Financial Operations Hub

Learn how a statement of operations helps businesses forecast their financial health–and whether or not it’s different from an income statement.

Certified checks may make payments more secure. When and how do you use them, and are they different from cashier’s checks? Read our full guide.

Does your business need a controller or CFO for its planning and financial reporting? Learn about the roles and responsibilities of each.

The bargaining power of suppliers is one of Porter’s Five Forces, and is the concept that suppliers can apply pressure to companies by lowering product quality or availability, or raising product prices. 

Supply and demand is a microeconomics theory describing the effect that the available level of goods or services has on pricing, buying volume, and subsequent production level. As supply decreases, sellers increase prices, and the level of buyer demand decreases.

Backward integration is an M&A strategy that can reduce cash, add debt, or dilute shareholders through new share issuance.

With good business credit, companies can gain advantages. They may receive business credit card perks. With better business credit, you’ll receive lower interest rates on loans. Insurance rates will be lower.

Marginal cost is important because businesses can determine their optimum production level for making a profit before costs will increase and monitor increases in variable costs.

PaaS, or platform as a service, is a cloud computing service that includes the ability to both create and develop apps, and features the hardware necessary to make it happen, like virtual servers.

Achieving positive net income is a goal that most companies and small business owners aim to reach. But some startups and hypergrowth companies operate at a loss for several years as they invest heavily to capture market share in their niche. 

ACH loans work for some companies with subpar credit. A business applies for an ACH loan with a lending company that offers ACH loans. The lender performs due diligence on the ACH loan applicant’s business but doesn’t require collateral. The applicant’s business credit score isn’t considered for ACH loan approval.

With adequate payment and credit history, your business may qualify to get bank loans and interest-free trade credit from other suppliers. Some of these vendors for business credit will offer early payment discounts. Trade credit improves cash flow. 

Will your company have enough profits (and cash generated) from business operations to pay all interest expense due on its debt in the next year? Use the times interest earned ratio (TIE), also known as interest coverage ratio (ICR), to make an assessment.

The contribution margin can be calculated as an overall number for your company, on an individual product basis, or as a contribution margin ratio metric that divides the contribution margin by revenue to express it as a percentage.

A multi step income statement is more detailed than a simple single step income statement. It provides insights that financial statement users need when reading a profit and loss statement prepared using GAAP accounting standards. 

Best practices for new conglomerate mergers and other types of M&A should be applied in the integration process and pursuit of cost synergies from combining the companies. These M&A best practices will help the companies achieve a smooth transition.

Internal rate of return is a capital budgeting calculation for deciding which projects or investments under consideration are investment-worthy and ranking them. IRR is the discount rate for which the net present value (NPV) equals zero (when time-adjusted future cash flows equal the initial investment).

Net 30 vendors offer 30-day credit terms, often combined with early payment discounts like 2/10 net 30. A 2/10 net 30 payment term gives customers the option to receive a 2 percent discount when paying an invoice within 10 days or pay the full amount of the invoice for the vendor to receive a payment within 30 days.