Learn how to evaluate free cash flow to gauge a company's financial health and recognize accounting tricks. Understand FCF's role in investment decisions today.

General accepted accounting principles (GAAP) recommend that businesses use an accrual method of accounting. This means that the income statement reflects expenses and income earned but not yet ...

Learn what every business owner needs to know about financial accounting, accounting software and financial statements.

Organizations should consider using a cash-flow method of accounting, recording only income and expenses that are received and paid and setting aside “any transactions that do not involve cash, such ...

Cash basis accounting records when cash actually changes hands in a transaction, providing a real-time view of your financial position that reflects the actual cash flow of a business or individual.

Over a span of what is now quite a few years, the two of us have been privileged to be academic accountants. Part of the job description requires us to think a lot about ideas that practitioners don’t ...

Your cash flow determines whether your company can stay in business. Income is high as long as sales are good; cash flow is only high if customers are paying you. If not enough cash comes in, you ...

Ever since we uncovered and articulated the paradigm that we call Quality Financial Reporting, we have been committed to advocating a new attitude among managers. We have asserted that they will soon ...

When accounting and economics collide … watch out! A case in point deals with the use of interest rate swaps by bank asset/liability managers. Interest rate swaps are primarily used to transform ...

No matter what happens with General Electric Co.'s dividend, investors will still have to grapple with the fact it is nearly impossible to tell how much of its earnings are backed by cash. Until ...