The cash flow-to-debt ratio is a financial metric used to assess a company’s ability to repay its debts. This ratio is calculated by dividing a company’s cash flow from operations by its total debt. The higher the ratio, the more able a company is to repay its debts. This ratio is a important for creditors … Read more
How to Calculate Gross Profit Margin (GP) and What It Tells You How can I calculate profit? The first step is to calculate your net income. This is your total revenue minus your total expenses. Next, you will need to calculate your operating expenses. This includes your cost of goods sold, your selling, general, and … Read more
What is an operating ratio? How do you calculate an operating ratio? How do you find the operating percentage? Operating margin, or operating income margin, is a company’s operating income divided by its revenue. The operating income is a company’s total revenue minus its cost of goods sold and operating expenses. To calculate a company’s … Read more
The Q ratio is a measure of the market value of a company’s assets relative to the replacement cost of those assets. The ratio is also known as Tobin’s Q. The Q ratio is named after James Tobin, a Nobel Prize-winning economist who developed the measure in 1969. Tobin’s motivation for creating the ratio was … Read more
What Is the Price/Earnings-to-Growth (PEG) Ratio and How Is It Calculated? How do you calculate growth rate of PEG? The growth rate of PEG is calculated by dividing the percentage change in earnings per share by the percentage change in the price to earnings ratio. What is difference between P E and PEG ratio? PEG … Read more
Return on revenue (ROR) is a company’s total earnings divided by its revenue. It is a measure of how efficiently a company generates profit from its sales. A higher ROR indicates a more profitable company. To calculate ROR, divide a company’s net income by its revenue. net income / revenue = ROR For example, if … Read more
What is a null hypothesis and how is it used in investing? What is the main purpose of developing the null hypothesis? The main purpose of developing the null hypothesis is to test whether the results of a study are due to chance or not. What does the null hypothesis predict? The null hypothesis predicts … Read more
The sacrifice ratio is the percentage reduction in real disposable income required to reduce inflation by one percentage point. The sacrifice ratio is often used as a measure of the cost of reducing inflation. What are the 5 types of ratio? 1. Liquidity Ratios 2. Activity Ratios 3. Debt Ratios 4. Margin Ratios 5. profitability … Read more
What is the Total-Debt-to-Total-Assets Ratio? The Total-Debt-to-Total-Assets Ratio (DTTA) is a financial ratio that measures the percentage of a company’s total debts to its total assets. What is a good Total-Debt-to-Total-Assets Ratio? A good Total-Debt-to-Total-Assets Ratio varies by industry, but a DTTA of 60% or less is generally considered good. What does a debt ratio … Read more
. How to Calculate Z-Score: To calculate a z-score, you need to know the mean and standard deviation of the data set. Then, you subtract the mean from each data point and divide by the standard deviation. How do you find the Z-score step by step? To calculate a Z-score, you first need to calculate … Read more
