Current Ratio vs. Quick Ratio

Current Ratio vs. Quick Ratio Liquidity ratios are an important tool used to measure how efficiently a company can pay off its debt.  The most common liquidity ratios used are the current and the quick ratio. These ratios help investors…

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The Balance Sheet

The Balance Sheet The balance sheet is important because it’s essentially a company’s statement of financial position at a specific date. Investors, creditors, and other businesses use it to: calculate financial ratios, determine how much money the company has and…

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Liquidity Ratios #3 (3-part series)

Management uses financial data to determine the success for the company. In the first two parts of the series, I discussed profitability and efficiency ratios. In this blog, I will be discussing liquidity ratios that management uses to meet their…

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Efficiency Ratios #2 (3-part series)

In this blog, I will be discussing efficiency ratios. Efficiency ratios are used internally to check if the company is utilizing their assets and liabilities efficiently in earning revenues. Efficiency ratios are mainly used to assess how well assets and…

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Financial Ratios #1 (3-part series)

Financial data by itself may not give the complete picture about a company’s performance and financial wellbeing. It is difficult to evaluate standalone numbers without comparing them to certain norms and standards. Ratios provide a set of standardized parameters which…

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Assets

There are many different types of reports a person can look at to analyze their business. The most important of all financials is the balance sheet.  The balance sheet provides insight of the business’ actual net worth at a specific point in time.  One…

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Balance Sheet

The balance sheet is the core of all the financial statements. Therefore, the basic fundamental in accounting and one of the very first equations taught to an accounting student, is derived from the balance sheet. This would be: Assets =…

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