Accounting / July 19, 2018 / Ariyah Lang
As a refresher, a capital lease is one in which a lessee records the leased asset as if it purchased the asset using funding provided by the lessor. As a result, capital lease accounting under current GAAP is actually comprised of two transactions: A purchase of the underlying asset by the lessee AND a loan to the lessee from the lessor to fund the purchase of said asset.
Turnover Rates. Your business’s historical turnover rates are the first step in forecasting your growing working capital needs. You need to analyze your actual income statement and balance sheet to find out the following information How many days of inventory do I keep on hand (called inventory turnover)? How many days do customers take to pay me (called accounts receivable turnover)? How many days do I take to pay my vendors (accounts payable turnover)?.
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