Still, you can figure out the effective tax rate by using the rest of the information on the income statement. Along the calculations of determining net income, a company often publicly discloses net income prior to taxes. This calculation, often excluding debt service charges as well, is called Earnings Before Interest and Taxes (EBIT). After ...
The future value formula helps you calculate the future value of an investment (FV) for a series of regular deposits at a set interest rate (r) for a number of years (t). The future value calculation allows investors to predict, with varying degrees of accuracy, the amount of profit that can be generated by different […]
That number tells you that when you’ve factored in all the other employee expenses, you’re paying your employee $22.80 per hour to produce widgets. This example only deals with one employee, but you can scale it up to accommodate as many employees as you have participating in manufacturing products or providing services. Stated ...
A good contribution margin is one that will cover both variable and fixed costs, to at least reach the breakeven point. A low contribution margin or average contribution margin may get your company to break even. The variable costs to produce the baseball include direct raw materials, direct labor, and other direct production costs that […]
Thus, the concept of contribution margin is used to determine the minimum price at which you should sell your goods or services to cover its costs. On the other hand, net sales revenue refers to the total receipts from the sale of goods and services after deducting sales return and allowances. Remember, that the contribution […]
Common stock is the “default” type of stock, but it’s not the only type. There’s also preferred stock, which differs from common stock in its voting rights, dividend payment process and priority level in the case of company bankruptcy. One key thing to consider when choosing preferred stock is the dividend. Compare the ...