Cash return on capital invested (CROCI) is a financial ratio that measures how much cash a company generates from its capital investments. It is calculated by dividing a company’s operating cash flow by its total capital investment. Operating cash flow is the cash a company generates from its normal business operations. It includes things like … Read more
How to Calculate Total Expense Ratio (TER). How is TER deducted? TER, or total expense ratio, is the percentage of a fund’s assets that are used to cover the fund’s operating expenses. The remaining percentage is available for investment. The lower the TER, the more efficient the fund is and the better it is for … Read more
The TIE ratio is a financial ratio that measures a company’s ability to generate income from its interest-bearing investments. The ratio is calculated by dividing a company’s interest income by its total interest expense. A high TIE ratio indicates that a company is generating a lot of income from its interest-bearing investments. This is generally … Read more
Cost of goods sold (COGS) is the direct costs attributable to the production of the goods sold in a company. This amount includes the cost of the materials used in creating the good, the labor costs used to produce the good, and the overhead costs related to the good. COGS does not include indirect costs, … Read more
What is the reserve ratio and how is it calculated? What are reserves quizlet? Reserves are funds that a company sets aside for future expenses. The purpose of reserves is to provide a cushion for unexpected costs or to fund future growth. Reserves can be used to pay for expansion, acquisitions, or other investments. There … Read more
The equation is Assets = Liabilities + Equity.. What is the accounting equation? How do you calculate it? What affects the accounting equation? There are a few different things that can affect the accounting equation, which is essentially a way of representing a company’s financial health. The equation is Assets = Liabilities + Equity, and … Read more
The multiples approach definition is a method of valuation that uses market-based ratios to estimate the value of a company. The ratios are derived from the prices of similar companies in the market. The multiples approach is also known as the relative valuation approach. What are the five methods of valuation? The five methods of … Read more
ROAA is a profitability ratio that measures the net income produced by a company as a percentage of its average total assets. ROAA is also sometimes referred to as “return on assets employed” or “return on average capital employed”. The formula for ROAA is: ROAA = Net Income / Average Total Assets where: Net Income … Read more
Definition in Math and Formula for Calculation. A mean is the average of a set of numbers. To calculate the mean, add up all of the numbers in the set and then divide by the number of items in the set. The mean is also known as the arithmetic mean or the average. What the … Read more
. What is the Cash Ratio? The Cash Ratio is a financial ratio that measures a company’s ability to pay its short-term obligations with its liquid assets. Does cash ratio include inventory? No, the cash ratio does not include inventory. The cash ratio is a liquidity ratio that measures a company’s ability to pay its … Read more
