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Contents: How Shareholder Equity Works How to Calculate Equity? Equity and the Owner’s Equity Formula What Is Debt to Equity Ratio? Because equity is equal to assets minus liabilities, the company’s equity would be $800,000. Its D/E ratio would therefore be $1.2 million divided by $800,000, or 1.5. No, a high value for this ratio…

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Content Deferred Revenue How Do You Explain Accrual to Non-Accountants? What Is Accrual Accounting? Accrual Systems Contrast With Cash-Basis Systems It's also highly recommended for any business that sells on credit, as it more accurately matches income and expenses during a given time period. An electrician business that uses accrual accounting installs lights for a…