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Business Ratios (Introduction)


How does a business investor compare a small railroad line serving only a few states to a large railroad like Union Pacific? Answer: Ratios! Ratios are used in business to compare companies of different sizes within the same industry. The goal is to [...]

Bookkeeping – Tracking Invoices (Lesson 36)


Now that I’m done with the employee payroll series, Lessons 30-35, it is time to explain sales.   There are five lessons for this section of daily operations. They are as follows: Tracking Invoices  – Lesson  36  (this lesson) [...]

Working Capital Cycle


The college textbook definition of working capital is current assets minus payables and accrued expenses.  The term explains the dollar value of flexibility a business operation has to take advantage of immediate opportunities or endure sudden or [...]

EBITDA – Drawbacks


This is Part III in a 3-part series.  Please read Parts I and II before continuing: EBITDA – Part I  standard formula and income statement adjustments EBITDA – Part II  balance sheet impact There are several business financial [...]

EBITDA – Buyer Beware (Case Study)


In the article EBITDA the fundamentals of Earnings Before Interest, Taxes, Depreciation and Amortization were introduced.   In general EBITDA is commonly used with the market comparable valuation approach.   In that article it was illustrated how [...]

Double Taxation – Not an Issue in Small Business


In the world of big business corporate earnings are taxed twice under the Internal Revenue Code.   The first layer of taxation occurs with the traditional corporate income tax.   The second tier of taxation happens when dividends are issued to [...]
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