Limitations of Cash Flow Statements- Cash flow statement is used as a tool of financial statement analysis. Even though, cash flow statement suffers from some limitations. Such limitations
Data necessary to take capital expenditure decisions The following data are to be collected in order to take the decision of capital expenditure. 1. Initial Investment: It is
Process of Capital Budgeting Capital budgeting is a complex process as it involves decisions relating to the investment of current funds for the benefits to be available in
Kinds of Capital Expenditure Proposals The following.are the kinds of capital expenditure proposals. 1. Independent Proposal: Independent proposal means that there is no alternative proposal to choose the
General Profitability Ratios Some profitability ratios are calculated in relation to sales, they are termed as General Profitability Ratios. Such ratios are presented below: Gross Profit Ratio. Operating
What is current ratio? It is otherwise called as working capital ratio. Current ratio may be defined as the relationship between current assets and current liabilities. Current ratio
Steps involved in Target Costing process The following are the main steps or stages involved in the target costing process. 1. Conducting Market Research: The company should determine
What is Target Costing? Target costing is getting importance during the period of difficult market conditions. There is a ever changing of market conditions for any product. Therefore,
What is Standard cost for direct labor? The time required for producing a product should be ascertained and labor should be properly graded. The reason is that all
What is Standard cost for direct material? Direct material means a material used for manufacturing and forming a major portion of a product. A cost is predetermined for