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Although many small businesses prefer the cash method for its simplicity, only some contractors qualify. Notably, those who do qualify generally yield lower taxes construction bookkeeping making it a desirable accounting option for tax purposes. In the U.S., businesses that make under $25 million annually can choose to use the cash basis method or the

For example, companies in industries that require significant inventory may have a lower quick ratio but still have a good current ratio. Lenders and creditors also use the current ratio to assess a company’s creditworthiness. A company with a high current ratio may be viewed as less risky and may have an easier time securing