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ABSOLUTE LIQUID RATIO FORMULA Absolute Liquid Ratio is a type of liquidity ratio that is calculated to analyze the short term solvency or financial position of the firm. It is calculated to exclude the receivables from the current and liquid assets and to know about the absolute liquid assets. Although receivables, debtors and bills receivables…
ABSOLUTE LIQUID RATIO Absolute Liquid Ratio is a type of liquidity ratio that is calculated to analyze the short term solvency or financial position of the firm. It is calculated to exclude the receivables from the current and liquid assets and to know about the absolute liquid assets. Although receivables, debtors and bills receivables are…
LIQUID RATIO FORMULA Liquid Ratio, a type of liquidity ratio, may be defined as the relationship between quick or liquid assets and current liabilities. An asset is said to be liquid if can be converted into cash within a short period without loss of value. The liquid ratio is also known as Quick ratio or…
MEANING Liquid Ratio, a type of liquidity ratio, may be defined as the relationship between quick or liquid assets and current liabilities. An asset is said to be liquid if can be converted into cash within a short period without loss of value. This ratio is also known as Quick ratio or Acid test ratio….
LIQUID RATIO INTERPRETATION Liquid Ratio, a type of liquidity ratio, may be defined as the relationship between quick or liquid assets and current liabilities. An asset is said to be liquid if can be converted into cash within a short period without loss of value. The liquid ratio is also known as Quick ratio or…
CURRENT RATIO FORMULA Current ratio explains the relationship between current assets and current liabilities. This ratio is also known as working capital ratio. This ratio is a measure of general liquidity and is most likely to make the analysis of the short term financial position or liquidity position of the firm. It is calculated by…
RATIOS Ratio is an arithmetical expression of relationship between two interdependent or related items. It may be defined as indicated quotient of mathematical expression. Accounting ratios are numerical relationship between two accounting variables. It indicates a quantitative relationship which is used for analysis and decision making. ACCORDING TO ACCOUNTANT’S HANDBOOK BY WIXON, KELL AND BEDFORD…
FINANCIAL RATIO ANALYSIS Financial Ratio Analysis is the process of determining and interpreting relationships between the items of financial statements to provide a meaningful understanding of the performance and financial position of an enterprise. Ratio analysis is basically a technique of: Establishing meaningful relationship between significant variables of financial statements And interpreting the relationship to…
DIFFERENCE BETWEEN COST ACCOUNTING AND FINANCIAL ACCOUNTING The difference between cost accounting and financial accounting is as follows: COST ACCOUNTING Cost Accounting is an art or process of recording, analyzing and classifying of expenditure for the purpose of product costing or service costing, ascertainment of profitability, operational planning and cost control. It is a forward…
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DIFFERENCE BETWEEN TRANSACTION AND EVENT Before understanding the difference between transaction and event, one must clearly understand the two concepts. TRANSACTION Transaction refers to any exchange of goods and services on cash or credit basis by the business with the outside parties i.e. other business or customer. Transaction is an economic activity. It has an…
