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Working capital (WC) is a financial metric which represents operating liquidity available to a business, organisation, or other entity, including governmental entities. . Along with fixed assets such as plant and equipment, working capital is considered a part of operating ca
X 1 = ratio of working capital to total assets. Measures liquid assets in relation to the size of the company. X 2 = ratio of retained earnings to total assets. Measures profitability that reflects the company's age and earning power. X 3 = ratio of earnings before interest and taxes to total assets. Measures operating efficiency apart from tax ...
Easy: Working capital is derived from the balance sheet and equals the sum of current assets such as cash and inventory after subtracting current liabilities such as accounts payable and short ...
Asset turnover can be furthered subdivided into fixed asset turnover, which measures a company's use of its fixed assets to generate revenue, [3] and working capital turnover, which measures a company's use of its working capital (current assets minus liabilities) to generate revenue. [4]
Assets represent value of ownership that can be converted into cash (although cash itself is also considered an asset). [1] The balance sheet of a firm records the monetary [2] value of the assets owned by that firm. It covers money and other valuables belonging to an individual or to a business. [1] Total assets can also be called the balance ...
Capital Employed has many definitions. In general it is the capital investment necessary for a business to function. It is commonly represented as total assets less current liabilities (or fixed assets plus working capital requirement). [2] ROCE uses the reported (period end) capital numbers; if one instead uses the average of the opening and ...
The total-debt-to-total-assets ratio is one of many financial metrics used to measure a company’s performance. In this case, the ratio shows how much of a company’s operations are funded by debt.
Capital management refers to the area of financial management that deals with capital assets, which are assets that have value as a function of economic production, or otherwise are of utility to other economic assets. Capital management can broadly be divided into two classes: Working capital management regards the management of assets that ...