Category Archives for "Topics"

Gross profit margin – Meaning & Formula

Gross profit margin is one of the profitability ratios used to gauge the general profitability of a firm. This ratio represents the relationship between gross profit and net sale of a firm. The main usability of this ratio is to measure the effectiveness of firm to generate profit out of its sale. Gross profit margin is […]

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Deduction – An important step of O2C process

Deduction is one of the important steps in order to cash cycle which is the complete process, every business enterprise follows. This step comes into picture when an invoice has been raised and sent to customer which the customer does not pay in full. The personnel involved in this process then raises a new invoice […]

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Days sales outstanding – Meaning & Calcualtion

Days sales outstanding (DSO) is the calculation of average number of days which a company takes in collection of its account receivables. This is an important element of order to cash cycle and it increases the cash flow of company. DSO is used to check how many days it takes to collect the amount of […]

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Credit Memo – Definition & Reasons

Credit memo (short form of credit memorandum) is a document which is issued by the seller to buyer for adjustment of amount for an invoice. The document can be issued for any of the below reasons: Reasons for issuing credit memo: For not delivering the goods or services. Product is returned by the buyer To […]

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Employee stock option plan v/s Employee stock ownership plan

Employee stock option plan and employee stock ownership plan are considered as one but these two terms are very different. Employee stock option plan v/s Employee stock ownership plan: Employee stock option plan Employee stock option plan is a contract between a company and its employees that gives employees the right to buy company’s shares […]

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