That is the company generates a high revenue price for each dollar of working capital spent. A low ratio indicates your business may be investing in too many accounts receivable and inventory to support its sales. This could lead to an. Read more
However, the same cost may be relevant to a different management decision. Consequently, it is important to formally define and document those costs that should be excluded from consideration when reaching a decision. Because an irrelevant cost may be a relevant. Read more
The Threshold Rate of Return may represent an acceptable rate of return above the cost of capital to entice the company to make the investment. Choosing the proper discount rate is important for an accurate Net Present Value analysis. A capital. Read more
We expect to offer our courses in additional languages in the future but, at this time, HBS Online can only be provided in English. Our platform features short, highly produced videos of HBS faculty and guest business experts, interactive graphs and. Read more
Liquidity ratios include current ratio, quick ratio, etc. Study the quick ratio definition, discover how to interpret the formula, and work through quick ratio examples. The liability to equity ratio measures the gearing risk or leverage of the company. It measure. Read more
When capital rationing and timing differences are both present, the business must consider both factors in choosing between mutually exclusive projects. One method is to use the modified profitability index (MPI), which is the ratio of EAA to initial investment. The. Read more
A critical piece of information for managers is the ratio of direct to indirect costs in the total cost. A cost that is easily traceable to a particular cost object is known as direct cost. For example, if Bata Shoes Company. Read more
On April 01, 2019, some of the company’s debenture holders decided to convert their holdings into equity shares, which increased them by 50,000. Shares outstanding refers to the amount of stock held by shareholders, including restrictive shares held by company insiders.. Read more
A weighted average can be more accurate than a simple average in which all numbers in a data set are assigned an identical weight. Determine the cost of inventory on 30 April using the weighted average method of costing. Note that. Read more
If the manufacturer maintains selling prices at the existing level, the cost reduction of 25 cents per unit represents $2,500 in savings on each production run. If, however, a company must pay overtime or extra hours for workers as production is. Read more