Categories
Accounting

What is price/earnings ratio

CabinetComptableBrest.com What is price/earnings ratioWhat is price/earnings ratio : the price/earning (P/E) ratio is another measurement that’s of particular interest to investors in public businesses. The P/E ratio gives you an idea of how much you’re paying in the current price for stock shares for each dollar of earning. Earnings prop up the market value of stock shares, not the book value of the stock shares that’s reported in the balance sheet.

The P/E ratio is a reality check

on just how high the current market price is in relation to the underlying profit that the business is earning. Extraordinarily high P/E ratios are justified only when investors think that the company’s earnings per share (EPS) has a lot of upside potential in the future.

The P/E ratio is calculated

dividing the current market price of the stock by the most recent trailing 12 months diluted EPS. Stock share prices bounce around day to day and are subject to big changes on short notice. The current P/E ratio should be compared with the average stock market P/E to gauge whether the business selling above or below the market average.

P/E ratios are currently running high,

despite a four-year slump in the stock market. P/E ratios vary from industry to industry and from year to year. One dollar of EPS may command only a $10 market value for a mature business in a no-growth industry, while a dollar of EPS in a dynamic business in a growth industry may have a $30 market value per dollar of earnings, or net income.

To sum up, the price/earnings ratio, or P/E ratio is the current market price of a capital stock divided by its trailing 12 months’ diluted earnings per share (EPS) or its basic earnings per share if the business does not report diluted EPS. A low P/E may signal an underbalued stock or a pessimistic forecast by investors. A high P/E may reveal an overvalued stock or might be based on an optimistic forecast by investors, explains Cabinet Comptable Brest

Categories
Accounting

What does an audit report contain?

ExpertComptableClermontFerrand.com  What does an audit report containWhat does an audit report contain? Most audit reports on financial statements give the business a clean bill of health, or a clean opinion. At the other end of the spectrum, the auditor may state that the financial statements are misleading and should not be relied upon. This negative audit report is called an adverse opinion. That’s the big stick that auditors carry. They have the power to give a company’s financial statements an adverse opinion and no business wants that. The threat of an adverse opinion almost always motivates a business to give way to the auditor and change its accounting or disclosure in order to avoid getting the kiss of death of an adverse opinion. An adverse audit opinion says that the financial statements of the business are misleading. The SEC does not tolerate adverse opinions by auditors of public businesses; it would suspend trading in a company’s stock share if the company received an adverse opinion from its CPA auditor.

One modification to an auditor’s report is very serious

– when the CPA firm says that it has substantial doubts about the capability of the business to continue as a going concern. A going concern is a business that has sufficient financial wherewithal and momentum to continue it normal operations into the foreseeable future and would be able to absorb a bad turn of events without having to default on its liabilities. A going concern does not face an imminent financial crisis or any pressing financial emergency. A business could be under some financial distress but overall still be judged a going concern. Unless there is evidence to the contrary, the CPA auditor assumes that the business is a going concern. If an auditor has serious concerns about whether the business is a going concern, explains Expert Comptable Clermont-Ferrand, these doubts are spelled out in the auditor’s report.

 

Categories
Carpet Cleaning

Products of a Reputable Carpet Cleaning Supply Company

carpet-cleaning-lancaster-paProducts of Carpet Cleaning : A good carpet cleaning supply company will have everything the professional carpet cleaner will need to do his job, as well as everything a homeowner will need to keep his or her carpet and upholstered furniture in top shape. The main machine that battles against dirty carpets is known as a carpet extractor. This machine, in its most basic form, is a waterproof vacuum cleaner that extracts water and dirt from a carpet. Some models incorporate a spraying nozzle which soaks the carpet in soapy foam. Others have rotating bristles that scrub the carpet and help to remove ingrained dirt and debris.

In addition to the portable cleaners,

any reputable carpet cleaning supply company should have truck mounted extractors as well. These are used by commercial and professional cleaners who need a high-powered and reliable extracting machine. These machines are mounted in a truck and the cables and hoses that actually come in contact with the carpet must be run into the house, office, building, etc., where the cleaning is to be done. The carpet cleaning supply company should have special detergent formulas for these high-potency machines, and because they can be tricky to operate, it may be best to leave the operation of theses machines to the professionals who have received training in their use.

A carpet cleaning supply company

who caters to business professionals as well as private consumers, should also have a number of other products. For example, they should have standard and professional vacuum cleaners, floor buffers, propane burnishers, carpet cleaning chemicals, and floor care solutions. Like Carpet Cleaning Lancaster PA they should also have a good customer supports system for those times you are having trouble with a machine. In fact, it is a good idea to try a machine out before you buy it. Some companies will allow a trial period for getting accustomed to a cleaner, while others encourage you to rent a machine before you buy it.