What is Net Current Assets Turnover Ratio?The net current assets turnover ratio expresses the ability of a company’s working capital in promoting the sales of the company. Net current assets are also known as working capital. The ratio shows to what extent the day-to-day expenses fuel the net sales of ... Read More

Profit can be measured in a number of ways. For example, Gross Profit is the profit that is the difference between the manufacturing cost of goods sold and sales. This is called Earnings Before Interest, Depreciation, Taxes, and Interests Amortization (EBIDTA) by many firms. However, many other companies calculate net income ... Read More

What is the Asset Turnover Ratio?The asset turnover ratio is a ratio that measures the ability of a firm to generate sales depending on its assets. It is calculated using net sales and average total assets. In other words, the net asset turnover ratio shows the efficiency of a company ... Read More

What is Interval Ratio?The Interval Ratio or Interval Measure is the ratio that calculates the funds that a company required to run its operations. This ratio helps the companies survive by letting them know how much funds they will require for a particular project on a long-term basis.In other words, ... Read More

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 ... 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 ... 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 ... 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 ... 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 ... 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 ... Read More