What Is a Financial Ratio? The Complete Beginner’s Guide to Financial Ratios – Part One


 

 A financial ratio is a metric usually given by two values taken from a company’s financial statements that compared give five main types of insights for an organization. Things such as liquidity, profitability, solvency, efficiency, and valuation are assessed via financial ratios. Those are metrics that can help internal and external management to make informed … Continue reading What Is a Financial Ratio? The Complete Beginner’s Guide to Financial Ratios – Part One

What Is a Financial Option? The Complete Beginner’s Guide to Financial Options


 

 A financial option is a financial contract, also defined as a derivative which draws its value on a set of underlying variables, such as the volatility of the stock on which the option has been written. It comprises two parties, the option writer, and the option buyer. This contract offers the right of the option … Continue reading What Is a Financial Option? The Complete Beginner’s Guide to Financial Options

What Is a DuPont Analysis? How to Perform a DuPont Analysis from Scratch


 

 The DuPont analysis is a financial performance framework which aim is to break down the different financial metrics that affect the return on equity (ROE) to understand what is driving it. Thus, the DuPont Analysis allows having a better understanding of the primary drivers of the return on equity.  What is the return on equity? One … Continue reading What Is a DuPont Analysis? How to Perform a DuPont Analysis from Scratch

What Is the Inventory Turnover Ratio? How Inventory Efficiency Can Fuel Business Growth


 

 The inventory turnover ratio is a financial metric that tells you how many times throughout a period the company converted its inventories in cash for the business. In fact, that can be calculated either by dividing the sales by the average stock or by dividing the cost of goods sold by the average inventory. How to … Continue reading What Is the Inventory Turnover Ratio? How Inventory Efficiency Can Fuel Business Growth

What Is the Receivables Turnover Ratio? How Amazon Receivables Management Helps Its Explosive Growth


 

 The receivable turnover ratio is a financial management metric that measures how efficiently an organization is leveraging its assets. A company that allows its customers to pay at a later date is accruing accounts receivable on its balance sheet. The receivables turnover ration assesses how many times throughout the year the company is collecting the money … Continue reading What Is the Receivables Turnover Ratio? How Amazon Receivables Management Helps Its Explosive Growth