Analyst can apply financial analysis tools and techniques to evaluate the past and future financial performance, assess credit risk, and screen potential equity investments.Important concepts such as assessing credit quality, and analyst adjustments to financial statements in order to make them comparable with other companies’ reports form part of the applications of Financial Statement Analysis.
Non-current liabilities affect a company’s liquidity and solvency and have consequences for its long-term growth and viability. In this lesson, we will learn about long-term liabilities such as bonds, leases, and pension plans, and how they impact financial statements.
A company’s accounting policies (such as depreciation choices, and valuation of assets) can cause differences in taxes reported in financial statements and taxes reported on tax returns. In this lesson “Income Taxes” we will learn about several issues relating to deferred taxes.
Long-lived assets refer to the long term assets that include property, plant and equipment (PPE), natural resources, intangible assets, and financial assets.
An overview of what transfer pricing is and how it affects companies of various sizes and industries. It provides examples of intercompany transactions, an overview of U.S. rules and penalties, compliance information and more.
Irrespective of whether you are a big corporation or a small start-up, your marketing efforts will determine how much your market grows. It is critical therefore to be prudent about where you put your marketing dollars. If the going is good, it’s important your consumers know about your deals and choose you over other products. […]
Equity or debt? All businesses that need financing will do so in these two forms. There are however some large companies that have managed to totally become debt-free. Some examples are Google, Amazon, and Apple. When you hear that these companies have no debt, it sounds like a great deal. But is it really that […]
Here’s the thing. You’re doing great in your career and by looking at your performance your boss has promoted you to be the manager for your unit. You’ve got a great salary hike but it has also resulted in a whole lot of added responsibility. Now, you’re not just an employee who had to prove […]
In the previous articles we learned about the key liquidity ratios (current ratio, quick ratio, cash ratio, and defensive interval ratio), and the Cash Conversion Cycle. The following video from Bionic Turtle provides a summary of all these liquidity ratios along with examples.
Cash Conversion Cycle is an important concept in liquidity analysis. The cash conversion cycle indicates the time (no. of days) it takes for the cash invested in the business to be converted back to cash. In other words it is the total time taken to sell its inventory, collect the receivables, and pay the creditors. […]