If, on the other hand, a company has £3 million in cash and marketable securities and £3.5 million in liabilities then the cash ratio is less than 1, at 0.85. This means the business would not be able to cover all the liabilities it is carrying using the cash and marketable securi...
such as debt levels, expenses, and investment strategies. A high savings ratio may not necessarily translate to financial security if there is excessive debt or insufficient income. Conversely, a low savings ratio may not indicate poor financial management if there are valid reasons, such as...
What is a good cash flow ratio? A good cash flow ratio is generally above 1. A ratio greater than 1 indicates that the company can cover its short-term liabilities with its cash generated from operations. This ratio is calculated by dividing operating cash flow by current liabilities. ...
When you make banking transactions, you might have come across the term ‘Cash Reserve Ratio' or CRR many times. Have you wondered what it means? Cash Reserve Ratio is also known as CRR, is decided per their country. In India, the Reserve Bank of India, also known as RBI, decides the...
The amount of cash that is “swept” using this feature is the balance that remains after all other business or personal financial obligations have been satisfied. For a corporation, this means the amount of money that is left after all regular debt payments and operational expenses have been ...
Lenders often examine your debt-to-income ratio, which is the ratio of your monthly debt payments to your monthly income. A lower ratio indicates greater financial stability and a higher capacity to manage additional debt. A favorable debt-to-income ratio can result in a higher cash credit ...
Higher free cash flow gives a company the flexibility to invest in its future while maintaining operations.
I'll explain what an exclusion ratio is in more detail for people who are not familiar with it: When an immediate annuity is purchased with after-tax money, the IRS refers to that transaction as a "non-qualified" purchase. This means that either the full premium or a portion of it had...
A high cash ROA ratio means the company earns more net income from $1 of assets than the average company, which is a sign of efficiency.A low cash ROA ratio means a company makes less net income per $1 of assets, which is a sign of inefficiency. The issue is that net income is no...
What Does a Low Interest Coverage Ratio Indicate? A poor interest coverage ratio, such as below one, means the company's current earnings are insufficient to service its outstanding debt. The chances of a company being able to continue to meet itsinterest expenseson an ongoing basis are still...