Financial Ratio Analysis: Liquidity, Debt, and Asset Turnover
Liquidity Ratios
Liquidity ratios measure a company’s ability to meet its short-term obligations.
- Current Ratio: Current Assets / Current Liabilities. An ideal value is between 1.5 and 2. A ratio less than 1.5 may indicate problems with short-term payments and a higher probability of insolvency. A ratio greater than 2 may suggest that the company has idle current assets and low profitability.
- Quick Ratio (Acid-Test Ratio): (Realizable Assets + Available Assets) / Current Liabilities. An ideal value
Marketing Essentials: Target Markets & Strategies
Marketing Essentials: Target Markets and Strategies
Marketing is the crucial task that links a business to its customers by identifying and fulfilling their needs. It ensures the right product is available at the right price, in the right place, and at the right time.
Understanding Markets
Markets refer to the group of consumers who are interested in a product, have the resources to purchase it, and are legally permitted to do so.
A target market is the specific segment of the market that a business
Read MoreKeynesian Multiplier & Fiscal Policy Impact
The Keynesian Multiplier and Its Impact
The Keynesian Multiplier concept suggests that changes in public expenditure can offset changes in private demand. An increase in public spending boosts domestic production and agents’ disposable income. This increased income, in turn, fuels consumer demand and investment, leading to further production increases, generating more income, and so on.
Haavelmo Theorem and the Ripple Effect
Conclusion 1 (Haavelmo Theorem): An increase in government spending results
Read MoreFinancial Management: Key Concepts and Cycle Analysis
Financial Management: Key Concepts
Tasks of Financial Administration
- Planning: Planning for the future of the company.
- Control: Monitoring and managing financial performance.
- Asset Management: Managing new investments, applications, and resources.
- Liability Management: Fundraising and managing debt.
Key Financial Decisions
- Investment Decisions: Evaluating the profitability of agreements.
- Financing Decisions: Balancing resources and contractor obligations.
- Dividend Decisions: Optimizing yields for the company.
Understanding Foreign Exchange Risk Exposure: Types and Examples
Types of Foreign Exchange Risk Exposure
- Types of foreign exchange risk exposure
Transaction Risk
Transaction Risk is the risk of an exchange rate changing between the transaction date and the subsequent settlement date. Thus, it is the gain or loss arising on conversion.
This type of risk is primarily associated with imports and exports. If a company exports goods on credit, then it has a figure for debtors in its accounts. The amount it will finally receive depends on the foreign exchange movement
Read MoreKey Economic Concepts: Labor, Capital, and Productivity
Key Economic Concepts
Added Value
Added value is the difference between the value of goods produced and the cost of raw materials and intermediate goods used to produce them.
The Demand for Labor
The demand for labor is dependent on the demand for goods and services. For example, if the demand for goods increases, it will require more inputs, and therefore, employers will demand more productive labor. Conversely, when the demand for goods decreases, employers will reduce their demand for productive
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