Ratio Analysis in Accounting
Ratio Analysis is broadly categorized into four main types; Liquidity Ratios, Activity Ratios, Profitability Ratios, & Leverage Ratios.
Current Ratio- Formula, Interpretation & Example
The current ratio of a company identifies the ability of a company to pay its short-term financial obligations.
𝐀𝐜𝐜𝐨𝐮𝐧𝐭 𝐑𝐞𝐜𝐞𝐢𝐯𝐚𝐛𝐥𝐞 𝐓𝐮𝐫𝐧𝐨𝐯𝐞𝐫 𝐅𝐨𝐫𝐦𝐮𝐥𝐚- 𝐒𝐭𝐞𝐩 𝐛𝐲 𝐒𝐭𝐞𝐩 𝐂𝐚𝐥𝐜𝐮𝐥𝐚𝐭𝐢𝐨𝐧
Account receivable turnover formula ac indicates how many times you receive payment for your credit sales or convert it into cash in a given period.
𝐀𝐧𝐚𝐥𝐲𝐳𝐞 𝐘𝐨𝐮𝐫 𝐋𝐢𝐪𝐮𝐢𝐝𝐢𝐭𝐲: 𝟓 𝐁𝐞𝐬𝐭 𝐂𝐚𝐬𝐡 𝐅𝐥𝐨𝐰 𝐀𝐧𝐚𝐥𝐲𝐬𝐢𝐬 𝐑𝐚𝐭𝐢𝐨𝐬
Using cash flow analysis ratios, a company seeks out how much cash it has, where its cash is going, and what it needs to do to maintain!
Working Capital Vs Current Ratio: Difference Explained With An Example
Working Capital is the leftover amount after paying operating expenses whereas the Current Ratio determines the efficiency of current assets over current liabilities.