In any business, you have two kinds of costs: direct costs and indirect costs. A direct cost is the cost of producing goods or services (e.g. raw materials and labor). Direct costs are only reported when the goods are sold. … Read More
Cash is like air; profit is like food. You need cash all the time, but you can survive—for a while—without profit. Certainly, profit is essential for a business to grow. If there is no profit being generated over the long-term, … Read More
Watch Out for the Ludic Fallacy: Don’t Let it Spoil Your Business Simulation Game Experience Written by Nikolai from Income|Outcome Humans have been modeling life with games since at least the First Egyptian Dynasty and have been using what they … Read More
Today’s word involves your profit—sort of. “Gross margin” is one of those tricky terms defined differently by every business. But at a basic level, “gross profit” is the money earned from a sale minus the direct costs of that sale … Read More
There are three main pillars of financial reporting. We’ve already discussed income statements and balance sheets. But what is a statement of cash flow? The broad purpose of a statement of cash flow is to show where cash in your business … Read More
“Income statement” is a common term, but are you aware of everything that comprises it? An income statement is a history book of the sales, costs, and expenses over a given period of time. Publicly traded companies are required to … Read More
What is a balance sheet? The Balance Sheet is a statement of what you have (in the business) and where the funding came from. It adds together all the assets in the business (“what you have”), and adds together all … Read More
The statistics on the earnings of entrepreneurs in the U.S. might give pause to anyone thinking of starting a business. An article by Bloomberg Business revealed that U.S. entrepreneurs make 35% less than employees. Recently, we discussed the statistic with … Read More
Depending on your position in your company, you might see a lot of sales revenue coming into the organization. But when will the the company actually able to use it? Today’s finance phrase can help you find out. Days sales outstanding … Read More
What skills do you suppose law firms most desire from their associates? Knowledge of constitutional law? Negotiating ability? Organization? The answer is none of the above. In a study conducted by Harvard Law School, 124 attorneys were asked to rate … Read More