A company’s ability to pay its debts on the amount of income it’s earning is expressed as the times interest earned, or “TIE,” ratio. It’s also sometimes referred to as an interest coverage ratio or debt service ratio. It’s a solvency ratio that can dictate a company’s ability...
To get a better handle on what compound interest means for your credit card debt, divide the APR by 12 to compute the monthly percentage rate. Then multiply that rate by the average daily balance to arrive at your estimated interest charges for the month. The formula would be: APR/12...
In fact, Excel has a built-in financial function - FV function - which is designed to return the future value of an investment based on the values of a few variables. Begin by inputting = FV in the formula bar, and you will see the values required to compute a future value. Before ...
but it would now represent only a 4% return on his $150 cost. The book value of the business would still increase by 6% (to $106) and the market value of the investor’s holdings, valued consistently at 150% of book value, would similarly increase...
Calculating the home office deduction using the standard method involves completing IRS Form 8829 to compute the actual amount of the deductible home office expenses.10The first step in computing expenses is to determine the square footage of the workplace and divide that by the total square footag...
What is the formula to compute annual straight-line depreciation? Fill in the blank: An amortization method that allocates an equal amount of bond discount or premium to each interest period over the life of the bond is known as ___. Given the fol...
Using these figures, you can compute the break-even point using the formula: Fixed Costs / (Average Price – Variable Costs) = Break-Even Point. Suppose you are launching a boutique coffee roasting business. Your fixed costs for the first month are $2,000. You purchase raw coffee beans at...
The negative energy and bad habits of toxic people can rub off on you with regular exposure. Limit the times you spend with them as much as possible. Find a way to surround yourself with hope-filled individuals. People who really support and care for you will be able to tell the truth ...
From there, you can compute the critical financial ratios. Read the notes to the financial statements: The notes (or footnotes) provide additional details and explanations about the company's accounting policies, significant transactions, and other important information that may not be clear from the...
CFA Institute then uses a methodology to determine a minimum passing score that is applied to each level of the exam. That score is not made public. Pass rates for CFA Level I and Levels II and III are given out for each exam window. For those who passed, congratulations. For those ...