Bookkeeping

Companies with high equity multipliers are considered riskier as they have more debts to service, but they Accounting Periods and Methods may also provide higher returns on equity if profitable. Equity multiplier ratio is a number that establishes the relationship between the debt and the equity portion of the finances of a company’s assets. In …

Equity Multiplier: A Detailed Examination of its Role in Financial Analysis Read More »

A favorable net working capital ratio is 1.5 to 2.0, depending on the industry the business is in. Therefore, to adequately interpret a financial ratio, a company should have comparative data from previous periods of operation or its industry. And then, we need to find the difference between the current assets and the current liabilities …

Working Capital: Formula, Components, and Limitations Read More »