Financial Accounting An Introduction- Evan Vitale

Every Business persons wants to maintain his reputation amongst the market and also wants to expand in the economic level. For this purpose, Evan Vitale ensures best practices to be followed for a better marketing strength and for explosion of new opportunities that may help to lead your business at global level.

Check out this video on an introduction to financial accounting by Evan Vitale:

 

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2015 Venture Capital & Private Equity Country Attractiveness Index

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Knowing when to invest and where are sometimes difficult. You have to assess which countries offer the most promising markets and which ones have the biggest entrepreneurial support. The place where you choose to invest your money has to have a strong incentive or reason to invest with protection and venture support.

The 2015 Venture Capital and Private Equity (VC/PE) Country Attractiveness Index recently released a running list from best to unfavorable countries to place investments. Of the 120 countries analyzed, the United States, the United Kingdom, Canada, Singapore, and Japan ranked at the very top. Conclusions were made based on thousands of data points and each country’s overall attractiveness to VC/PE investors. This index is not only important to investors, but regulators who can use the information provided to set new policies or revise old ones to help create a more desirable package for investors.

In addition to well established “green light” markets, private equity investors have the ability to keep an eye on emerging markets with acceptable risk to reward ratios. Current emerging markets are Mexico, Indonesia, the Philippines, Nigeria, Turkey, and South Africa. Countries like China, Russia, India, and Brazil have been in the ranks for a while now, with China leading the way as most attractive. Although investors can sometimes jump the gun, or present themselves as overly enthusiastic for emerging markets, investing in them is the only way to jump start the process and potentially reap the extraordinary reward of being an early adapter.

As for the 2015 ranking, here are the top 10 attractive investment locations:

  1. United States
  2. United Kingdom
  3. Canada
  4. Singapore
  5. Japan
  6. Hong Kong
  7. Germany
  8. Australia
  9. New Zealand
  10. Switzerland

And here are the 10 lowest ranking locations:

  1. Burkina Faso
  2. Mali
  3. Venezuela
  4. Benin
  5. Lesotho
  6. Syria
  7. Mauritania
  8. Chad
  9. Angola
  10. Burundi

For more information, be sure to check out the 2015 index here: The Venture Capital & Private Equity Country Attractiveness Index

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Private Equity on the Rise

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After the global financial crisis the most important lesson learnt by the business world was – Expect the Unexpected. In a post global financial meltdown environment many private equity firms today are operating within limits and under ever increasing uncertainty.

Keeping in view this scenario how do businesses balance buy and sell side opportunities and more importantly how do they expand into new markets and diversify into new revenue channels when now more than ever the focal point of all business is keeping a check on their existing portfolio’s while at the same time meeting up the to the challenge of new regulatory frameworks and risk management techniques.

It is important for businesses to gain a perspective, even though after the market turmoil faced and the industry left reeling, many groups are now coming forward and looking into deals and opportunities.

In the light of macro-economic uncertainties it is important to point out that private equity companies similar to that of other industrial giants are just as much exposed. Within this frame it is also important to consider the issue and impacts of sovereign debt within the US and European Union which is just coming up to the horizon.

However in the light of the above issues it is still seen that private equity is able to demonstrate a certain level of resilience and nimbleness with an ability to withstand shocks. Keeping this in mind, it is no surprise that most private equity investors have been able to come out of the recession with a renewed sense of aggression and focus on organic revenue growth. The key however to this is applying and taking up more entrepreneurial experts and mindsets from the market and adding them onto your portfolio.

We will for sure see private equity on the rise again as they take the helm as companies who are able to demonstrate an active ownership skill, this is evident from examples which can be taken from North America and Europe on how private equity creates value. This inevitably has an effect and enables them to create more stronger and profitable businesses.

Coming back to point of expanding, it is seen that institutional investors are now taking an active part in Latin America’s growth and that of Brazil in particular. As a result a surge has been noted in their keenness on expanding private equity programs in this region.

On the other hand Risk, Regulation and Compliance also play an important role. This is especially when considering market volatility and pricing pressures – these are tools which are usually in play to create competition and opportunities. Businesses on the whole need to develop strategies in order to provide a balance between risk and opportunity.

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FASB Clarifies Guidance for Pushdown Accounting

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The Financial Accounting Standards Board has published a new rule that seeks to clarify whether and at what threshold an acquired business or nonprofit organization can apply the pushdown accounting method.

Under the new rule, an acquired entity may choose to apply pushdown accounting in the reporting period in which the “change-in-control event” occurs.

“An acquired entity should determine whether to elect to apply pushdown accounting for each individual change-in-control event in which an acquirer obtains control of the acquired entity,” the rule states. “If pushdown accounting is not applied in the reporting period in which the change-in-control event occurs, an acquired entity will have the option to elect to apply pushdown accounting in a subsequent reporting period to the acquired entity’s most recent change-in-control event.”

When a company is acquired, pushdown accounting allows the acquired entity to use the acquirer’s basis of accounting to reflect the purchase costs of the acquirer in its financial statements rather than its historical costs.

The rule also requires companies that use pushdown accounting to “disclose information in the current reporting period that enables users of financial statements to evaluate the effect of pushdown accounting.”

FASB noted that current GAAP “offers limited guidance for determining whether and at what threshold pushdown accounting should be established in an acquired entity’s separate financial statements” and in the absence of that guidance, companies, including some not registered with the U.S. Securities and Exchange Commission, have been turning to the SEC staff guidance on pushdown accounting.

The new rule, FASB said, provides guidance for all companies, registered with the SEC or not, and is consistent with the SEC’s threshold for change-in-control events, reducing “the complexity that some stakeholders said exists under the current pushdown accounting practices.”

For its part, the SEC rescinded portions of its interpretive guidance for pushdown accounting, bringing its guidance into conformity with the new FASB standard.

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Accounting for Startups

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There is no better feeling like bringing home a newborn baby for the first time, the first and most common thing you will probably do is to check if your baby is healthy and well. You may perform several tests like checking their breathing patterns and heart rate, and then compare it to the typical rate for newborn babies. As time goes on and your child ages, you’ll learn new methods for checking your child’s health and condition. This can include their mental, physical and emotional health and development.

This can be compared to when you just started a business, your accounting needs will grow as your business grows and become more and more complicated. Brian Hamilton, the chairman of financial information company Sageworks has mentioned that one of the most common mistakes new entrepreneurs make is that they feel that they don’t need an accountant or that accountants aren’t necessary until their business has grown to mature a bit more.

Bran Hamilton has stated “Most businesses are very simple, and the vast majority of them are sole proprietorships.” This results in the mindset that their primary focus should be to increase revenue and gain new clients. “In most cases, you don’t need an accountant on day one. If I’m going to start, for example, a landscaping company, I’m not going to count money until I make money.”

There are a variety of available accounting systems, including Xero, Peachtree and QuickBooks, all of which can assist the new business owners in handling accounting related affairs such as recording sales and expenses and their growth over time. Developers of tax-preparing software like Intuit ensure that sole proprietors submit their Form 1040 along with a Schedule C attached.

At some point, the questions get asked “If you’re running a fairly simple business, why do you need an accountant on the first day?” You might need an accountant for advice, because you usually need advice once you get going. Accountants handle more than just your business’s financial information, they can provide strategic advice regarding how best to run your business from a financial point of view. Also, if you decide to obtain a loan or purchase property to expand your business, accountants can provide invaluable advice.

However, it is important to understand that an accountant is needed most during different stages of the business cycle, and can also depend on the type of business. The most common strategy for new business owners is to start a business and run straight for new clients and sources of revenue.

Brian Hamilton says, “A lot of the time, entrepreneurs and others seem to have a kind of checklist in their head about what ‘real’ businesses do and have. They think that all businesses ‘need’ an accountant, a lawyer, a business plan, to be incorporated. All they’re doing is setting big obstacles to getting the first customer.” The best approach in simple terms is to gain new clients and then look for an accountant.

To determine how well a business is performing, private-company owners will consistently check a few key financial metrics. The most common being sales as that is what determines the revenue of a business. For most, tracking sales is simple and shouldn’t require extensive analysis unless your business is offering credit to customers or is project-based. Just by recording your business costs and revenue from all sources it will allow you to keep track of your profit.

In order to determine your profitability, there are two key factors to keep an eye on.

Gross margin: This is a company’s revenue minus total costs directly involved in producing the product or delivering the service, divided by revenue. This shows what percentage of sales is left over after direct costs, and it’s an important measure of efficiency. Examining this can guide you on when you need to adjust prices or volume in order to keep more of what you sell.

Net margin: This is a company’s net profit measured against sales and takes into account all expenses related to the business (such as bank fees and other general overhead). This margin tells you how much of every dollar in sales your firm is keeping after all expenses are paid.

Other metrics become more important to understand and track as the business grows. The best time to start tracking such metrics depends entirely on which stage the company is in, and the type of company. However, when it comes to new companies and are developing the ideas behind their company, the key metric they track is sales.

 

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Miami Bball Upsets No. 8 Florida

The Miami Hurricanes basketball team has gotten its season off to an upbeat start. The Hurricanes are sending a clear message to the rest of the ACC with this win over the defending SEC champs. No. 8 Florida looked to be on the way to a comfortable win over Miami when Angel Rodriguez caught absolute fire, guiding the Hurricanes to a 69-67 win over the Gators.

Angel Rodriguez scored 24 points, none bigger than those that came on a falling-down, hand-in-the-face 3-pointer with 16 seconds remaining, and Miami overcame a 15-point deficit to upset No. 8 Florida 69-67 on Monday night.

With the game on the line and his confidence soaring, Miami’s Angel Rodriguez asked for the ball. “Angel Rodriguez was sensational,” Larranaga said. “He’s going to do whatever is necessary to win.”

The Hurricanes scored 48 points in the second half as Rodriguez took over. The former Kansas State guard hit three consecutive 3-pointers that helped Miami take the lead with 1:45 left. His free throw tied it with 1:13 remaining. But his fifth 3 of the game was the dagger that ended Florida’s school-record, 33-game winning streak at home.

Rodriguez scored 20 points in the final seven minutes of the game — including five threes, plus three free throws when he was fouled while shooting another three — to rally the Hurricanes back from a deficit that reached as much as 15.

Florida had a final chance to send it to overtime, but Michael Frazier II missed a jumper at the buzzer.

Eli Carter led the Gators with 21 points, including 16 in the second half. Florida was down four players in the game, including starting forward Dorian Finney-Smith.

Florida’s real problem was its second-half defense. Coach Billy Donovan ripped his team last week because of shaky defense, saying the Gators weren’t “remotely close” to deserving their lofty ranking.

It showed Monday. The Hurricanes shot 65 percent in the second half and 70 percent from 3-point range.

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