The current ratio shows a company’s ability to meet its short-term obligations. The ratio is calculated by dividing current assets by current liabilities. An asset is considered current if it can be converted
Debt-to-income ratio (DTI) measures the amount of debt you have against your overall income. It’s one of the most important factors in your mortgage applications because it gives lenders a good idea of whether you’ll be able to make your monthly payments. Generally, a good debt-to-inco...
services.The taxpayer shall compute the output tax for the period on the basis of t he sales value and collect the tax payable from the purchasers in addition to the pay ment on goods and services. If the sales prices of the goods and services are tax inclusive prices,the taxpayers have ...
the current ratio is 1.4. To improve this, consider using some of the cash to pay off the debts. If you use $20,000 of the cash to pay off debts, the ratio changes to $30,000 in current assets divided
The accounting equation is also known as the basic accounting equation or the balance sheet equation. Key Takeaways The accounting equation is considered to be the foundation of the double-entry accounting system. It shows on a company’s balance sheet that a company’s total assets are equal ...
What is the formula for this ratio? Explain briefly. Explain how to compute accounting ratio liability divided assets. What is the difference between the current ratio and quick ratio? What does each measure? What is the difference between the current ratio and the quick ratio? What does ...
You compute the value of the penalty by multiplying the replacement cost ($500,000) with the multiplier, 0.25 (1 – 0.75). So by violating the coinsurance clause, you are not only unable to receive the full replacement cost, but you also have to pay a hefty penalty. ...
A solvency ratio examines a firm's ability to meet its long-term debts and obligations. The main solvency ratios include the debt-to-assets ratio, the interest coverage ratio, the equity ratio, and the debt-to-equity (D/E) ratio.
Why is this term useful in accounting? What do liquidity ratios represent? Give an example of one of them. Which ratios are used to measure liquidity? (a) What is the purpose of the liquidity ratio? (b) How is it used to determine the strengths and weaknesses of a company?...
Money can be tainted when it is associated with direct or indirect harm to others. Deciding whether to accept “dirty money” poses a dilemma because money can be used to help others, but accepting dirty money has moral costs. How people resolve the dile