Advantages and Disadvantages of Absolute Liquidity Ratio Absolute liquidity ratio is the financial ratio used to evaluate the company liquidity ratio. Similar to the current and quick ratio, it accesses the company’s ability to pay off the current liabilities. However, the absolute liquidity ratio uses only the cash and marketable ...

Advantages and Disadvantages of Return on Investment Return on Investment is the financial ratio that measures how well the investment is. It is the percentage of the profit over the initial cost. A good investment will generate a high return on investment and will be able to recover in a ...

What is Operational Gearing? Operational Gearing is the company’s behavior between spending on fixed cost and variable cost in order to generate a sale, it is also known as operating leverage. Variable cost is the cost that will increase or decrease in relation to sales. The more sale we make, ...

Statement of Source and Use of Fund Statement of source and use of the fund is the change of the company’s financial position from the beginning to the end of the accounting period. It shows the source of cash that the business has been generated over the year. On the ...

Net Present Value (NPV) with Inflation Net Present Value (NPV) is the difference between the present value of cash inflow and cash outflow of a project over a period of time. It uses to evaluate the investment proposal in order to select the most profitable project. It sums all the ...

Market Size and Market Share Variance Market Size Market Size is the total potential purchase of one particular product or service in the market over a given period of time.  It is the maximum of the company’s revenue if it can get 100% of the market share. Calculating the market ...