An in-depth look at accounting ratios, which are vital tools in financial statement analysis to assess a company's performance and position.
Capital Employed is the total amount of capital that a company uses to generate profits and includes shareholder's equity and long-term debt, or the sum of fixed and net current assets. This metric is pivotal in ratio analysis for assessing the efficiency and profitability of a company's capital investments.
Common-size financial statements are a method of analyzing and comparing financial statements by expressing individual elements as percentages of the total. This allows for easier comparison across companies and industries.
Comparative Credit Analysis is a method of company evaluation in which a firm is compared with other similar firms that have a desired credit rating to decide on appropriate accounting ratio targets for the company being analyzed.
Financial analysis involves evaluating businesses, projects, budgets, and other financial entities to determine their performance and suitability. This analysis is used to gauge a company’s financial health and operational efficiency.
Financial appraisal refers to the use of financial evaluation techniques to determine the preferred option among various alternatives, often employing discounted cash flow methods, ratio analysis, profitability index, or payback period.
An in-depth analysis of financial statements to assess a business's performance and position, using ratios to evaluate profitability, solvency, working capital management, liquidity, and capital structure.
Interfirm comparison is a process used to evaluate the performance of similar organizations by analyzing their accounts and statistical data through ratio analysis.
Inventory turnover, also known as stock turnover, is a ratio that measures the frequency with which items of stock are used or sold annually.
Financial metrics used to measure a company's ability to generate profit relative to other key variables, such as sales, assets, or equity.
Ratio analysis is the use of accounting ratios to evaluate a company's operating performance and financial stability. Examples include return on capital employed and gross profit percentage for profitability assessment. Additionally, the liquid ratio examines solvency, while gearing ratios evaluate the company's financial structure.
