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Return on Net Assets Ratio: Definition, Formula, and How to Calculate

Net assets are an important metric for equity evaluation for shareholders and lenders. Shareholders in particular are keener on evaluating the impact of their investment. Net assets are theoretically equal to the book value of equity of the shareholders. However, equity is always higher than the book value of net assets with goodwill and fair […]

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Activity-Based Depreciation Method: Formula and How to Calculate It

The activity-based depreciation method of assets takes into account the output of assets. It mainly differs from other methods of depreciation on the very nature of the cost spreading method. Other depreciation methods consider time as the main cost spreading factor. The activity-based depreciation method considers the number of units or the output from the

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Present Value of a Mixed Stream Cash Flow

In the previous article, we have covered the future value of a mixed stream cash flow. In this article, we cover the present value of a mixed stream cash flow. The calculation is similar except for the use of the discounting factor in order to discount each cash flow to year zero. In this article,

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Future Value of a Mixed Stream Cash Flow

Future value of a mixed stream cash flow is simple to calculate. It represents the future sum of returns that we will get at the future date. In this article, we cover the definition of the future value of a mixed stream cash flow, how to calculate it with example calculation as well as how

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Present Value of An Annuity Due

In the previous article, we have covered the present value of an ordinary annuity. In this article, we cover the present value of an annuity due in detail. This includes the definition, how to calculate it with the example, the present value of an annuity due table as well as the comparison between the present

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Present Value of an Ordinary Annuity

Present value (PV) of an ordinary annuity is a measure of how much value of money now for periodic equal future cash flows at a given interest rate and timeframe. In this article, we cover the definition of the present value of an ordinary annuity, how to calculate it by using different methods as well

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What is Market Efficiency? Definition and Its 3 Level Forms

Financial and capital market efficiency is the ability of the market to reflect the available information through the company valuation. Listed companies are valued through the share prices, hence the market efficiency means that all share prices reflect the true value of the company. The Market Efficiency Proposes That: In an efficient market, all current

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Delivery Cycle Time: What is it and How to Calculate?

We can define the delivery time as the time spent between an order placement and order delivery. The cycle of time from the moment a confirmed order is placed and the moment by it is delivered to the customer. The delivery cycle time can be for products or services. Understanding the Delivery Cycle Time The

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Secured Sources of Short-Term Financing: All You Need to Know!

By definition, any loan backed by collateral is termed as a secured source of finance both short-term and long-term financing. The collateral can be a tangible or intangible asset for the company. However, most businesses pledge intangible assets such as property, land, or high priced equipment as collateral. A common notion with Short-term financing is

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Unsecured Sources of Short-Term Financing

A company has two primary sources of finance, Debt, and Equity. We typically divide the debt financing into the long-term and short-term financing categories. Companies often use Short-term debts for operating needs such as working capital management and accounts payables. What Is Unsecured Short-Term Financing? We can define any financing options under the unsecured and

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