junio 2023

Solvency ratios and liquidity ratios are similar but have some important differences. Both of these categories of financial ratios will indicate the health of a company. The main difference is that solvency ratios offer a longer-term outlook on a company whereas liquidity ratios focus on the shorter term. It is an important https://quick-bookkeeping.net/ metric which […]

To calculate the average sales, divide the total sales by the number of items sold. Companies may also compare the average collection period with the credit terms extended to customers. For example, an average collection period of 25 days isn’t as concerning if invoices are issued with a net 30 due date. However, an ongoing

One such item that affects two areas within the cash flow statement includes interest. FCF can be calculated by starting with cash flows from operating activities on the statement of cash flows because this number will have already adjusted earnings for non-cash expenses and changes in working capital. Investing activity cash flows are those that

Short-term loans are factored under a company’s current liabilities. Securing the loans are the company’s existing assets and inventory. Because these loans have a short repayment schedule, the balance of the entire loan is recorded. Therefore, the next interest payment will be smaller than the previous interest payment. To calculate the remaining balance for each