Business Calculations & Accounting: Video Series

In order to calculate gross profit, take the net sales and subtract the cost of sales. Find out how gross profit is essentially revenue minus the cost to produce that revenue help from two accountants in this free video on business calculations and accounting.

Return on equity is calculated by taking the net income and dividing it by the shareholder's equity, or the total amount of money the shareholder's have put into the company. Use return on equity to measure the efficiency of business management with help from two accountants in this free video on business calculations and accounting.

When a small business goes to a bank to qualify for a loan, the bank will look at several financial ratios, such as assets to liabilities and how much money is being asked compared to home much money will be put in individually. Find out how a business uses financial ratios with help from two accountants in this free video on business calculations and accounting.

A default risk ratio is important for a small business because a bank will look at this to determine the level of risk associated with a possible loan. Learn about default risk ratios against zero risk ratios with help from two accountants in this free video on business calculations and accounting.

Working capital refers to how much money a business has to spend after they 've paid all of their bills. Take current assets minus current liabilities to figure out working capital with help from two accountants in this free video on business calculations and accounting.

In order to calculate market growth, compare the change of one period to the change of a subsequent period of time. Discover how market growth is the amount of the market that a product is capturing compared to previous years with help from two accountants in this free video on business calculations and accounting.

Dividend payout ratio applies to businesses that pay dividend to their stockholders, and it is based on how much a company decides to pay out to these stockholders. Find out how a company's board will decide how much they're going to pay out with help from two accountants in this free video on business calculations and accounting.

Cost basis is calculated by eliminating any kind of commissions that would normally be included in what was sold or what was paid. Find out why commissions don't factor into cost basis calculations with help from two accountants in this free video on business calculations and accounting.

For small manufacturers, marginal profit is important, because it represents the amount of profit that would result from selling additional units. Find out how to increase marginal profit by pushing out more units with the same equipment with help from two accountants in this free video on business calculations and accounting.

A sales margin is the percent of profit that is being made off of an item that is being sold. Find out how sales margins are calculated by taking the cost of an item, including all of the overhead, and dividing this by the item's selling price with help from two accountants in this free video on business calculations and accounting.

When calculating a capitalization rate, look at the rate of return of property that is well-produced on an owner's investment. Analyze which deals are the best for a company by calculating capitalization rate with help from two accountants in this free video on business calculations and accounting.

Calculating total revenue is simple, as it is requires multiplying the total number of items sold by the cost of the items sold. Look at total revenue during price changes with help from two accountants in this free video on business calculations and accounting.

The compound growth rate of a company is usually associated with stocks, and it represents the average amount that a value increases each year. Use compound growth rate to compare stocks with help from two accountants in this free video on business calculations and accounting.

Operating cash flow is different than cash flow in that it doesn't involve things like taxes and insurance payments that can't be used in a business. Find out how operating cash flow is essentially the total amount a company has made, plus the depreciation and minus the taxes, with help from two accountants in this free video on business calculations and accounting.

The break-even point is what a company needs to calculate in order to determine how much they need to sell to break even. Find out why companies have to cover overhead expenses with the money made on items sold with help from two accountants in this free video on business calculations and accounting.

Direct labor costs only include the labor that it took to make goods or perform services, and these costs do not include storage or accounting costs. Discover why manufacturers and contractors must have a good understanding of direct labor costs with help from two accountants in this free video on business calculations and accounting.

In order to calculate inventory turnover, take the total cost of the goods sold and divide that by the current value of the inventory in a store. Learn about how to calculate inventory turnover for a grocery store with help from two accountants in this free video on business calculations and accounting.

In order to calculate sales ratio, or sales receivable turnovers, take the accounts receivable and divide them by the total revenue. Discover how sales ratios can get muddied in contracting work with help from two accountants in this free video on business calculations and accounting.

The difference between an intrinsic value and a given value is that the intrinsic value is what a person can make back on a product at any time, despite what he may think the product is worth. Find out why intrinsic value is often less than a given value with help from two accountants in this free video on business calculations and accounting.

In order to calculate earnings per share, take all of the profits of a company after taxes and divide this by the total number of common shares. Find out why the money that goes into preferred stock holds usually has to be removed from net profits before calculating earnings per share with help from two accountants in this free video on business calculations and accounting.

When companies figure depreciation, they usually use accelerated depreciation and figure it into their taxes. Discover how a car can often represent accelerated depreciation with help from two accountants in this free video on business calculations and accounting.

In order to calculate efficiency ratio, examine the cost of power being put out and divide that by the cost of putting power in. Find out how home appliances can have different efficiency ratios with help from two accountants in this free video on business calculations and accounting.

Calculating a debt to equity ratio means looking at total liabilities and dividing them by the amount of money that the owners have put in to see if there is enough money to do business. Examine how a business is financing its assets through a debt to equity ratio with help from two accountants in this free video on business calculations and accounting.