Small Business Finances The small business market can be very competitive in more ways than one. The most important thing to realize when running a small business is that it can be very difficult to take care of all aspects of your business. With that understanding, it will also become clear how much of the […]
Solvency Ratios | Example | Formula | Analysis
What is Solvency Ratios: Solvency Ratios is used to measure the capability of a business to fulfill its long-term debts. Furthermore, solvency ratios identify going concern issues and a company’s ability to pay its bills in the long term. Solvency ratios is also known as leverage ratios, Many people puzzled between solvency ratios with liquidity ratios. […]
Liquidity Ratios | Example | Formula | Analysis
Liquidity Ratios Liquidity Ratios examine the capability of a company to repay both its current liabilities as they become due along with their long-term liabilities as they become current. In other words, Liquidity Ratios measure how quickly assets can be turned into cash in order to pay the company’s short-term debts. Liquidity is not only […]
Financial Ratio and its Analysis | Purpose | Importance | Formula | Uses
Financial Ratio Analysis Financial Ratios are mathematical assessments of financial statement accounts. Financial Ratio Analysis is performed by comparing two items in the financial statements. The resulting ratio can be interpreted in a way that is not possible when interpreting the items alone. In simple words, we are analyzing interrelationships. The connections between the financial […]
Days Sales Outstanding (DSO) Ratio Formula | Calculation | Example | Analysis
Days Sales Outstanding (DSO): Days Sales Outstanding is also called the average collection period or days’ sales in receivables, measures the number of days it takes a company to collect cash from its credit sales. Alternatively, it displays how well a company can collect cash from its customers. The quicker cash can be collected, the […]