Market Value of Equity
What is Market Value of Equity? A company’s Market Value of Equity is the current market price of company’s share multiplied by the number of all outstanding shares in …
Return on Invested Capital (ROIC)
Definition Return on Invested Capital or ROIC attempts to measure the returns earned on capital invested by a company. It is a profitability ratio and it measures the return …
Days Sales Outstanding
What is Days Sales Outstanding (DSO)? Days sales outstanding is a financial ratio that helps in calculation of the number of days the accounts receivables remain outstanding. It is …
Negative P/E Ratio
Price-Earnings Ratio (P/E Ratio) Before taking the discussion to Negative P/E Ratio, let’s understand the concept of Price-Earnings Ratio or P/E ratio. It expresses the relationship between the price …
Advantages and Disadvantages of Drawing Power
What is Drawing Power? Drawing power is a concept that is used in conjunction with cash credit and overdraft. Banks allow a sanction limit while extending cash credit and …
Advantages and Disadvantages of Packing Credit
Decoding Packing Credit Packing credit is a financial arrangement between an exporter and financial institution. It may be pre-shipment credit or post-shipment credit or both. Pre-shipment credit, as the …
Advantages and Disadvantages of Bank Guarantee
Understanding Bank Guarantee Bank guarantee is a written instrument issued by lending institutions to the beneficiary (to whom the guarantee is provided, generally seller) on behalf of the applicant …
Advantages and Disadvantages of Factoring
What is Factoring? Factoring is a financial arrangement which involves sale of accounts receivable of a business to another party (called ‘factor’) at a discount. It facilitates the seller …
Financial Statement Notes
Financial Statement Notes / Footnotes Financial statement notes are the additional important information apart from the basic 3 financial statements. These notes to financial statements give due clarity to …
Advantages and Disadvantages of Cash Credit
Cash credit is a short-term lending facility offered by banks against collateral security which allows borrowers to withdraw funds in excess of their credit balance. What is Cash Credit? …