Finance

Nonprofits, or nonprofit organizations, are entities that serve a specific purpose. Usually, this purpose includes a collective, public or social benefit. Nonprofits do not operate to generate profits from their activities. Any income from those operations is secondary to the nature of these entities. Usually, these entities conform to several rules resulting from the purpose …

What is Program Expense Ratio? Definition, Example Calculation? Read More »

Definition of Retained Earnings to Assets Ratio Retained Earnings to Total Assets is a ratio that measures accumulated earnings over the total assets possessed by the company. It mainly represents the total assets that are funded by the retained earnings of the organization. The retained earnings to assets ratio indicate the management’s approach towards using …

What Is A Good Retained Earnings To Assets Ratio? Read More »

A company’s working capital plays a crucial role in its cash management. This term represents the residual current assets after deducting its current liabilities. Usually, companies use working capital to cover their short-term obligations. On top of that, it plays a critical role in how companies operate and fund their daily activities. For stakeholders, it …

Advantages and Disadvantages of Current Ratio You Should Know Read More »

Releasing working capital means freeing up the cash from working capital to achieve an optimal cash operating cycle that leads to higher business profitability. The optimal cash operating cycle is achieved when debtor days and inventory days are shortened by introducing effective business strategies to align receivables and creditors in such a way that cash …

What Does Release of Working Capital Mean? (Explanation) Read More »

Background The business needs to analyze operational and strategic aspects to make financial decisions, and the cost of capital is one of the essential inputs in the process of decision-making. It helps to understand if business operations are value-adding, destructive, or need attention to improve profitability. So, it’s all about measuring, controlling, and taking steps …

What is the Real Cost of Capital? (Explained) Read More »