The Quick Ratio is a variation of the Current Ratio, and is also an indicator of a business’s ability to meet its financial obligations. To learn about the Current Ratio, visit our video library at www. CFOoutsource.com. As discussed in the Current Ratio video, the Current Ratio is a number that is derived by dividing […]
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The Current Ratio
The Current Ratio is a very important measure because it’s an indicator of a company’s ability to meet its financial obligations. What exactly is the Current Ratio? It’s a number that is derived by dividing current assets by current liabilities. A current asset is any asset on the balance sheet that’s expected to be realized, […]
Debt-to-Equity Ratio
The Debt-to-Equity ratio is a measure of a company’s financial leverage, and is computed by dividing Total Liabilities by Total Equity. The higher the number, the greater the financial leverage. What is financial leverage? Financial leverage has to do with the amount of return on investment that can be generated from a stated amount of […]
Statement of Cash Flow Basics
The Statement of Cash Flow is one of the three basic financial statements. Like the Statement of Operations, the Cash Flow Statement describes changes during a period of time, such as a month, a quarter, or a year. Specifically, it describes changes in cash balances during the period. The Statement of Cash Flow can be […]
Income Statement Basics
The Statement of Operations, aka the Income Statement, is one of the three basic financial statements. It’s a statement that provides details of how much your company made over a stated period of time. Unlike the Balance Sheet, which is a snapshot of a very specific point in time, the Statement of Operations describes activity […]
Getting the Most from Your CPAs
Having a good CPA is essential to the success of your business. To get the most from your CPA, it’s important to understand what they are good at and what they are not. Most CPAs are very good with taxation. This includes tax planning, preparing tax returns, and dealing with the IRS. If their practice […]