with @Alecos' answer. The following is taken from the beginning of "The Over-Capitalization Effect with Diversification and Cross Subsidization," by Rozek, ...


1

"Stated Capital" is the nominal value (or "par" value) of all the outstanding shares of a company. When a company issues shares each has a nominal price, say EUR $1.00$. But of course they may be sold for more (as far as I know, it is forbidden to issue a share and receive an amount less than its nominal value. Afterwards of course, the share of a company ...


Only top voted, non community-wiki answers of a minimum length are eligible