Tag: benchmark

Overhead Expense Reduction

See Also: Predetermined Overhead Rate Activity Based Costing vs Traditional Costing Activity Based Cost Allocation Standard Cost Overhead Expense Reduction Explanation As a general precursor to Overhead expense reduction, Group Purchasing Organizations, Co-ops and Consortiums always lead to lower prices because they aggregate spends and create buying power. This may be true for smaller spends

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Quick Ratio Analysis

Quick Ratio Analysis Definition The quick ratio, defined also as the acid test ratio, reveals a company’s ability to meet short-term operating needs by using its liquid assets. It is similar to the current ratio, but is considered a more reliable indicator of a company’s short-term financial strength. The difference between these two is that

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Quick Ratio Analysis Benchmark Example

Quick Ratio Analysis Benchmark Example Explanation Quick ratio calculation is a useful skill for any business that may face cash flow issues. Furthermore, quick assets include those current assets that presumably can be quickly converted to cash at close to their book values. It normally includes cash, marketable securities, and some accounts receivables. Current liabilities

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Retail Markup Example

See Also: Margin vs Markup Retail Markup Example History Max owns a retail store called Retailco. Retailco sells clothing as well as other items common to department stores. Max’s company has just opened their doors and is still finding a place in the market. As a result, some of the essential financial ratios have not

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Price to Sales Ratio Analysis

See Also: Price Earnings Ratio Price to Book Value Ratio Financial Ratios Price to Sales Ratio Analysis Definition Price to sales ratio (PSR ratio) indicates how much investor paid for a share compared to the sales a company generated per share. It measures the value placed on sales by the market. A higher ratio means

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Price to Book Value Analysis

Price to Book Value Analysis Definition Price to book ratio analysis (PBV ratio or P/B ratio) expresses the relationship between the stock price and the book value of each share. In general, the lower the PBV ratio, the better the value is. However, the value of the ratio varies across industries. A better benchmark is

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Management Audit

See Also: Total Quality Management Capital Structure Management Activity Based Management (ABM) Retainage Management and Collection Management Definition Management Audit Definition A management audit can be defined as an audit which analyzes the effectiveness of the management team of a company. The purpose of this is seven-fold: understand current practices, relate these to company financials,

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Long Term Debt to Total Asset Ratio Analysis

See Also: Long Term Debt to Total Asset Example Financial Ratios Debt to Equity Ratio Debt Service Coverage Ratio (DSCR) Operating Cycle Analysis Standard Chart of Accounts Equity Multiplier Long Term Debt to Total Asset Ratio Analysis Definition The Long Term Debt to total asset ratio analysis defined, at the simplest form, an indication of

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London Interbank Offered Rate (Libor) Controversy

London Interbank Offered Rate (Libor) Controversy (June 2008) Presently, there are two issues regarding the London Interbank Offered Rate (LIBOR). First, dollar Libor quotes are considered too high compared to the federal funds rate. Second, elevated Libor quotes are considered too low compared to other market-based interest rates. British Bankers’ Association (BBA) Reaction ( The

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Libor versus Prime Rate

See Also: LIBOR Prime Lending Rate Interest Expense Interest Rate Swaps Federal Funds Rate Libor versus Prime Rate The London Interbank Offered Rate (Libor) and the US Prime Rate are both benchmark interest rates. Both rates are used as reference rates for various lending and borrowing transactions. (For current and historical rates, see the links

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LIBOR (London Interbank Offered Rate)

See Also: Interest Rate Swaps Prime Lending Rate Libor versus Prime Rate Federal Funds Rate LIBOR Definition The LIBOR definition is a benchmark interest rate derived from the rates at which banks are able to borrow funds from one another in the London inter-bank market, is the foundation of all lending rates. Furthermore, this term

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Inventory to Working Capital Analysis

See Also: Financial Ratios Mining the Balance Sheet for Working Capital Are You Collecting the Data You Need to Run Your Business? Net Sales Net Income Letter of Credit Inventory to Working Capital Definition Inventory to working capital ratio is defined as a method to show what portion of a company’s inventories is financed from

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