Probir Banerjee has Published 444 Answers

How to Calculate Fixed Assets Turnover Ratio?

Probir Banerjee

Probir Banerjee

Updated on 12-May-2022 06:57:22

What is Fixed Assets Turnover Ratio?The fixed asset turnover ratio calculates a company’s ability to generate sales by using fixed asset investments. The items required to calculate fixed assets turnover are net sales which are divided by average net fixed assets. The ratio offers an insight into a company’s returns ... Read More

What is Net Working Capital Ratio?

Probir Banerjee

Probir Banerjee

Updated on 12-May-2022 06:52:43

Net working capital ratio shows how much of a company’s current liability can be met with the company’s current assets. The net working capital ratio is the measure of a company’s capability in meeting the obligations that must be paid within the foreseeable future. Therefore, it shows the liquidity that ... Read More

What are the Types of Activity Ratio?

Probir Banerjee

Probir Banerjee

Updated on 12-May-2022 06:49:17

What is Activity Ratio?The financial ratios that measure the utility of assets by converting assets into sales are known as activity ratios. These ratios are employed to measure the efficiency with which a firm manages and utilizes its assets. These ratios are also called turnover ratios because they imply how ... Read More

How is Current Asset Turnover Ratio Calculated?

Probir Banerjee

Probir Banerjee

Updated on 12-May-2022 06:44:17

What is Current Asset Turnover Ratio?The current assets turnover ratio indicates how many times the current assets are turned over in the form of sales within a specific period of time. A higher asset turnover ratio means a better percentage of sales. That is why the more the amount of ... Read More

Cash Ratio: Definition and Analysis

Probir Banerjee

Probir Banerjee

Updated on 12-May-2022 06:39:30

What is Cash Ratio?A cash ratio is the ratio that measures a company’s ability to pay off its current liabilities with cash and cash equivalents. The cash ratio is different from quick ratio and current ratio in the sense that the cash ratio considers current assets that are only cash ... Read More

How to Analyze Asset Turnover Ratio?

Probir Banerjee

Probir Banerjee

Updated on 15-Apr-2022 13:14:10

What is Asset Turnover Ratio?The assets turnover ratio explains the turnover of assets into sales. It is an efficiency ratio that implies a firm’s ability to generate sales from the assets. For this purpose, the net sales figure is compared with the total average assets.The total asset turnover ratio measures ... Read More

How to Calculate Current Ratio?

Probir Banerjee

Probir Banerjee

Updated on 15-Apr-2022 13:12:09

What is Current Ratio?The correct way to measure the current ratio is to divide current assets by current liabilities.$$\mathrm{Current\: Ratio\:=\:\frac{Current\: Assets}{Current\: Liabilities}}$$Here, current assets include items that are short-term in nature. Both assets and liabilities in the current ratio are meant for items that exist within one year from the ... Read More

What is Quick Ratio in Finance and How to Calculate It?

Probir Banerjee

Probir Banerjee

Updated on 15-Apr-2022 13:10:40

What is a Quick Ratio?Cash is an indispensable resource for business firms as cash works as a fuel to run business operations successfully. Lack of cash may push a company to insolvency which is an inability to pay the current expenses. Long-term insolvency may push firms to bankruptcy. Therefore, knowing ... Read More

Importance of Leverage Ratio Calculation in Finance

Probir Banerjee

Probir Banerjee

Updated on 15-Apr-2022 12:43:49

Leverage ratios show the debt position of a company. Debt is an important part of finance for a firm. While debt is necessary to fund projects, excessive debt can be a sign of financial illness of a firm. In fact, both excess and too less availability of debt is detrimental ... Read More

What are the Types of Leverage Ratios?

Probir Banerjee

Probir Banerjee

Updated on 15-Apr-2022 12:39:20

Purpose of Leverage Ratio CalculationTo determine the long-term financial position of a company, its financial leverage is calculated. The method of increasing shareholder’s return using debt is known as Financial Leverage. Leverage ratios are, thus, connected to the processes where debt is used to magnify the shareholder’s returns.In fact, excessive ... Read More

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