Imagine you are looking at two companies before investing your money. Both show big sales numbers, both look successful — but which one is actually stronger? This is where financial ratios help.Financial ratios turn large financial statement numbers into simple comparisons that help you understand how a business is really performing. For beginners in India learning stock … [Read more...] about How to Measure a Company’s Performance: A Simple Guide for Beginners
Finance
How to write an effective business plan for investors or bankers
Business plan is a written document or road map which describe what your business is, what you plan to do by outlining your goals, industry, business structure, product or services and how you plan to make the business a success.It analyze the business prospects and gives a detail projection about its future in comparison to present situation.Before getting into how to … [Read more...] about How to write an effective business plan for investors or bankers
What is depreciation and How its calculated
One of the basic principles of an accrued accounting system is matching revenue with expenses. When a company buys assets such as building, plant and machinery, the cost is capitalized in an account. These assets are used over their useful life in the production of revenue. To match revenue with expenses for a period, management spread the cost of the assets over its useful … [Read more...] about What is depreciation and How its calculated
How to calculate return on capital employed – ROCE
To monitor business performance, investors measure the amount of profit a company has earned as a percentage to the total capital employed. This financial ratio is known as return on capital employed or ROCE.Return on Capital Employed (ROCE) of a company tells you whether the profit is sufficient considering the amount of equity and long-term debt invested to earn … [Read more...] about How to calculate return on capital employed – ROCE
Capital expenditure Vs. revenue expenditure – What is the difference
When a business makes a purchase, depending on certain factors, it's either considered as capital expenditure or revenue expenditure. To understand the concept, there are basically two areas where money is spent in an organization;In this article, we will explain how expenditures are considered as capital expenditure or revenue expenditure and what is the difference … [Read more...] about Capital expenditure Vs. revenue expenditure – What is the difference