Liquidity and Liquidity Ratios

Liquidity: Liquidity is defined as an extent to which assets as well as marketable securities are bought and even sold back in the markets without manipulating their original price. It’s a high-end trading activity which exhibits its occurrence in manufacturing companies that are willing to spend a great chunk of money over the inventory. Furthermore,...

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Quick Ratio

The Quick Ratio represents an indication for the company which heavily emphasizes over its short-term liquidity and its potential to fulfill the temporary obligations with assets having maximum liquidity in particular. Therefore, it embarks on excluding inventories from the current assets and is evaluated by this universal formula – Quick ratio = (Current Assets –...

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Working Capital

The working capital is one of the most effective tools in the world of accountancy as it represents the company’s performance along with its financial position on a short-term basis. There is an organized method of evaluating the working capital which can help in finding some value-added insights regarding the company. It can be calculated...

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Annuity

The annuity is considered as a contractual product which is used by financial centers and institutions to understand about how funds grow from time to time. It is especially designed to evaluate how the money changes its nature after annuitization and delivers a series of payments to the individuals after a noticeable gap. Furthermore, the...

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Simple Interest

Simple interest is considered as the quickest and the most reliable methods of evaluating the interest rate that financial centers and banks would apply on the borrowed amount. It is universally determined by multiplying the percentage of the interest rate by the loaned amount and then by number of periods. It is being used in...

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Bank Loan

It is labelled as the most popular form of loan capital which companies opt for businesses or individuals for the sole proprietorship. There are multiple bank loans that can be issued from the banks, financial institutions and investment centers accordingly. Upon agreeing, the bank decides whether the loan is short-term or long-term and evaluates the...

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Debt Management Ratios

The Debt Management Ratio is considered as the company’s evaluation for the debt amount in contrast to its available amount for financing the upcoming projects. It should be in our best interest that such ratios provide valuable insights and information regarding all the business units that are being supported through debt, whereas the other operations...

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Profitability Ratios

The Profitability Ratio is a major evaluation for understanding if organizations and companies are performing well. Considering this as a mandatory component, it is interesting to see that these theories are being practiced to avoid misinterpretations of sales and other aspects curating accurate results for the board of directors and owners. Here, profitability is the...

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Fixed Asset Turnover Ratio

What’s Fixed Asset Turnover Ratio? The fixed asset turnover ratio is considered as a vital component of ‘financial ratio’ associated with the net sales that are generated through fixed-assets. It ensures that fixed-asset investments are producing an ample amount of net sales to fulfill the desired requirements. The experts include ‘properties’, ‘plants’ and ‘equipment’ in...

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Future Value Definition – FV

What is Future Value or Cash Flow The future value refers to an amount of assets or the cash measured in a specified time of the future which should be equal to the amount being evaluated in the present time. Quite interestingly, the future value is measured through two effective methods and can help businesses...

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