Interest Coverage Ratio
The last of the leverage ratios isn’t really a pure leverage indicator but augments the debt ratio. This is the interest coverage ratio.
Interest Coverage Ratio Read More »
Value Investing
Value investing is a systematic process of purchasing high quality, intrinsic backed stocks at depressed market prices. Using financial analytics, allow time for market price recovery and then proceed to reap gains from an investor’s patience.
Gross Profit Margin
The difference between the sales price and the cost of the product or service rendered is known as gross profit margin.
Gross Profit Margin Read More »
Debt to Equity Ratio
A leverage ratio used to evaluate the financial integrity of a business is the debt to equity ratio. It is strictly a bottom half balance sheet ratio.
Debt to Equity Ratio Read More »
Net Profit Margin
The net profit margin reflects the profitability of the company as a percentage of net sales. It is one of the performance ratios used in evaluating business.
Return on Assets
Return on assets is one of the performance ratios used in business identifies the overall ability of management to efficiently utilize resources to generate a profit.
Break-Even Analysis – Fundamentals
Break-even analysis is a managerial (cost) accounting tool used to examine the relationship of price to cost of a product. It also considers various sales volumes and the effect on profit given the different relationships of price to cost.
Break-Even Analysis – Fundamentals Read More »
Accounts Payable Turnover Rate (Ratio)
The accounts payable turnover rate is a business activity ratio measuring the frequency of the company’s ability to pay its vendors and suppliers. The numerical value is customarily reported as an annual value. The higher the number, the more often the payables are cleared (paid). A ’12’ would indicate that all payables are paid every month (360 days/12 = 30 days). Ideal values exceed 20 as this indicates all accounts are paid on average at least every 18 days (360 days/20 = 18 days).
Accounts Payable Turnover Rate (Ratio) Read More »
Inventory Turnover Rate
One of the many ratios used in business, the inventory turnover rate is often misunderstood, miscalculated and misused.
Inventory Turnover Rate Read More »
Fixed Assets To Debt Relationship
Every business owner, especially young entrepreneurs, must understand how long-term debt is used to finance the purchase of fixed assets.
Fixed Assets To Debt Relationship Read More »
Penny Stocks- Introduction
Those small publicly traded businesses with share prices of less than $5 and capitalization of less than $50 million are referred to as penny stocks.
Penny Stocks- Introduction Read More »