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How to improve return on capital employed?

Return on capital: Return on capital or return on equity invested or capital employed is the percentage return on an investment. The return is generated from the profit the business makes from its activities. This is the formula for calculation of return on capital...

How to improve quick ratio?

Quick Ratio: Quick ratio can best a best determinant of liquidity measures within a company. As a matter of fact, it can be seen as a measure to validate the organization’s ability to meet its day to day expenses and other short-term liabilities like accounts payable...

Importance and limitation of debt to equity ratio

Introduction: Debt to equity ratio is computed by dividing the total liabilities of company by shareholders' equity. This ratio is represented in percentage and reflects the liquidity of the company i.e. how much of the debt owed by company is used to finance the...

Importance and limitation of profitability ratios

Overview: Profitability ratios are a group of quantitative values that measure a company’s profitability against its revenue, cost of sales, equity and balance sheet assets. It is a metric that measures a company’s ability to generate income from its operations over...

Importance and limitations of quick ratio

Overview: Quick ratio is a financial ratio used to measure short-term liquidity of a company where liquidity is defined as the ability of a firm to convert its most liquid assets into cash so that it could settle the its current liabilities. Quick ratio, also known as...

What is the difference between fixed asset write off and disposal?

Write off Fixed Assets A fixed asset is written off when it is decided that there is no further use of the asset. It means that asset would not be able to generate any value be it continuing or any salvage or scrap value. A write off of fixed assets include removing...

What is Fixed Assets Addition?

Meaning of Fixed Assets Fixed assets are long-term investments in the operation of entity. Long-term investments in terms of accounting conventions means the asset whose useful life is more than 12 months. These assets are illiquid in nature unlike current assets...

What is biological assets?

Overview: Biological assets are assets which are living in nature. It includes trees, animals and nowadays cannabis too as it has been made legal. The company’s management breaks down assets side of balance sheet and classifies them by type and attributing a value to...

Tips to manage fixed assets effectively

Overview: Fixed assets management is the effective process of tracking and maintaining organization’s physical assets to prevent from any kind of loses. It enables the organization to track equipments, vehicles, machineries, buildings, assess their condition, and keep...