The formula is: Current ratio =Total current assets Total current liabilities The debt ratio indicates the proportion of a company’s assets that is financed with debt. The formula is: Debt ratio =Total liabilities Total assets 1.Accrual basis of accounting:the accountant records the transaction ...
Accruals are revenues earned or expenses incurred that impact a company's net income even though cash hasn't yet changed hands. Accrual accounting is preferred by GAAP. more Internal Rate of Return (IRR): Formula and Examples The internal rate of return (IRR) is a metric used in capital ...
Now, let's calculate the cash flow accrual ratio using the formula below: cash flow accrual ratio = (net income - operating cash flow - investing cash flow) / (((beginning NOA + ending NOA) / 2)) Using the formula stated above, Company Alpha's cash flow accrual ratio is: ($1,500...