Artificial Intelligence in Finance & Accounting
Artificial Intelligence (AI) is one of the most rapidly emerging and progressive technologies globally. We can define it as “the ability of a digital computer or computer-controlled robot to perform tasks commonly associated with intelligent beings.” (Britannica, https://www.britannica.com/technology/artificial-intelligence) Over the next few years, AI will have significant influence not only in accounting and finance but […]
9 Best Practices to Simplify Your Accounting Month-End Close Process
An important financial event for any organization is the month-end close process. Whether the business entity you work with is a corporation, small business, or non-profit, closing the books is universally important. This activity indicates an organization’s revenue, debt, accounts payable, and profits. For newly minted accountants, the first-ever accounting month-end close process is a […]
First In, First Out (FIFO) Inventory Costing
The First In First Out (FIFO) is a method for asset management that ensures assets we produce or acquire first are the ones we use or sell first. Under FIFO, we include the oldest assets’ cost in the Cost of Goods Sold (COGS) line item on the Income Statement. How does FIFO work? FIFO supports […]
How to Analyze the Accounts Receivable Turnover Ratio
The Accounts Receivable Turnover ratio (AR T/O ratio) is an accounting measure of effectiveness. It is also known as the Debtor’s Turnover ratio, and we use it to gauge how effectively the company manages credits they extend to customers and collection. We calculate the ratio by dividing net sales over the average accounts receivable for […]
How to Perform a Cash Ratio Analysis in Excel
The Cash Ratio represents a measurement of the liquidity of a company. It evaluates the ability of the business to cover short-term obligations with cash and cash equivalents alone. It is particularly useful to creditors when deciding how much money they are willing to loan to a company. Suppliers also consider the ratio when assessing […]