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).
Operating Profit Margin – Formula and Understanding Read More »
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.
Total Assets Turnover Rate – Formula and Analysis Read More »
The fixed assets turnover rate is another activity ratio whereby an income statement financial characteristic is compared to a balance sheet asset section.
Fixed Assets Turnover Rate Read More »
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.
Working Capital Turnover Read More »
The cash ratio is a much more effective tool for small business than the traditional current or quick ratio.
One of the activity ratios in business is the receivables turnover ratio or rate; it measures the frequency of collecting the entire balance of accounts receivable.
Accounts Receivable Turnover Ratio Read More »
No other business term is so misunderstood, misstated, misleading or deceiving as the words ‘net profit’.
The current ratio is an inappropriate relationship to use or rely on in small business. The ratio is best suited for large publicly traded organizations.
Business ratios are used to compare companies of different sizes within the same industry.
Business Ratios (Introduction) Read More »
