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Articles by Mandalika
Page 35 of 41
Write the difference between EBITDA and net income.
The major differences between EBITDA and net income are as follows −EBITAIt calculates profit making ability of a firm.The earning potential of a company can be calculated.EBITDA is defined as sum of EBIT, depreciation and amortisation (or) sum of net profit, taxes, interest, depreciation and amortisation.Tells about money income generated before expenses (taxes, interests, depreciation and amortisation).There is Overstates the cash flow.It is used by start-ups.Net incomeIt indicates total earnings of a company.It calculates earning per shares (EPS).Net income is defined as difference between revenue and cost of doing business.It tells about total earnings after reducing expenses (interest, tax, depreciation ...
Read MoreDifferentiate between EBIT AND EBITDA.
The major differences between EBIT and EBITDA are as follows −EBITEBIT refers to Earnings Before Interest and Tax.It measures company’s profit.Operation results are represented on accrual basis.EBIT is defined as difference between revenue and operating expenses.Depreciation/amortisation is taken into account.When capital intensive is less, financial markets gives priority to this ratio.EBITDAEBITDA refers to Earnings Before Interest, Tax, Depreciation and Amortisation.It measures actual operating performance of a firm.Operation results are represented on cash flow basis.EBITDA is defined as difference between revenue and operating expenses.Depreciation/amortisation are not taken into account.When sectors are capital intensive, financial markets will emphasize this.
Read MoreCompare EBIT and operating income.
The major differences between EBIT and operating income are as follows −EBITIt calculates company’s profitability.It is used to understand the company’s profit making capacity.It is not recognised by GAAP.The adjustments are made.The non-operated expenses are also considered.It is not reported in financial statements.Operating incomeIt calculates profit gained through operations.It is used to know company’s capacity to convert their revenues into profit.It is recognised by GAAP.There is no need for adjustments.Only operating expenses are considered.It is reported in the financial statements.
Read MoreWrite the difference between cost accounting and management accounting.
The major differences between cost accounting and management accounting are as follows −Cost accountingManagement accountingIt helps in taking decisions in cost computation, cost control, cost reduction.Short term planning.It has a very narrow scopeIt measures quantitative.It is a sub set of management accounting.There is a specific procedure.Historic informed is the basic in decision making.Requires statutory audit.It does not depend on management accounting.It is used by management, shareholders and vendors.It helps in taking effective decisions in business.Short/long term planning.It has much broader scope.It measures both quantitative and qualitative.It itself is a vast area.There is no specific procedure.Historic and predictive information is the ...
Read MoreWrite the difference between tax and duty.
The major differences between tax and duty are as follows −TaxDutyIt is the compulsory amount paid to the government.It is charged on income, wealth, service, sales etc.Direct tax and indirect tax are types of taxes.Wide scope.Central/state governments will impose tax.It is an amount charged by government on imports/exports and manufacture of goods.It is charged on goods and financial transactions.Custom duty and excise duty are types of duty.Narrow scope.Central government will impose duty.
Read MoreWrite the difference between single entry system and double entry system.
The major differences between single entry system and double entry system are as follows −Single entry systemDouble entry systemTells about cash, debtors and creditors cash balances only.Records transactions related to business only.Incomplete system of recording the transactions.Can easily record fraud transactions.Hard to find errors.Persons accounts and cash accounts are included.Not accepted by taxation department.Takes lot of time in calculation profit/loss.Suitable for small business.Cost of implementation is not required.Reconciliation of accounts is not possible.Special knowledge is not required in maintaining books.Trail balance can’t be prepared.Not suitable for tax purposeDifficult to prepare financial statementDifficult to tell about financial positionTells about every business ...
Read MoreWhat are the differences between direct tax and indirect tax?
The major differences between direct tax and indirect tax are as follows −Direct TaxIndirect TaxIt is the tax on income/profits.Individuals, firms, companies pay direct taxes.It is applicable to taxpayer.It is burden on individual.It can’t be transferred to others.It covers an entity/individual.It has high administrative cost.Tax evasion is possible.It includes good allocative effects (less burden).It may reduce inflation.It results in lesser savings, investments demoralising.The mode of progress is progressive.It is difficult to collect taxes.It includes income tax, wealth tax and corporate tax.It is the tax on goods and services.End consumer of service/goods are taxpayers.It is applicable at each stage of production/distribution ...
Read MoreDistinguish between entrepreneurship and management.
The major differences between entrepreneurship and management are as follows −EntrepreneurshipManagementEntrepreneurship refers to creating a company/firm by considering financial risk.It motivates to start a business.It includes start-ups , venturesTagged as owner.The rewards come in form of profits.It accepts risks.It sets goals.The decisions are made on personal perception.Includes innovator.The process is centralised.Opportunity recognition, feasibility analysis, business planning and runningPart of managementContemporary aspects includes social entrepreneurship, venture growth etc.Management refers to doing business activities by a group of people or by organized groups.It motivates to manage business.It will take care of the ongoing operationsTagged as an employee.Employees get their salaries.It does not ...
Read MoreDistinguish between EBIT and net income.
The major differences between EBIT and net income are as follows −EBIT (Earnings before Interest and Taxes)It evaluates profits earned through an entity.An operating income earned by an entity before adjustments (interests and taxes) is EBIT.The main purpose is to determine profit earning of an entity.EBIT can be defined as difference between revenue and operating expense (or) sum of net income, interest and taxes (or) difference between Earnings Before Interest Tax Depreciation and Amortisation (EBITA) and depreciation, amortisation expensesIt is used by governments, equity holders and debt holders.Interest and expenses incurred are not considered.Cost of operating business is ignored.Operating expenses ...
Read MoreCompare joint venture and partnership.
The major differences between joint venture and partnership are as follows −Joint VentureIt is a trade formed by two or more individuals.The duration of time is fixed.The parties are called Co-Ventures.The profit/loss are distributed on interim basis.There are no specific governing laws.A specific name is not required.The accounts may/may not be separately maintained.It follows liquidation accounting.It includes profit-seeking ventures.A minor is not accepted as a Co-Venturer.PartnershipIt is an agreement made by two or more individuals having respective proportionate shares to start a business.The duration of time is not fixed.The parties are called partners.The profit is distributed annually.It is regulated by ...
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