An Introduction To The Income Statement
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The income statement is a measurement of a company's financial performance over a specific period of time. Discover its main components and how they work together.
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.
The cost of equity is the rate of return an investor requires from a stock before exploring other opportunities.
Float is money in the banking system that is briefly counted twice due to delays in processing checks.
Whether a company chooses FIFO or LIFO has important implications for the bottom line and for tax liability.
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.
Selling, general and administrative expenses (SG&A) are a company's total direct and indirect costs from selling its product or service as well as its total general and administrative expenses. The company reports its SG&A on the income statement.
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