The company owes a provider $5,000 and decides to issue a 90-day note payable to settle the debt. On October 1st, 2024, the company borrows $10,000 from a bank at an interest rate of 6% per annum, with the loan to be repaid in full after one 12 months. The financial institution requires the company …
The internet Revenue balance on an earnings statement is calculated as gross Income minus all contra-revenue objects like Gross Sales Returns, Allowances and Discounts. The reverse of the revenue contra accounts Sales Reductions, Returns and Allowances are expense contra accounts Buy Discounts, Returns and Allowances. Deferrals contain delaying the popularity of certain revenues or expenses …
A company that has a very high ratio may find it difficult to obtain new loans or may be obligated to pay higher interest rates squeezing the company’s profit margins. Higher debt to asset ratios may also mean the company can be at risk of insolvency. On the other hand, a risk-tolerant investor might view …
