Repayment capacity reflects the ability of the business to make scheduled principal payments on term debt and unaccounted carryover operating debt, as well as interest on debts. Income and Income Statement Terms Accrual Basis of Accounting is a method of accounting under which revenues are recognized in the accounting period when earned regardless of when cash is received, and expenses are recognized in the accounting period when incurred regardless of when cash is paid. Cash Basis of Accounting is a method of accounting under which revenues are recorded when cash is received and expenses are recognized when cash is paid. The income statement is useful in analyzing the financial performance or profitability of the business. An income statement can also be developed for a specific enterprise.
Profitability is the ability of the business to generate income in excess of expenses.
Profitability can be analyzed using the income statement and balance sheet. There are different measures of gross income or receipts from the business. This accrual based income reflects the value of production whether sold or not. This accrual basis income reflects the value of production whether sold or not. This accrual basis income reflects the value of production whether sold or not.