## Why and How to calculate current ratio

Investors judge a company by using various methods to know whether a company has adequate working capital or not. In this regard, current ratio is more useful than

## Income statement or Profit & loss account in financial statements

To present financial position for a period to public, companies prepare financial statements. It has four main parts, the balance sheet, income statement, cash flow and retained earnings

## What is Operating cycle of a business

In a business, operating cycle is the length of time a company takes starting from the time when cash is invested in goods and services to the time

## How cost of goods sold or COGS is calculated

Cost of goods sold is shown in the income statement of a company which is into manufacturing, wholesaling, retailing and into similar kind of business. Cost of goods

## What is Shareholders’ equity on the balance sheet

A company’s balance sheet has three major sections, assets, liabilities and stockholders’ equity or owner’s capital. Liability represents the total debt of the company and owner’s capital represents

## What is price to book ratio and how to calculate it

P/B or Price To Book Ratio is calculated to compare market price of a stock with its book value. Its calculated by dividing current market price of the

## Accounts payable on the balance sheet

Accounts payable is the amount that the company owes to its creditors or outsiders from whom it has brought goods or services. Total amount of accounts payable as

## Beginner’s Guide to Reading and Understanding Assets on the Balance Sheet

On the balance sheet you have three major components, assets, liabilities and owner’s equity. In this article, we will understand the term asset and its components. An asset

## How to calculate Working capital

Working capital is the difference between company’s total current asset and the total current liabilities. In simplified terms, It’s the amount of current asset that is left out

## Fixed assets on the company’s balance sheet

Asset held with the intention of being used for the purpose of producing goods or providing services and is not held for sale in the normal course of