20 Private Industry Sectors
The gross domestic product comprises 20 private industry sectors and two government groups. All together 22 distinct sectors contribute to the gross domestic product (GDP).
Liquidity Ratios
Liquidity ratios are a group of ratios used to measure the ability of a business operation to meets its current obligations.
Insolvency – Detection
Insolvency refers to the ability to pay bills in a timely manner. It does not mean bankruptcy but long-term insolvency is a underlying factor of bankruptcy.
Return on Equity
Another performance ratio used in business is return on equity. It is similar to return on assets except return on equity uses one section of the bottom half of the balance sheet.
Operating Cash Ratio – Formula and Understanding
Unlike the other liquidity ratios that are balance sheet derived, the operating cash ratio is more closely connected to activity (income statement).
Operating Profit Margin – Formula and Understanding
Operating profit margin refers to the value earned as a percentage of net sales. The operating profit is often referred to as earnings before interest, taxes, depreciation and amortization, (EBITDA).
Total Assets Turnover Rate – Formula and Analysis
Within the group of activity ratios, the total assets turnover rate is the broadest in scope. Similar to other activity ratios, it utilizes net sales as the numerator.
Fixed Assets Turnover Rate
The fixed assets turnover rate is another activity ratio whereby an income statement financial characteristic is compared to a balance sheet asset section.
Working Capital Turnover
Activity ratios measure performance of a current asset on the balance sheet. The working capital turnover is the most encompassing of all the activity ratios.