Understand Financial Analysis – Page 4

IPO Printing Expenses: Detailed Breakdown With Examples

There are 6 cost categories associated with an initial public offering — accounting, legal, registration, miscellaneous bills, underwriting, and printing. Most of these are self-explanatory, but the old term “printing” is misleading. Before the 2000s, IPO “printing” costs referred to the cost of actual printed paperwork, such as registration filings, needed for an IPO. Now, […]

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Book Building IPO: Example Companies & How to Identify Them

Understand Financial Analysis

Companies “going public” have to make two big decisions: 1. how to price their stock for the public markets, and 2. how to list their stock on the public markets. Traditional paths for pricing involve hiring an investment bank, who discusses with its inner circle of investors about a good offering price. Companies who decide

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Dutch Auction vs Open IPO: Key Differences & Which is Better for Your Company

Understand Financial Analysis

If you’ve spend some time researching types of IPOs, you’ve certainly stumbled upon traditional IPO paths such as the fixed price and book building methods, which involve serious collaboration with underwriters and investment banks to determine the opening stock price. But some companies — notably Google — have started challenging the need for institutional involvement.

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Labor on the Balance Sheet: Wages Payable, Works in Progress, & Capitalized Expenses

Understand Financial Analysis

Labor can be a tricky topic in accounting journals, especially on the balance sheet. Most students learn that labor and wages are a cost item on the profit and loss statement (P&L). However, labor expenses appear on the balance sheet as well, and in three notable ways: wages payable, works in progress, and capitalized expenses.

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Is capital stock an asset? No, and Here’s Why It’s Confusing

Understand Financial Analysis

In the world of finance, one word can have many meanings. It is easy to get confused, whether you’re a beginner or seasoned professional. For example, the very word “asset” can mean money, a right to money, or simply an object that can be converted into money. Capital is another one of those many-purpose terms,

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Fixed Assets at Cost: Lost Asset Appreciation (& Examples)

Understand Financial Analysis

Accounting is funny about big ticket items. If a company buys a car, building, large machine, or other big purchase, the asset starts to lose value immediately. On the books (specifically, under the account “Fixed Assets at Cost”), fixed assets lose value at a hefty linear rate. In most cases, this “book value” is very

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Cash Flow Table: Definition, Excel Example, & Template

Understand Financial Analysis

Most companies agree that cash is king. However, in a world of accrual accounting — where revenue and costs are recorded when a service is delivered, rather than when money is transferred — it’s easy to lose track of cash. Moreover, it’s easy to loose track within individual departments. Cash flow tables help departments and

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Interest vs Profit: Difference Between Bank & Company Income

Understand Financial Analysis

Interest and profit are both results of the way in which organizations make money, but make no mistake: they are not the same. The challenge is that you cannot directly compare interest and profit because they’re separate ideas. By way of metaphor, it would be like comparing a window and a garage door; interest is

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Financial Objectives: what are they, who uses them, & why?

Understand Financial Analysis

Every organization has goals. In a competitive market, goals are a necessity for survival. But not all objectives are alike. One company objective may be to minimize layoffs during economic downturn. Another might be to open a store in a prestigious location. Some companies even set goals to get Super Bowl ads! These are examples

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Financial Analysis in Marketing: Example & Excel Template

Understand Financial Analysis

At the end of the day, what good is marketing if it doesn’t turn a profit? Financial analysis in marketing allows marketers to understand the impact of their strategic decisions on the financial results of the company. Marketers familiar with financial terminology and concepts such as return on investment (ROI) have a better chance of

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