It may be optionally disclosed in the notes to the financial statements. The interest rate of a loan or savings can be "fixed" or "floating." Floating rate loans or savings are normally based on some reference rate, such as the U.S. Federal Reserve (Fed) funds rate or the LIBOR (London Interbank Offered Rate). Normally, the [...]

Using standard costing on direct materials, a business can also plan for future sales and predict profitability under the assumed conditions. Direct material cost fluctuates a lot from unstable purchasing conditions and unpredictable manufacturing controls. The manufacturing costs are uncertain as they are affected by production processes and purchases of raw materials. Businesses allocate the [...]

Examples include loan origination fees and interest on money borrowed. Expenses are recorded in the books on the basis of the accounting system chosen by the business, either through an accrual basis or a cash basis. Under the accrual method, the expense for the good or service is recorded when the legal obligation is complete; [...]

The number of years over which a business writes off a capital expense varies based on the type of asset. These are expenses that are not material enough to be a line item in the income statement. With QuickBooks, you can sync your business credit cards and debit cards to the app, so all your [...]

You also have a business loan, which isn’t due for another 18 months. Depreciation is calculated and deducted from most of these assets, which represents the economic cost of the asset over its useful life. All of the above ratios and metrics are covered in detail in CFI’s Financial Analysis Course. After enrolling in a [...]