GAAP

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Learn more about the generally accepted accounting principles, standards and procedures that companies use to compile their financial statements.


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  1. Operating Profit

    Operating profit is the profit generated from the core business of a company before accounting for interest and taxes.
  2. Current Assets

    Current assets are all of the assets a company uses to fund its daily operations. These are the assets the company could convert into cash within a year in the normal course of business.
  3. Cost of Equity

    The cost of equity is the rate of return an investor requires from a stock before exploring other opportunities.
  4. Float

    Float is money in the banking system that is briefly counted twice due to delays in processing checks.
  5. Inventory: FIFO, LIFO

    Whether a company chooses FIFO or LIFO has important implications for the bottom line and for tax liability.
  6. The Debt-Service Coverage Ratio (DSCR)

    The Debt-Service Coverage Ratio (DSCR) is a simple way to analyze whether a company can adequately manage its borrowing costs. The ratio helps banks evaluate the credit worthiness of an organization that is applying for a loan. It also tips off investors to companies carrying a debt level that could be destructive.

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