Financial Ratios

What is Annualized Total Return? And How to Calculate it?

Investors can hold several assets as a part of their portfolio. Usually, these assets come from various classes. Investors invest in those classes to ensure they can achieve diversification in their portfolios. However, achieving a diversified portfolio isn’t the only crucial factor when choosing assets. Investors also consider the risks and returns associated with their …

What is Annualized Total Return? And How to Calculate it? Read More »

What is the Advertising to Sales Ratio? And How to Calculate It?

Financial ratios are numerical values that calculate the relative magnitude of one financial figure to another. Usually, it looks at the comparison between two financial items. These items may relate to the balance sheet or income statement. In some instances, they may also consider the statement of cash flow figures. However, these ratios reveal more …

What is the Advertising to Sales Ratio? And How to Calculate It? Read More »

How to Calculate Activity Ratios?

Accounting ratios compare the relative magnitude of a financial figure to another. These ratios help stakeholders understand a company’s operations better. In most circumstances, accounting ratios require metrics from financial statements. However, these metrics may not provide crucial information on their own. Therefore, by putting them through these ratios, stakeholders can obtain better insights into …

How to Calculate Activity Ratios? Read More »

What Is a Good Acid Test Ratio? Here Is What You Should Know

Accounting ratios are metrics that allow stakeholders to calculate the relative magnitude of two selected values. These values come from a company’s financial statements, usually the balance sheet and income statement. Usually, stakeholders use various accounting ratios, which fall under several categories. For example, these may include liquidity, profitability, leverage, etc. In most circumstances, accounting …

What Is a Good Acid Test Ratio? Here Is What You Should Know Read More »

What is the Book-to-Bill Ratio? (Formula, Calculation, and Example)

For companies, calculating and analyzing metrics provides meaningful information about various aspects. Companies use metrics to measure their performance in various fields. Similarly, these metrics help them determine how they are doing compared to historical information or other companies. The use of these tools differs from one company to another. Similarly, over time the requirements …

What is the Book-to-Bill Ratio? (Formula, Calculation, and Example) Read More »

How To Calculate Coefficient Of Correlation? (Explanation)

Statistics have extensive implications in every field and industry, from pharmaceuticals to sports. On one side, the probability is used to find the chances of the desired outcome in sports; the statistical analysis guides the data collection and analysis in a census. Similarly, the financial management of any business entity is incomplete without statistical analysis. …

How To Calculate Coefficient Of Correlation? (Explanation) Read More »

What is Operating Profit? (Definition, Using, Formula, And More)

Definition: Operating Profit is the type of profits recorded in the entity’s financial statements for the period after the deduction of operating expenses from Gross Profit. This profit is before charging interest expenses and tax expenses of the period. Operating Profit is reported in Income Statements rather than Balance Sheet. All other non-operating profits and expenses …

What is Operating Profit? (Definition, Using, Formula, And More) Read More »

Operating Performance Ratios Analysis (Definition | Using | Formula | Example | Explanation)

Overview Operating performance refers to evaluating a company’s ability to utilize its resources efficiently. It can be measured in terms of assets and equity sources. The focus of operating performance analysis is to analyze the efficient use of resources to generate sales. Another way of looking at operational performance is the conversion of sales into …

Operating Performance Ratios Analysis (Definition | Using | Formula | Example | Explanation) Read More »