answersLogoWhite

0

What else can I help you with?

Continue Learning about Accounting

Is amortization of discount on investment in bonds added or subtracted in converting net income to the net cash flow?

Amortization of discount is added back to net income as there is no actual cash outflow due to amortization and that's why it is added back to cash flow from operating activities.


Why you add back depreciation and amortization to net income?

Depreciation and amortization are non-cash expenses that reflect the gradual reduction in value of tangible and intangible assets respectively. Adding them back to net income is essential for understanding a company's true cash flow and operational performance, as these expenses do not impact the actual cash generated during the period. By excluding them, investors can get a clearer picture of the company's financial health and its ability to generate cash for reinvestment or distribution.


Is amortization on the cash flow statement?

Amortization itself don't reduce the cash flow from business that is not part of cash flow statement because it is just the allocation of intangible asset cost to profit and loss statement and not actual cash inflow or outflow.


What is the difference between dividends and interest expense?

Interest Expense is usually calculated by (Carrying Value of Liability*Yield Rate * Time). Carrying Value is the actual present value of the liability (including discounts earned, etc) Interest Expense is the money that actually goes out of the firm. Interest Paid is calculated by (Face Value of Liability*Interest Rate * Time). Interest Paid is the fair-value of dues from the firm, but is not the actual value of the liability. Interest Expense is the amount reflected in the books of the firm, and is usually higher than Interest Paid. This is because Interest Expense often includes the cost of discount amortization(this is necessary when the bond/other liability was gained at a discount. The amortization is worked into the formula above, and hence gives an amount higher than interest paid. This gives the total interest expensed by the Company.) Hope this helps. Cheers


Why people use balance sheet?

people use balance sheet to find out the actual performance of company so that they may decide to invest in company.

Related Questions

What are amortization schedules?

Amortization schedules are used when detailing an amortizing loan. They lay out how much and when you will pay off your debt. Specifically an amortization schedule deals with the percentage of the actual loan you will be paying off as compared to the interest per payment.


What is an amortization home loan?

On a traditional loan the interest is compounding monthly. With amortization the monthly payment is split up equally between the interest and the actual house payment.


Is amortization of discount on investment in bonds added or subtracted in converting net income to the net cash flow?

Amortization of discount is added back to net income as there is no actual cash outflow due to amortization and that's why it is added back to cash flow from operating activities.


Why depreciation and amortization are treated as non cash items?

Depreciation an amortization are treated as non cash items because the actual amount of depreciation can not be known in cash terms..the depreciation does not lead to any inflow ore outflow of cash ....the amounbt of depreciation is jst deducted frm the actual value of the asset


Why you add back depreciation and amortization to net income?

Depreciation and amortization are non-cash expenses that reflect the gradual reduction in value of tangible and intangible assets respectively. Adding them back to net income is essential for understanding a company's true cash flow and operational performance, as these expenses do not impact the actual cash generated during the period. By excluding them, investors can get a clearer picture of the company's financial health and its ability to generate cash for reinvestment or distribution.


What generates the actual images that appear on the monitor?

Colors, tard.


Is amortization on the cash flow statement?

Amortization itself don't reduce the cash flow from business that is not part of cash flow statement because it is just the allocation of intangible asset cost to profit and loss statement and not actual cash inflow or outflow.


What is repetition tone?

The actual sound in a steady pitch that a particular frequency (repetition) generates.


Explain the core actual and augmented products of the educational experience that universities offer?

Explain the core actual and augmented products of the educational experience that universities offer?


What is the amortization schedule mortgage?

Amortization schedule mortgages are mortgages in which a person makes regular payments, usually monthly, to pay off a loan or mortgage. It is used by calculating the amount of a payment that goes toward the interest and how much goes toward the actual principal. It is used for determining how much of a payment goes toward paying off the principal.


Do the actual results deviate from what was expected If so explain how?

whats the meaning accurately expected results and actual results


Is the actual surface of a work of art?

yes it is it is hard to explain though