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What is Profitability Ratio?Profitability ratios are the ratios that offer an insight into a company’s ability to generate profits based on expenses and other costs associated with the generation of revenues in a particular time period. It is important because it represents the final position of a company vis-a-vis its profits.Profitability ratios are very important for a company. The goal of all businesses in the world is to make profits. Without profit, a company cannot stay competitive in the market. Moreover, when there is a loss instead of a profit, the company should be aware of this. As profits form ... Read More
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 generated from the use of fixed assets, such as land, property, and machinery. In simple words, this ratio is used to judge the obtained amount of sales generated by the conversion of assets (into sales).Formula −The formula for Fixed Assets Turnover (FAT) is as follows −$$\mathrm{\mathrm{FAT}\:=\:\frac{\mathrm{Net \:Sales}}{\mathrm{Average\:Net\: Fixed \:Assets}}}$$Or$$\mathrm{\mathrm{FAT}\:=\:\frac{\mathrm{Net \:Sales}}{\mathrm{\left ( ... Read More
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 is available with the company to meet the liabilities.In other words, the net working capital ratio provides the stakeholders of a business with the idea of the business’s liquidity by showing how effective it is in paying off the current liabilities or the short-term debt using its current assets. The ... Read More
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 many times assets are turned over into sales within a specific period of time.The activity ratio is calculated by dividing the net sales by the working capital.Types of Activity RatiosThe main types of activity ratios are as follows −Inventory Turnover RatioDebtors Turnover RatioAssets Turnover RatiosLet us see each of the ... Read More
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 current asset turnover ratio, the better the ability of the company to generate sales.Creditors. look for a higher current asset turnover ratio because it shows that a company is strong in its fundamentals. The creditors. look at the current asset turnover ratio because they are interested in the performance of ... Read More
All those who are enthusiastic about photography, having a photography website is beneficial as it is a great way to show not only your work to the world but also your talent and commitment to the art of photography. That’s not all, it also helps you to reach your prospective clients and helps to build a personal brand.Photography website can be built with ease with WYSIWYG tools, WordPress and Squarespace, but there exists little downside with these tools, you need to manually update them either every few weeks or fortnight.WordPressCreating a website using WordPress is not only easy, but also ... Read More
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 and nothing else. Therefore, the cash ratio is more restrictive in nature than the current and the quick ratio.As the cash ratio looks only at cash, creditors. like to consider this ratio more than anything else. This ratio shows the ability of the company to shed off its current debt, ... Read More
Starting your own business may be hard when you don’t have the right tools. There are many free tools and apps which are in the market that entrepreneurs can leverage to run their new businesses efficiently. With the application of right apps at the right time, business owners can organize various business processes.If you’re an entrepreneur and you want to become more efficient, productive, and successful, take a look at the below list of tools which will make you more organized and a productive entrepreneur −SlackThis is one of the best messaging app for team communication. It has powerful search ... Read More
What do interest-based ads mean? I am sure everybody has seen the online ads. Well, have you noticed how, when you log into a website and the ads show you something you would perhaps be interested in?You could just be browsing and you find the exact computer or mobile or even shoes that you need? Or if you are looking for a new car and there pops an ad for car interiors? Or you are an interior designer and logging on to any website still shows you the curtains you had seen a month ago? Or you could be looking ... Read More
Facebook, a very popular social networking site, that helps you connect with people. Some of you are well acquainted with and some you don’t, still you get a chance to make new friends and we learn a lot of things, updates on latest movies’ gossip and the list goes on. So, our Facebook account is a pass key to know everything going around the world starting from our street, city, to country and world.Just like bank accounts we prefer to keep our Facebook account private, just to ourselves, like you can share your account number with someone but not your ... Read More