Average Collection Period Formula The formula to find out average collection period is Average Collection Period = Total Accounts Receivable / Credit Sales Per day. Here, the Total
What is flow of funds? Flow means movement. The term movement includes inflow and outflow. Here, flow of funds means transfer of economic values from one asset of
Capital Structure or Leverage Ratio Capital structure refers to the degree of long term financing of a business concern as in the form of debentures, preference share capital
Types of financial statement analysis Financial statements analysis are classified according to their objectives, Materials used and Modus operandi. Financial statement analysis, according to objectives are further subdivided
Procedure of Financial Statement Analysis A common procedure is followed for financial statement analysis. Such procedure is briefly explained below. 1. Objective of Analysis: The objective of analysis
The mere preparation of Profit and Loss Account and Balance Sheet does not give more information for managerial decision making. Hence, there is a need for analyzing the
Limitations of financial statements Most of the limitations are due to recorded facts, accounting rules and conventions and personal judgements. If proper care is taken and specifically prepare
Functions and Importance of financial statements. The following are some of the functions and importance of financial statements. 1. Importance of Financial Statements to Management: Management needs the
Essentials of Good Financial Statements A proper analysis and interpretation of financial statements enables the interested parties to judge the profitability and financial strength of the business. Hence,
Parties interested in Financial Statements There are many people using the financial statements. They are assessing the financial statements in terms of profitability, liquidity and solvency. Some of