Let's level up our CMA game together!  Today, let's dive into the balance sheet.  The difference between current and non-current items on a balance sheet lies in their liquidity and expected conversion to cash within a specified time frame. Here's what you need to know: - Current Assets: These are assets that are expected to be converted into cash or used up within one year or the operating cycle of the business, whichever is longer. **Examples of current assets**  include cash and cash equivalents, accounts receivable, inventory, prepaid expenses, and short-term investments.  - Non-current Assets (or Long-term Assets): These are assets that are not expected to be converted into cash or used up within the normal operating cycle of the business, usually beyond one year.  **Examples of non-current assets**  include property, plant, and equipment (PP&E), intangible assets such as patents and trademarks, long-term investments, and deferred tax assets Similarly, for liabilities: - Current Liabilities: These are obligations that are expected to be settled within one year or the operating cycle of the business, whichever is longer.  **Examples of current liabilities** include accounts payable, accrued expenses, short-term loans, current portion of long-term debt, and dividends payable. - Non-current Liabilities (or Long-term Liabilities): These are obligations that are not due for settlement within the normal operating cycle of the business, usually beyond one year.  **Examples of non-current liabilities** include long-term loans, bonds payable, deferred tax liabilities, lease obligations, and pension liabilities. In summary, current items on the balance sheet are those that are expected to be used up or settled within a year, while non-current items are those that are expected to last longer than a year. This distinction is important for understanding a company's liquidity, solvency, and long-term financial health.  Let's keep learning! 

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Decoding EBITDA: Your Guide to Core Profitability 🔍 Peel Back the Layers to Reveal Your Business’s True Financial Health. EBITDA isn’t just another financial acronym—it’s your lens to see how well your business is really performing. By zeroing in on earnings before interest, taxes, depreciation, and amortization, EBITDA cuts through the financial clutter to show you the pure operational profit. Here’s what you need to know: 🔍 What is it? EBITDA is a measure of profitability that ignores the impact of financing, taxes, and accounting practices, focusing solely on your business’s core earnings. 💡 Why it’s important: It gives you a straightforward look at how much cash your business generates from its core activities, making it a powerful tool for comparing businesses across industries. 🧮 How to calculate: Simply add back interest, taxes, depreciation, and amortization to your net income: Net Income + Interest + Taxes + Depreciation + Amortization = EBITDA Have you calculated your EBITDA recently? It might just give you the insight you need to take your business to the next level. Strategic Business Coaching, LLC #BusinessFinance #EBITDA #FinancialHealth #Profitability #BusinessGrowth

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This new Accounting Standards Update introduces significant changes in the accounting for credit losses on financial assets and considers historical experience, current conditions, and reasonable and supportable forecasts, unlike previous guidance which focused solely on what was "probable" to be collected. Learn more: https://bit.ly/3vCvSUt

Let's level up our CMA game together! Join me in learning something new every day. Today, let's dive into the balance sheet. A balance sheet is a financial statement that provides a snapshot of a company's financial position at a specific point in time. It presents the company's assets, liabilities, and shareholders' equity. Assets are resources owned by the company that have economic value and are expected to provide future benefits. Liabilities represent the company's obligations or debts that it owes to external parties. Shareholders' equity represents the residual interest in the company's assets after deducting its liabilities. The balance sheet follows the fundamental accounting equation: Assets = Liabilities + Shareholders' Equity. It provides valuable insights into a company's financial health, liquidity, solvency, and overall stability. Additionally, it is an essential tool for investors, creditors, and analysts to evaluate the company's performance and make informed decisions. Let's keep learning!