Professional Accounting Blog

Accounting For Your Prosperity

A Quick Refresher on Accounting / Finance Ratios

Posted by Carlo Berlingieri on Feb 14, 2017 10:00:00 AM

Topics: Accounting & Auditing

Accounting and finance ratios are a quick way to review and evaluate financial information. The four major types of ratios used in the industry are Liquidity (aka solvency), Activity (aka efficiency), Profitability, and Coverage. They are vital for management to evaluate the operations of their business and determine if certain management actions are having an effect on the “numbers”. Ratios can also be used by owners and readers of financial statements to quickly identify the health of the company, unusual trends in the business, and certain key indicators of the business. Below are some of the most popular ratios that people use to evaluate financial statements:

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Computing Trademark Infringement Damages

Posted by Meaden & Moore on Feb 13, 2017 8:00:00 AM

Topics: Investigative and Forensic Accounting

Trademark holders often turn to injunctive relief under the Lanham Act when their assets are infringed, asserting a likelihood of consumer confusion. But, if a trademark is infringed in a manner that causes actual consumer confusion, the holder could be entitled to both its own actual damages and the infringer’s profits.

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Q4 2016 Middle Market Indicator Report

Posted by Lloyd Bell on Feb 7, 2017 8:55:28 AM

Topics: Accounting & Auditing

The National Center for the Middle Market recently released its Q4 2016 Middle Market Indicator. This report provides insight on past and projected revenue, employment and confidence of privately-held companies with revenues ranging from $10 million to $1 billion.  A complete copy of the report can be found here (http://middlemarketcenter.org/performance-data-on-the-middle-market).

According to the report, middle market companies ended the year with a 6.9% growth in revenues.  When filtered to just Ohio companies, revenue growth was 7.1%. In the immortal words of Chrissie Hynde: “Hey-o way to go Ohio!” What is worth noting, however, is that businesses with revenues over $50 million were responsible for most of the growth while businesses under $50 million actually reported reductions in revenue.

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New Regulations: Domestic Disregarded Entity (DDE)

Posted by Allen Littman on Jan 31, 2017 3:24:43 PM

Topics: Tax Planning & Strategies

For tax and liability reasons businesses in the United States entities are designated as sole proprietorships, partnerships, limited liability corporations (LLC), and C and S Corporations for tax and reporting purposes. Each entity bears different responsibilities for reporting income and transactions, and individual owners have different obligations for the actions of their businesses.

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New Litigation Frontier

Posted by Meaden & Moore on Jan 30, 2017 8:00:00 AM

Topics: Investigative and Forensic Accounting

Proving Cyber Breach Damages Can Be Challenging

Home Depot, Target, TJX and Anthem — all made headlines when their networks were hacked and thieves made off with the personal data of millions of consumers. Not surprisingly, such high-profile cyber breaches usually are followed by lawsuits. Much of the litigation thus far has focused on issues related to damages, particularly actual loss and causation. Here’s an overview of how plaintiffs in cyber breach actions have claimed damages and how courts have ruled.

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When Can an Expert Consider Subsequent Events?

Posted by Meaden & Moore on Jan 25, 2017 8:54:39 AM

Topics: Investigative and Forensic Accounting

Often, financial experts encounter evidence of events that occurred after the valuation or damage date that may have a bearing on their conclusions. But to what extent can they consider this evidence when valuing an asset or calculating damages?

Unfortunately, there’s a great deal of confusion about the role of such evidence, also known as ex post facto data. Here’s a quick summary of the “rules.” But keep in mind that courts may deviate from these guidelines to achieve an equitable result. 

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Proving Lost Profits With “Reasonable Certainty”

Posted by Meaden & Moore on Jan 25, 2017 8:54:10 AM

Topics: Investigative and Forensic Accounting

Recovering lost profits generally requires a plaintiff to establish three elements: causation, foreseeability and reasonable certainty. The third element creates a challenge for damages experts. By definition, establishing lost profits involves proving something that, as a result of the defendant’s misconduct, didn’t occur.

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Using the “Leakage” Theory to Show Loss Causation in Securities Litigation

Posted by Meaden & Moore on Jan 25, 2017 8:52:23 AM

Topics: Investigative and Forensic Accounting

Securities fraud cases rarely make it to trial, but those that do are often noteworthy. For example, a recent class action lawsuit gave the Seventh Circuit Court of Appeals the opportunity to weigh in on the “leakage model” for estimating stock price inflation. Although the court accepted the validity of the model, it imposed some restrictions on its use by adopting a burden-shifting analysis.

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Compare and Contrast - Using the Yardstick Method to Estimate a Start-Up’s Damages

Posted by Meaden & Moore on Jan 25, 2017 8:51:12 AM

Topics: Investigative and Forensic Accounting

The yardstick method, which bases economic damages on the performance of comparable “guideline” companies, is a tried-and-true approach for estimating damages, but, like other methods, it has its limits. For example, courts typically don’t favor it in cases involving a plaintiff that’s a start-up company.

In one recent case, though, a federal district court did allow expert testimony that calculated damages for a start-up maker of compression sports apparel based on comparisons with the market leader.

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AICPA Weighs-In on New Revenue Recognition Rules for Contractors

Posted by Aaron T. Cook on Jan 24, 2017 8:00:00 AM

Topics: Accounting & Auditing, Construction

Recently, the American Institute of Certified Public Accountants (the "AICPA"), through its industry-specific tax force, released proposed guidance on how to implement new revenue recognition standards for engineering and construction contractors.

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