Investors calculate liquidity ratio, also known as quick ratio or relationship pounce. This relationship between inventory and prepaid expenses, including current ratio, exclude, and the limited assets cash and items that can quickly convert into cash. This limited categories of assets are known as solid or liquid assets. Acid-text ratio is calculated by dividing the cash and cash equivalents divided by the total short-term debt.
This relationship is also known as pounce ratio to stress that you for worst case scenario, where the company's creditors can throw on their activities and issue instant payment of debts. Short-term liabilities do not have the right to demand immediate payment, except in exceptional circumstances. This relationship is a conservative way to look at the company's ability to pay its short-term debts.
One factor that affects a company's bottom-line profitability or uses of the debt. A company can implement a financial lever of profit, which means that it deserves more earnings on the money that is accepted then the interest rate paid for the use of the borrowed money. A large part of the net income of a company of the year can be caused by financial leverage. Relationship ROA determines the net assets by dividing profit before interest and tax (EBIT).
An investor can compare ENTERTAIN with the rate applied by the money borrowed. corporation If an enterprise ENTERTAIN net profit of the company in the capital city is 14 percent, and interest on debt is 8%, 6% more than what it will pay in interest.
ROA is a good reference for the interpretation of performance for profit, apart from establishing financial gain or loss. ROA is called a capital usage test that measures how profit and tax of interest was earned capital company.
http://backlinkss.blogspot.com
http://stevensoft.blogspot.com
http://articletubes.blogspot.com
http://weddingartpro.blogspot.com
http://stevenwang78.blogspot.com
http://technologicalarticles.blogspot.com
http://designertube11.blogspot.com
No comments:
Post a Comment