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Almost all businesses need substantial amounts of assets to make sales and to carry on operations. The total assets of most businesses are a third, a...
The ability of the production function to operate at its maximum levels of productivity are strongly influenced by the amount of investment that a company is...
“Cash To Working Capital Ratio” is useful for determining the proportion of working capital that is made up of cash or investments that can be readily...
The “Cost Of Credit“ is used to determine the cost of “not–taking–a–discount–offered–by–a–supplier“. It is used by the purchasing department as a negotiating tool so that a...
Operating ratios may be even more useful than financial ratios because of the timely nature of their calculation and the decision specific nature of their use....
Investors, and therefore managers, are particularly interested in the profitability of the firms that they own. As we will see, there are many ways to measure...
The term “liquidity” refers to the speed with which an asset can be converted into cash without large discounts to its value. Some assets, such as...
We can use several tools to evaluate a company, but some of the most valuable are “financial ratios“. Ratios are an analyst’s microscope: they allow us...