Present Value Calculator Find PV of Single Sum
As shown in the future value case, the general formula is useful for solving other variations as long as we know two of the three variables. According to these results, the amount of $8,000, which will be received after 5 years, has a present value of $4,540. In order to get the value that you […]
Nominal and Effective Interest
Calculating the effective annual interest rate for yourself lets you compare offers to find the best deal. Whether you’re borrowing money for a meaningful purchase or setting aside savings for your future goals, an account’s interest rate will affect how much you pay or earn. EAR calculations usually does not consider the impact of taxes […]
How to Record a Prepaid Expense
Treating prepaid expenses as assets also enables effective budgeting and cash flow management. By recording them on your balance sheet, you have a clear overview of your future obligations and can allocate funds accordingly. It helps you avoid liquidity issues and ensures that you have sufficient resources to cover your advance-paid expenses when they become […]
What Is a CPA Certified Public Accountant ?
Those earning the CPA generally end up as an accountant of some sort. That is, they put together, maintain, and review financial statements and related transactions for companies. Many CPAs file tax forms or returns for individuals and businesses. Those who earn the CPA credential distinguish themselves by signaling dedication, knowledge, and skill. CPAs are […]
Cash Flow to Capital Expenditures CF to CapEX Explained
Get instant access to video lessons taught by experienced investment bankers. Learn financial statement modeling, DCF, M&A, LBO, Comps and Excel shortcuts. With business expansion, it becomes more likely you will use capex to invest in long-term assets. If that’s the case, leasing the asset instead of purchasing it outright may be more cost-effective with […]
Why is depreciation on the income statement different from the depreciation on the balance sheet?
Depreciation is considered to be an expense for accounting purposes, as it results in a cost of doing business. As assets like machines are used, they experience wear and tear and decline in value over their useful lives. Keep in mind, though, that certain types of accounting allow for different means of depreciation. Let’s assume […]