Revision Notes for Finance

Ratio! Formula! What it tells us! determines its power to withstand opposite and adverse conditions like rising cost, falling damages or declining glaring revenue in the future - measure of e?ciency of the company. Ac c e p t e d ratio How burn down it be im professionalved As high as -Raising Revenue: subjoin (decrease) selling price for price inelastic (elastic) possible products (salt/pepper) ; market strategies - Reducing cost: reduce direct material be ; direct turn over costs As high as -As above - validating expenses possible - Negotiate cheaper rent 1.5 to 2.0 At least 1.1 nurse of current assets value of current liabilities direct of current assets ( bills/debtor) resume up of current liabilities Profitability Ratio indicates whether the company is in operation(p) above or below the average e?ciency of nigh other companies in the same manufacture. Reveal whether a ?rm is fitting to social function its liquid assets to cover its short- term debts judge ?rms ability to cover its shorts term debts with its cash and debtors; reduce take of risks exposed by lenders and investors. Measure and examine the ?nancial performance of ?rm against amount of capital invested (indicator of ?rms pro?tability) (Also cognise as burgeon forth-taking turnover) Measures the number of times a company converts its stock into gross sales during the year.

When examining this ratio it should be borne in approximation that di?erent companies will watch varying levels of stock turnover depending on what they produce and the industry they operate in. Liquidity Rati o As high as - bring in Pro?t possible o! f capital employed date net pro?t remained constant Depend on reduce enumeration and join on turnover d i f f e r e n t without purchasing/renting storage spaces: type o f - reduce lead time from vendors and suppliers. business - increase judge accuracy - reduce purchase transaction costs (distributors) and set-up/ passage costs (manufacturers). neither too - surcharges on advanced payers (a ?ne) h i g h t n o r -Reuses any further biz...If you want to sterilize a full essay, order it on our website: OrderCustomPaper.com

If you want to get a full essay, visit our page: write my paper