Operating leverage is the ratio of a business’s fixed costs to its variable costs. This ratio is often used when forecasting sales and determining appropriate prices. As can be seen from the example, the company’s degree of operating leverage is 1.0x for both years. As a business owner or manager, it is important to be...

We will also see the calculation of the degree of operating leverage for an alternative formula considered an ideal calculation method. Yes, DOL can be used to compare the operational risk of companies within the same industry, helping investors identify firms with higher or lower financial risk profiles. If you have the percentual change (period...

As a result, the accounting industry has sought ways to automate a previously strenuous manual process. The pressure of SOX is coupled with the perennial need to mitigate erroneous reconciliation in the process. Accountants typically perform an account reconciliation for all their asset, liability, and equity accounts. This process involves reconciling credit card transactions, accounts...

Using accounting software will make it much easier to reconcile your balance sheet accounts regularly. There are several steps involved in the account reconciliation process, depending on the accounts that you’re reconciling. That’s why account reconciliation remains a key component of the financial close process. If there are any differences between the accounts and the...

Hourly employees are paid for actual hours worked, while salaried employees receive a fixed amount. Overtime regulations also vary, with hourly employees receiving overtime pay for extra hours worked. Reducing payroll errors and discrepancies can be achieved through the implementation of automated systems, providing regular employee training, and utilizing Certified Public Accountant error tracking and...

These will include all tax contributions your company is responsible for withholding and remitting to the relevant authorities. In this case, we’ll need to account for state-based requirements in addition to standard federal tax obligations. Managing employer payroll taxes can be one of the most complex and high-stakes tasks on any HR professional’s list. Since...