Accounting Category: Financial ratios

Accounting Articles

November 1, 2015

This article provides some examples of how trend analysis can be used in accounting and auditing.

October 24, 2015

Trend analysis may be a helpful tool to analyze various financial data. In this article, we will review trend analysis and how it can be used in accounting and management.

April 21, 2014

Earnings per share (EPS) is a closely-watched business metric that tells analysts and investors how much a corporation is making on a per-share basis. In this article, we’ll describe basic EPS in detail, and then briefly describe the diluted EPS calculation.

April 6, 2014

In part 1 of this series, we learned how to calculate the cost of different forms of financing -- debt, preferred equity, and common equity. In this article, we’ll cover some ways that information can be used to make sound business decisions.

March 29, 2014

In this two-part article series, we will discuss how to calculate a firm’s cost of capital. This is an important measurement with several business applications. We’ll go over the basic concepts below - the second part will focus on the practical applications.

January 3, 2014

Financial management is a risky business - predictions of future performance are prone to the effects of an ever-changing economic environment. Discounting predicted cash flows is one method a financial manager can use to account for the risks associated with forecasting performance.

September 18, 2012

Have you ever wondered if increasing revenues provides more value to shareholders of a company than decreasing costs (i.e., margin improvements)? In this article we look at a ratio called Relative Value of Growth that can help answer this question.

August 29, 2012

Do you normally just look at the net income of a company? Do you analyze the company's cash flows from operations? See how the two are connected in this article discussing the quality of income.

June 25, 2012

Learn about operating leverage and how one can compare operating leverage across companies.

June 4, 2012

Learn about debt covenants and their classification (positive and negative, capital and performance). Understand actions when debt covenants are violated, including financial reporting implications. Review an example of debt covenants involving interest coverage ratio and fixed charge coverage ratio.

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Accounting Categories
Accounting categories represent a collection of accounting guides and answers related to one accounting area.