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.
Working Capital Turnover Read More »
Value Investing
Value investing, in its simplest terms, means buy low, sell high, the universal primary tenet of business. Value investing is defined as a systematic process of purchasing high-quality stocks at an undervalued market price, quantified by intrinsic value and justified through financial analysis, then selling the stock promptly upon market price recovery.
This site teaches the investor about the four core principles of value investing. There are various in-depth sections, including tutorials about intrinsic value and security analysis.
Furthermore, there is a membership-only section that utilizes a Value Investment Fund with eight pools of different industries and 60-plus potential investments that are monitored regularly. This Fund has a six-year history of 25% annualized returns.
Cash Ratio
The cash ratio is a much more effective tool for small business than the traditional current or quick ratio.
Accounts Receivable Turnover 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 »
Net Profit
No other business term is so misunderstood, misstated, misleading or deceiving as the words ‘net profit’.
Current Ratio
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 (Introduction)
Business ratios are used to compare companies of different sizes within the same industry.
Business Ratios (Introduction) Read More »
Economies of Scale (Lesson 24)
Of the basic business principles, economies of scale has the greatest impact on profitability over any other business principle. As an enterprise’s investment is spread over higher volume the cost per unit of production decreases.
Economies of Scale (Lesson 24) Read More »
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 »
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 »