by TheBusinessProfessor | Feb 23, 2025 | Managerial & Financial Accounting & Reporting
What is a Coverage Ratio?Coverage ratio refers to a group of financial ratios that measures the ability of the company to meet its financial obligations such as debt, dividends, or interest. A higher ratio is an indication that the company has a greater ability to pay...
by TheBusinessProfessor | Feb 23, 2025 | Managerial & Financial Accounting & Reporting
What is Allocation Rate?The allocation rate is the amount of overhead cost per hour of labor that goes into the production of a unit. The calculation is as follows:Total Overhead x Total Labor Hours = Overhead Allocation Rate This calculation applies equally if you...
by TheBusinessProfessor | Feb 23, 2025 | Managerial & Financial Accounting & Reporting
What is an Unqualified Audit?An unqualified audit is a form of an audit of a company’s account and finances done by an independent auditor. Usually, audits are appraisals of a company’s status and how compliant it is to generally accepted accounting...
by TheBusinessProfessor | Feb 23, 2025 | Managerial & Financial Accounting & Reporting
What is an Unqualified Opinion?An unqualified opinion is otherwise known as an unqualified report or a clean report. It is the judgment of an independent auditor about a company which states that the financial records and statements are fairly and accurately presented...
by TheBusinessProfessor | Feb 23, 2025 | Managerial & Financial Accounting & Reporting
What is Horizontal Analysis?Horizontal analysis is a process used in financial statements such as comparing line items across several years for the purpose of tracking the firms progress and historical performance. In other words, analysts use this type of analysis to...
by TheBusinessProfessor | Feb 23, 2025 | Managerial & Financial Accounting & Reporting
What is a Modified Cash Basis?Modified cash basis is a term in accounting that combines two major bookkeeping practices: accrual and cash basis. With a cash basis, you recognize a transaction when there is either outgoing or incoming cash. So, the cash receipt from a...
