Method used to determine when revenues and expenses (with associated assets and liabilities) are recognized in the accounts of a firm, and reported in its financial statements. In accrual basis accounting, for example, revenues are recognized when earned and expenses are recognized when incurred, ...
Level of inventory that must be maintained to meet current sales volume or consumption, while taking order lead time into account.
Accounting reports compiled in conformity with the provisions of GAAP, and necessary for the fair evaluation of operations of an entity. For businesses, the balance sheet, income statement (profit and loss account), and the cash-flow statement make up the set of basic financial statements.
Ratio that indicates basic profitability of assets and is useful in comparing firms with different degree of leverage. Formula: Earnings Before interest and tax ÷ Total assets.
A measure of a company's performance calculated by dividing its net earnings by its total number of outstanding shares. Also referred to as simply Earnings Per Share or EPS.
The relationship between income, expenses, and the ownership of the company. Income should equal the amount of expenses plus what owner puts up for the business.
Cost projection performed early in a program or project to serve as the reference point for all subsequent tracking, comparing, and auditing.
Year used as the beginning or the reference year for constructing an index, and which is usually assigned an arbitrary value of 100.
