Small Business Doctor

The economic entity principle implies that when a parent company acquires a subsidiary, their financial statements should be consolidated, because they are now a single economic entity. How does an accountant actually produce these consolidated financial statements? Read on. Acquisition by Cash, Equity or Both The purchase price is the total amount paid by the […]

Accounting Treatments for an Investment in Equity Securities An investment in equity securities occurs when a small business purchases some equity or ownership interest in another company. How this investment is treated in the accounting books depends on the extent of control the investing company has over the investee company. When there’s no significant influence […]

EBITDA is often treated as a proxy for operating cash flow by finance professionals. While EBITDA is an important finance metric, it is not the same things as operating cash flow. For small businesses, the difference between them is especially important. Here’s an example. Windmill Bakery had a great year. Their income statement shows the […]

There are 2 types of cash flow that help a financial manager assess the financial condition of a small business. The first is operating cash flow, and the second is free cash flow. Operating cash flow is earnings before interest plus depreciation minus taxes. You can find this directly on a small business’s cash flow […]

Lehjr is an app that analyzes the audited statements of every publicly held American corporation since 1980. We provide fundamental economic and accounting analysis through more than 75 financial statement metrics for every year reported. All data is derived directly from SEC reports. Analyze their audited statements using tried and true metrics! Don’t fall for […]