The formula is: Debt ratio =Total liabilities Total assets 1.Accrual basis of accounting:the accountant records the transaction even if no cash is exchanged a. required by GAAP 2.Cash basis of accounting:cash receipts are treated as revenue and cash payments are treated as expenses 3.Accounting...
Accruals are revenues earned or expenses incurred that impact a company's net income even though cash hasn't yet changed hands. Accrual accounting is preferred by GAAP. more Internal Rate of Return (IRR): Formula and Examples The internal rate of return (IRR) is a metric used in capital ...
The next step is to calculate the difference between the net income and the operating and investing cash flow (NI difference) using the formula below: NI difference = net income - operating cash flow - investing cash flow Hence, the NI difference for Company Alpha is: $1,500,000 - $500...