Accounting / July 16, 2018 / Collins Barber
Pretax Income: Another carefully watched indicator of profitability, earnings garnered before the income tax expense is an important bullet in the income statement. Numerous and diverse techniques are available to companies to avoid andor minimize taxes that affect their reported income. Because these actions are not part of a company's business operations, analysts may choose to use pretax income as a more accurate measure of corporate profitability
Activity-based costing (ABC) is mostly used in the manufacturing industry since it enhances the reliability of cost data, hence producing nearly true costs and better classifying the costs incurred by the company during its production process.
If the stock does poorly, however, the investor won’t be able to convert the security to stock and will only have the yield to show for his or her investment. But unlike stock, convertible bonds can only fall so far – provide the issuing company remains solvent – since they have a specific maturity date at which time investors will receive their principal. In this sense, convertible bonds have more limited downside than common stocks.
Reconciliation is an accounting process that uses two sets of records to ensure figures are correct and in agreement. It confirms whether the money leaving an account matches the amount that's been spent, and making sure the two are balanced at the end of the recording period. The purpose of reconciliation is to provide consistency and accuracy in financial accounts.
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