Accounting

EBITDA Margin

EBITDA margin is the ratio of a company’s EBITDA (earnings before interest, taxes, depreciation and amortization) to its net revenue. It converts the absolute value of EBITDA to a ratio that makes comparison across time and between different companies easier.

EBITDA

EBITDA stands for earnings before interest, taxes, depreciation and amortization. It is worked out by adding taxes, interest expense and depreciation and amortization to net income. It is a measure of standardized operating performance because it excludes the effects of differences in capital structure, taxation and accounting estimates of different companies.

Cumulative Preferred Stock

Cumulative preferred stock (also called cumulative preference shares) is a class of preferred stock whose dividends accumulate if they are not paid in any year and must be paid in future before any dividends are paid to common stockholders.

Excel SYD Function

SYD is an Excel function that calculates the depreciation expense under the sum of the years digits method.

Financial Ratios

Financial Ratios are indicators computed as a proportion of one financial value to another highly relevant financial value. They are used to analyze financial position i.e. liquidity and solvency, and financial performance i.e. profitability and efficiency of a company.

Excel DDB Function

DDB is an Excel function that calculates the depreciation expense on an asset under the double declining balance. DDB stands for double declining balance, a magnified form of accelerated depreciation method.

Excel DB Function

DB is an Excel function that calculates the depreciation expense in a period under the declining balance method, an accelerated depreciation in which the depreciation expense is highest in initial year and declines over time.

Fixed Assets

Fixed assets (also called capital assets or property, plant and equipment (PPE)) are operational assets that generate economic benefits for a business over a long-term period.

Excel SLN Function

SLN is an Excel function that calculates the depreciation expense to be charged on an asset under the straight line depreciation method. As the name suggest, straight-line method charges depreciation equally over the useful life of the asset.

Revenue Expenditure

Revenue expenditure is expenditure which is expensed out in the period in which it is incurred. It is not recorded as an asset on balance sheet because it is expected to benefit the company only in the period in which it is incurred.