LIFO Tax Treatment: Role of LIFO in the Tax Code

As we can see in this example, two transactions have been spread across a total of three years. This example is designed to illustrate the importance of the matching principle as, even though the materials were purchased in year 1, they weren’t sold until year 2. If...

How to Calculate Real Interest Rate

On your very first mortgage payment, only $271 of that amount will go toward reducing your loan balance, while $1,625 will be paid in interest. But if you fast forward 20 years, $992 of that same monthly payment will be applied to the loan balance, and about $905 will...

PE Ratio Price-to-Earnings: Definition, Formula, and More

It can be a useful tool when trying to identify undervalued stocks, and it can help you avoid overpaying for stocks as well. There are several different ways to calculate the P/E ratio, with the two most common being the trailing P/E and the forward P/E. However, by...