Fixed charge coverage ratio (FCCR) measures a company’s ability to cover its fixed expenses from its earnings. Lenders may evaluate this as one of several factors in determining whether you qualify for a loan, as well as what interest rate and loan terms you qualify for. A fixed charge coverage ratio above 1.2 is required…
What is
Borrowing Base: What It Is & How to Calculate [+ Calculator]
Borrowing base is a figure that refers to the largest loan amount you can get from a lender. It applies to secured loans and is calculated by taking the lender’s advance rate (sometimes also referred to as its loan-to-value limit) and multiplying it by the value of the collateral. As an example, if you have…
What Is a Subsidiary Ledger & What’s Included in It?
A subsidiary ledger, also called a subledger, is a specialized accounting record that groups transactions from the general ledger (GL) by something of interest, like customer, vendor, or inventory. The total of all the subsidiary ledgers must equal the total of the GL account that they support. While the GL provides a high-level overview of…
What Is 1244 Stock and How Are Losses Reported?
Section 1244 stock is the first $1 million of stock issued by qualified corporations to individuals or partnerships as described in section 1244 of the IRS code. Losses on 1244 stock can be reported as ordinary losses instead of capital losses upon disposition.
Stock is ordinarily considered a capital asset, which would result in a capital loss if the stock was disposed of after a decline in value. Being able to take an ordinary loss on disposal of stock results in preferred tax treatment for 1244 stock. The ordinary loss would be claimed by filing Form 4797, and…
Minimum Wage Exemptions & FLSA Overtime Exemptions
Most employers are legally required to pay a certain minimum wage to their employees (at least $7.25 an hour to comply with federal laws) and pay overtime for hours worked over 40 in a work week (at least 1.5 times the regular pay rate). However, the Fair Labor Standards Act (FLSA) provides minimum wage exemptions…
What Is Cash on Hand and How Much Do You Need?
Cash on hand refers to the money a business has readily available to access and use and the cash equivalents that can easily be converted to cash within 90 days. By effectively managing your cash on hand, you can ensure your business has the financial flexibility to navigate challenges and capitalize on opportunities. Examples of…
What Is ARV: After Repair Value Formula & How to Calculate
A property’s after repair value (ARV) is a home’s estimated value after repairs, upgrades, and renovations have been completed. It is typically used by fix-and-flip and fix-and-hold investors to determine if a particular project will be profitable. A lender may also evaluate ARV as part of its qualification requirements. If you’re looking to get financing…
What Is Customer Service Automation? Examples & Solutions
Customer service automation is the process of automatically resolving or responding to customer inquiries without direct human-agent intervention. The best examples of customer service automation features include chatbots, personalized messaging, intelligent routing, and automated customer responses. Adopting this technology centralizes customer information for speedy and efficient service with much less expense. Benefits of Customer Service…