Running A Profitable Business Calculating Breakeven

Starting a business can be pricey. Breakeven analysis and cost-volume-profit analysis will help you understand when-and ... (more)

Starting a business can be pricey. Breakeven analysis and cost-volume-profit analysis will help you understand when-and if-your business will start to recover those costs and begin making a profit. Understanding your breakeven point will help you to determine how much you need in revenue to keep your business going. Accounting professors Jim and Kay Stice walk through the breakeven equation, and cover types of costs, contribution margin, breakeven point, and net income. They also explain what each term means, and the importance of each, and offer examples from popular real-world companies. Want to learn more? Learn about three types of accounting-financial, managerial, and income tax-in their Accounting Fundamentals course. (less)

Revenue recognition determines when a sale should be recorded: This month or next month? This year or next year? This se... (more)

Revenue recognition determines when a sale should be recorded: This month or next month? This year or next year? This seems like an easy question until you consider situations in which a company sells a package of goods and services for one joint price, aka multi-element transactions. But without recognizing revenue, a company can't hope to report any profit. Accordingly, company management is typically under great pressure to recognize revenue as soon as possible. Want to understand these concepts better? Join professors Jim and Kay Stice as they introduce the theory, practice, and implications of revenue recognition. Together they demonstrate how this seemingly innocent accounting topic can turn a reported profit into a reported loss, sometimes with multibillion dollar implications for company values. (less)

The cash flow statement is one of the three primary financial statements, but because it has only been around since 1988... (more)

The cash flow statement is one of the three primary financial statements, but because it has only been around since 1988, many traditional business analysis models don't include it. And improper cash flow can mean the death of a business. This course reviews all the important topics you need to know for proper cash flow management and analysis. Professors Jim and Kay Stice review the difference between net income and operating cash flow, show how to interpret a cash flow statement, introduce the Jim Stice operating cash flow matrix, and describe some real cash flow catastrophes and triumphs at companies such as General Motors and Home Depot. Want to hear more from Jim and Kay? Learn about all three types of accounting-financial, managerial, and income tax-in their Accounting Fundamentals course. (less)