The Receivables Aging (or Ageing, if you prefer British English) report is a tool that lists all unpaid customer balances by pre-defined date ranges (buckets). It shows the relationship between open invoices and their due dates. It is the primary tool to determine overdue balances for collection. It’s useful for Read more…
Recently, we looked at how to Perform a One-Way Analysis of Variance in Excel. In today’s article, we will take that a step further and a look at a Two-Factor ANOVA. The Two-Way Analysis of Variance (ANOVA) is a statistical test to evaluate the difference between the means of more Read more…
Flux Analysis is a type of comparison technique that helps us understand the changes in a company’s financials from period to period. It is shortened from Fluctuations Analysis and is also sometimes called Horizontal Analysis. We use the method to evaluate the fluctuations in accounts over time. We usually express Read more…
The Market Value of Equity of the company, also known as Market Capitalization, is the total monetary value of the firm’s equity. We calculate it as the current stock price multiplied by the number of outstanding shares. Therefore the MVE continually changes, as these two values are quite volatile. Analysts Read more…
The Analysis of Variance (ANOVA) has many varieties, but in essence, it has the purpose of evaluating whether factors are associated with any outcome values. And factors are categorical variables we use to group the outcome variables. In this article, we will not be focusing on the underlying statistical principles Read more…
Seasonality is a characteristic of time-series where the data has predictable and somewhat regular fluctuations that repeat year over year. It is safe to assume that any pattern of data changes over one-year periods represents seasonality. It is usually driven by weather or commercial seasons. We have to differentiate the Read more…
In finance terms, consolidation refers to the incorporation of the financial statements of all subsidiaries into the financial statements of the parent company. Consolidation of financial statements requires the parent company to integrate and combine all its financials to create a standard-form income statement, balance sheet, and cash flow statement, Read more…
There’s a widespread assumption in investing that more risk equals increased potential returns. The theory behind the Efficient Frontier and Optimal Portfolios states that there’s an optimal combination of risk and return. The theory relies on the assumption that investors prefer portfolios that generate the most substantial possible return with Read more…
The core underlying principle of IAS 36 Impairment of Assets is that an asset’s carrying value in the financial statements of the company should not exceed the highest amount the business can recover through its use or sale. The standard applies to all assets for which there are no impairment Read more…
With a reach in e-commerce, cloud computing, digital streaming, and artificial intelligence, Amazon is now one of the largest corporations in the world. Analysts often refer to it as one of the most influential economic forces in the world. Alongside Google, Microsoft, and Apple, Amazon is considered one of the Read more…
