Fixed assets turnover ratio determines how efficiently a company is using it’s fixed assets to generate sales. Its also known as efficiency ratio. Before getting into the calculation part, let us first understand why fixed assets turnover ratio is required.Business owners invest their hard earned money in to the company to get a piece of company’s earnings. Company profit … [Read more...] about How to calculate Fixed assets turnover ratio – FAT
How to calculate accounts payable turnover ratio
To find out how efficient the company is at paying to its creditors, suppliers or short term obligations, accounts payable turnover ratio is calculated.Accounts payable is a short term liability shown in the current liability section on the balance sheet. It shows how much a company owes to its suppliers and creditors as at the balance sheet date. It's also known as average … [Read more...] about How to calculate accounts payable turnover ratio
Beginner’s Guide to Understanding Assets on the Balance Sheet – What a Business Really Owns
When most beginners hear the word assets, they think only of cash in the bank. In real life, assets are much wider than that. Assets are all the useful things a business owns that help it run day-to-day or earn money in the future.In this guide, we will understand what assets really mean, the two main types of assets, and how they work inside small and big businesses around … [Read more...] about Beginner’s Guide to Understanding Assets on the Balance Sheet – What a Business Really Owns
What is price to book value ratio and how to calculate it
Many investors believe price to book ratio is a important factor when looking for a bargain in the market. Price To Book Ratio is calculated to compare market price of a stock with its book value.Price to Book (P/B) ratio is calculated by dividing current market price of the stock by the book value per share. Its also called as market-to-book ratio.Investors widely … [Read more...] about What is price to book value ratio and how to calculate it
What is Shareholders’ equity on the balance sheet
A company’s balance sheet has three major sections, assets, liabilities and stockholders’ equity. Liability represents the total debt of the company and owner's capital represents shareholders’ ownership. Liabilities and owner's capital are the two major sources of financing the assets of a company.Total assets must equal the total liabilities and stockholders equity in … [Read more...] about What is Shareholders’ equity on the balance sheet