The rule of 72 is an estimate of how quickly an investment doubles. The formula is 72 divided by the interest rate. As returns increase, the years needed to double decrease.
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This guide is for learning financial ratios. This also is helpful for entrepreneurs that want to have a better grasp of financial accounting concepts. Financial Ratios Liquidity Ratios Activity Ratios Leverage Ratios Profitability Ratios Market Value Ratios
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The current ratio shows a company’s ability to pay its short-term debts. It is the most popular liquidity ratio. The formula is current assets divided by current liabilities. What is the Current Ratio? The current ratio measures the firm’s ability to pay its short-term debts. Current assets and current liabilities have a maturity of less than one year. So, the current
A balance sheet is a financial statement that shows the financial position of a company. It shows company assets, liabilities, and equity. The balance sheet is a snapshot of what the company owns and owes on a specific date. The balance sheet is one of the core financial statements. The other financial statements are the
Expense is a cost to operate a business to produce revenue. In accounting, an expense occurs when an asset is used. This could include a cash outflow or consuming an asset. What is an expense? Expenses are one of the five types of accounts in the accounting system. All expenses appear on the income statement.
The accounting information system records transactions and summarizes the results. The goal of accounting is to issue financial statements. The accounting system records transactions and prepares financial statements. Chapter 3: Accounting Information System This is Intermediate Accounting Chapter 3. For more Intermediate Accounting topics, see Intermediate Accounting Study Guide. Debits and Credits Double-entry accounting is the
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