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Degree of Financial Leverage (DFL): Definition, Formula, Example and Analysis

In this article, we cover the degree of financial leverage. This includes the key definition, how to calculate the degree of financial leverage as well as example and analysis. Before, jumping into detail, let’s understand some key relevant definitions. Definition Let’s understand some key definition of financial leverage as well as the degree of financial […]

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Degree of Operating Leverage (DOL): Definition, Formula, Example and Analysis

In this article, we will cover the degree of operating leverage. This includes the key definition, how to calculate the degree of operating leverage as well as example and analysis. Before, jumping into detail, let’s understand some key relevant definitions. Definition Let’s understand some key definition of operating leverage as well as the degree of

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Holding Period Return Formula and its Calculation

In this article, we cover the holding period return formula (HPR formula) and how to calculate the holding period return for a portfolio of investments. This includes the example and calculation of this return, its interpretation, and analysis as well as advantages and disadvantages of it. Let’s go through together! What is Holding Period Return

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What is Performance Materiality? All You need to Know!

Introduction An audit is the process of examining the financial statements of a business by an independent person, called an auditor. The auditor gathers audit evidence regarding the truthfulness and fairness of the financial statements and gives an opinion regarding whether the financial statements are free from material misstatement, either due to fraud or error.

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How to Prepare a Statement of Retained Earnings?

Introduction Financial statements are documents produced by a business that show its different aspects. Businesses prepare financial statements after every accounting period for several reasons. For example, financial statements help the stakeholders of business make decisions regarding their relationship with it. Similarly, even the business itself can benefit from producing financial statements as it allows

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Difference between Cost Control and Cost Reduction: All You Need to Know!

In this article, we cover the difference between cost control and cost reduction. This starts from the overview of costs structure of a business and continue to the key definitions of both cost control and cost reduction. Then, we will jump to the key differences between cost control and cost reduction. Now let’s go through

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What is the Purpose of Operating Statement?

In this article, we cover the purpose of operating statement. This includes the overview of operating statement as well as each type of operating statement. Then, we will go further to the purpose of each operating statement. So let’s go through together! Overview There are five financial statements that businesses prepare to document and demonstrate

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Dividend Coverage Ratio: All You Need to Know About!

As the name indicates this ratio is about the dividend cover. Dividend coverage ratio is one of the few important investor ratio indicators. It provides information on a company’s ability to pay dividends to its shareholders. It also indicates the profits generated by a company and the portion of income distributed among the shareholders. What

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How to Calculate Dividend Payout Ratio ?

In this article, we cover how to calculate the dividend payout ratio. The Dividend payout ratio is one of the most important investor ratios. It provides an indicator of potential income for the investor with a stock. Investors looking for a regular income are particularly interested in the dividend payout ratio. What is Dividend Payout

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How to Calculate Debt Ratio?

The Debt ratio is an important indicator for lenders and stockholders. It indicates the level of a company’s debt against its assets. It’s usual for businesses to offer loans and debts on asset based collateral. However, both lenders and stockholders would be interested to know the company’s level of financing against their assets. So how

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