What Is the Debt To Capital Ratio? A company’s financial leverage is measured by the debt-to-capital ratio. The debt-to-capital ratio is derived by dividing the total capital by the company’s interest-bearing debt, both short- and long-term obligations. Debt includes all interest-bearing debt. Shareholders’ equity may comprise common stock, preferred stock, […]
Accounting
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What Is Return on Sales (ROS)? Return on sales is a financial analysis ratio that calculates how efficiently a company is generating profits from its top-line sales revenue. It provides insight into a company’s performance by analyzing the percentage of total revenue that is converted into operating profits. As a […]
What Is a Corporate Umbrella? A corporate umbrella is a strategy by large, successful brands to arrange smaller brand names under a single, unified corporate structure. The parent company is generally a large, successful brand name that oversees smaller companies belonging to the same corporation. The parent company adds structure […]
What Is a Trimmed Mean? A trimmed mean is a form of averaging in which a specified fraction of the greatest and smallest values are removed before computing the mean. The trimmed mean is calculated after deleting the given outlier data using a conventional arithmetic averaging algorithm. The use of […]
What is Asset Finance? Asset finance lets a company use its existing assets like inventory or accounts receivable as collateral to secure short-term loan financing. The use of a company’s balance sheet assets, such as short-term investments, inventories, and accounts receivable, to borrow money or obtain a loan is referred […]
What Is Incremental Analysis? Incremental analysis is a business decision-making tool that examines alternative choices based on marginal cost differences between them. Incremental analysis is used in business to determine the true cost difference between alternatives. This technique is also known as the relevant cost method, marginal analysis, or differential […]