Accounting, Business Tax Ronika Khanna Accounting, Business Tax Ronika Khanna

Is Facebook’s Valuation Justified? A Comparison of Key Financial Metrics to Apple and Google

The recent release of Facebook's S-1, the financial filings that are required to be publicly available prior to filing an IPO, has created a media frenzy. The report has been dissected and analyzed extensively, financial news networks can’t seem to stop talking about it and it seems that people who have never heard of an IPO are discussing it, fittingly, on their Facebook pages.   The most controversial issue, of course, is whether Facebook is actually worth $100 Billion. 

Although Facebook is unique in its global reach and ubiquity, the starting point for any valuation is to compare it with similar businesses.  I have chosen Apple and Google, given the similarity of their business models and their respective global dominance, to compare certain key metrics:

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Accounting, Self Employed, Small Business, Business Tax Ronika Khanna Accounting, Self Employed, Small Business, Business Tax Ronika Khanna

How to Update Wave Accounting for the 2012 QST Rate Increase

As of January 1st, 2012 the Quebec Sales Tax (QST Rate) which had gone up from 7.5% to 8.5% on January 1, 2011 will now increase to 9.5%.  The effective sales tax in Quebec will go up from 13.925% to 14.975%.  Since QST is calculated on the net amount + GST, the rate is not 14.5% but 14.975% .  In other words the effective QST rate is 9.75%.  Business owners will need to update their invoicing and accounting systems accordingly to ensure that the rate is properly reflected.

If you are using Wave Accounting, the update to the rates is fairly straightforward, with one little quirk.  Since Wave, unlike Quickbooks, does not allow for the QST to be calculated on the GST, the effective rate has to entered manually.  This is done as follows:

To update Quickbooks for the tax rate increase, please see “Updating Quickbooks for the 2011 QST Increase”.  The procedure is essentially identical except for rates.

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Quickbooks Online Banking: Setting Up, Deleting Matched Transactions and Manually Uploading Web Connect or Excel Files
Accounting, Self Employed, Small Business, Technology Ronika Khanna Accounting, Self Employed, Small Business, Technology Ronika Khanna

Quickbooks Online Banking: Setting Up, Deleting Matched Transactions and Manually Uploading Web Connect or Excel Files

Using online banking can be real time saver for businesses with numerous bank transactions.  It is primarily a tool to help you reconcile your bank accounts by matching the transactions that have already been entered in QuickBooks.  It helps to avoid the painstaking process of checking each transaction against your bank statement and the maddening frustration when you something goes wrong and you have to redo it. 
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Accounting, Self Employed, Small Business, Technology Ronika Khanna Accounting, Self Employed, Small Business, Technology Ronika Khanna

Is Wave Accounting Software a Good Fit Your Small Business

Most small business owners understand, in theory, that they should have an accounting system.  The problem arises when trying to select accounting software when often you are not really sure what your accounting software should do.      Every business has its own unique accounting and reporting needs.  The ideal accounting software should be able to record your transactions, report on them and provide for analysis on the different facets of your business.  If you are a freelancer or a small service provider, who prefers to do their own accounting, and is looking for a simple and cost effective accounting solution it is definitely worth taking a look at Wave Accounting.
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Accounting, Cash Flow, Technology Ronika Khanna Accounting, Cash Flow, Technology Ronika Khanna

5 Notable Disclosures in Groupon’s Financial Statements and What They Mean.

Since Groupon first submitted its S-1 filing in June, 2011, there has been a wave of negative sentiment around Groupon’s  upcoming IPO.  Many analysts believe that not only is Groupon not a good investment at the approximate $20 Billion + that its IPO’s initial share price will value it at, but  is in fact on the brink of insolvency.  They are also some that do not believe that, in the long run, Groupon’s business model is profitable . 

In an effort to determine whether Groupon is in fact  a raging buy or, as alternatively presented, on the verge of insolvency, I have undertaken an analysis of their latest S-1 , which was filed with the SEC on August 10, 2011.  The document, which is required by all companies who want to file an initial public offering, comprehensively reviews its operations, long term viability, business risks (which are numerous) and its financial condition.  Some of the more interesting discoveries, as they relate to the 6 months ending June 30, 2011, are presented below:

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Accounting, Technology Ronika Khanna Accounting, Technology Ronika Khanna

Apple Vs Google: Comparison of Quarterly Results (Infographic)

Apple and Google both had incredible quarterly results for the 3 months ended June 25th (strange quarter end date) and June 30th respectively.  They beat forecasts by significant margins, continue to expand their operations and have massive amounts of cash on their balance sheets with virtually no debt.  The infographic below presents some key figures of interest.  It is interesting to note that while Apple is almost twice the size of Google, based on Market Capitalization, their Earnings per share is virtually the same.  The majority (68%) of Apple's sales come from the iPhone and ipad , while almost all of Google's sales come from advertising.  Another interesting distinction for this quarter is that while Apple spent 2% of its gross revenues on  R&D, Google's investment in R&D was about 13%.
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Accounting, Technology Ronika Khanna Accounting, Technology Ronika Khanna

20 Interesting Financial Facts About Google

One of the best ways to analyse a set of financial statements is to look at a public company’s 10-K.  The 10-k is a mandatory annual filing for all public companies’ and provides a wealth of information about the business, operational and financial information about the entity.  Google’s is particularly interesting, as most of us are intimately familiar with at least some of Google’s wide array of services, yet its business model is fairly simple and accessible.  The bulk of its revenues are derived from advertising and its expense comprise primarily of amounts paid to adsense members, employee salaries and stock compensation and maintenance of its data centres.  Whether you are considering Google as an investment or trying to glean some insight into how one of the world’s most successful companies’ operates, a review of their 10-k is interesting (it helps if you are a finance geek) and insightful reading.  Below is a review and analysis of some financial facts and figures from their 2010 10-K.
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Accounting, Business Tax, Quickbooks Ronika Khanna Accounting, Business Tax, Quickbooks Ronika Khanna

How to Update Quickbooks for the 2011 QST Rate Increase

Update: As of January 1st, 2012 the Quebec Sales Tax (QST Rate) which had gone up from 7.5% to 8.5% on January 1, 2011 will now increase to 9.5%. The effective sales tax in Quebec will go up from 13.925% to 14.975%. Since QST is calculated on the net amount + GST, the effective rate is actually 14.975% (and not 14.5%) . In other words the effective QST rate is 9.975%. The instructions below are equally applicable, except the new QST rate to enter is 9.5%.

On January 1st, 2011, Revenue Quebec will be increasing the QST rate to 8.5% (yay!), bringing the effective rate of QST to 8.925% andtotal sales taxes (GST and QST) to 13.925% (since the QST is actually charged on the net price + GST.) This will impact anyone who charges QST including small businesses and self employed individuals, and invoicing software and processes should be updated to reflect the change. Suffice it to say that there are no major changes in the application of the rates. For those of you using Quickbooks you will need to update the QST being charged on both sales and purchases.

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