Imagine lending money to a friend. Before you do, you’d want to know if they have enough cash or quick assets to pay you back tomorrow. The same logic applies to companies. Creditors, investors, and analysts want to know whether a company…
Credit sales refer to a sale in which the amount owed for received goods or services will be paid at a later date. What are Credit Sales? Credit sales refer to a sale in which the amount owed for received…
EBITA or Earning before Interest tax and amortisation is often considered the surrogate for a companys earnings. Yes, you heard it right!
The bargaining power of suppliers means, the pressure that suppliers can put on buyers by changing their prices, reducing the supply or dropping the quality As you might have noticed, I have explained this using the current inflation problem in…
Cash and cash equivalents, is a line item in the balance sheet of a company signifying either cash in bank or very short term investments. What are Cash Equivalents? Cash & cash Equivalents are investment securities that are made for…
What is Empirical Probability? Empirical Probability is also known as experimental probability. Empirical probability refers to a probability that is based on historical data. In simpler words, empirical probability illustrates the likelihood of an event occurring based on historical data.e…
So, cash ratio is like the strongest measure to to check a company’s liquidity position and is calculated by dividing cash & equivalents like liquid investments to the current liabilities of the company. The higher the ratio, the better the…
So, let me give you some examples to make you understand the social audit meaning. One example of a real-life social audit is the Fair Labor Association (FLA) audit of a factory in China that produced clothing for a number…
This is a straighforward explaination of the economics concept called as substitution effect. And if you have been wondering around with the dilema of what is substitution effect then you search ends here. What is Substitution Effect? The substitution effect…
A shutdown point is a level of operation in which the company no longer benefits from continuing its operations and hence decides to shut down temporarily or permanently. The company no longer benefits from continuing production in the short run…
