If you are a business owner or an entrepreneur, you will be well aware that how you need to invest a part of your profit amount into the business for growing your business as well as for earning more profit. If there is any fund left which hasn’t been distributed to the investors or the shareholders are known as the retained earnings. With the leftover funds, one can either start investing in repaying debt, new equipment, and marketing or for product development. Retained earnings can also be … [Read more...]

Capital budgeting is the procedure wherein a business decides and assesses potential huge costs or ventures. These uses and speculations incorporate tasks, for example, constructing another plant or putting resources into a long haul adventure. Capital budgeting is comprised of two words 'capital' and 'planning.' In this unique circumstance, capital use is the spending of assets for enormous consumptions like buying fixed resources and hardware, fixes to fixed resources or gear, innovative work, … [Read more...]

The current ratio is a liquidity proportion that estimates an organization's capacity to pay transient commitments or those due inside one year. It tells financial specialists and investigators how an organization can augment the current resources on its financial record to fulfill its present obligation and different payables. Current Ratio = Current resources/Current liabilities The current ratio, otherwise called the working capital proportion, measures the ability of a business to meet … [Read more...]

Return on asset, which is also known as ROA, is counted as one of the types in return on investment or ROI. Well, It’s a metric which is used for measuring the company’s profitability on its business related to their total assets.  With the help of ratio, it indicates the performance of the company by making the comparison of the profit or net income. That means the Highers numbers in ratio, the higher the production and management efficiency by the company as well as utilizing the resources in … [Read more...]

The weighted average cost of capital or WACC is a financial ratio which helps the company in calculating the cost of their financing and assets acquired and compare the debt and business equity structure. The ratio also helps in finding out the weight of debt.  Well, management basically uses WACC for taking a decision regarding the company and whether they should use their debt or their equity to finance the purchases. Weighted Average Cost of Capital: Well, WACC has known for its … [Read more...]