advertising Get “AccountingCoach Pro” only with $49 (one-time payment) to master this knowledge point. Start our free accounting course Now!Net cash flow from operating activities represents the net increase or decrease in cash form the operations. There are two methods: the direct and indirect method of cash flow. The direct and indirect method of cash [...]
advertising Get “AccountingCoach Pro” only with $49 (one-time payment) to master this knowledge point. Start our free accounting course Now!Cash concludes cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that can be convertible into readily known amounts of cash, which are insignificant risk of value changing. Bank overdrafts may be [...]
advertising Get “AccountingCoach Pro” only with $49 (one-time payment) to master this knowledge point. Start our free accounting course Now!Trading profit margin = Trading profit(before interest, investment income and tax)/Sales revenue*100% It can describe more accurately the trading performance. Trading profit is gross profit minus interest, investment income and tax. It is equally useful and [...]
advertising Get “AccountingCoach Pro” only with $49 (one-time payment) to master this knowledge point. Start our free accounting course Now!Gross profit percentage = Gross profit/Sales revenue*100% Higher gross profit percetage often means good sign for the company. A company should keep enough gross profit percentage in its business. Because gross profit = revenue – cost [...]
advertising Get “AccountingCoach Pro” only with $49 (one-time payment) to master this knowledge point. Start our free accounting course Now!Return on capital employed(ROCE) is known as the primary ratio because it’s the most important measure of profitability. The ratio shows how efficiently a business is using its resources. Return on capital employed(ROCE) = Profit/Capital employed*100%
advertising Get “AccountingCoach Pro” only with $49 (one-time payment) to master this knowledge point. Start our free accounting course Now!According to the analysis of income statement, as a manager or a master, you can make more measure to improve the performance of your company. Income statement includes: revenue, cost of sales, gross profit, other income, [...]
advertising Get “AccountingCoach Pro” only with $49 (one-time payment) to master this knowledge point. Start our free accounting course Now!Equity to assets ratio = Equity share capital plus reserves/Total assets*100% The equity to assets ratio indicates the finance and profitability of the company. It shows what proportion of total assets is financed by equity, and [...]
advertising Get “AccountingCoach Pro” only with $49 (one-time payment) to master this knowledge point. Start our free accounting course Now!Current ratio = Current assets/Current liabilities The current ratio measures the adequacy of current assets to meet short-term liabilities. Traditionally, a figure of 1.5 is regarded as the norm. When you’re comprasing the current ratio, you [...]
advertising Get “AccountingCoach Pro” only with $49 (one-time payment) to master this knowledge point. Start our free accounting course Now!Accounts payable payment period = Accounts payable/Credit purchases*365 days The radio can be compared to previous years. A long period shows that it represent a source of free finance, or indictes the company is unable to [...]
advertising Get “AccountingCoach Pro” only with $49 (one-time payment) to master this knowledge point. Start our free accounting course Now!Accounts receivable collection period = Trade receivables/Credit sales revenue*365 days Please note the trade receivables used may be a year-end figure or the average for the year. An increasing accounts receivable collection period is usually a [...]
