Solvency ratios are financial metrics that measure a company’s ability to meet its long-term debt obligations. They provide insights into a company’s financial strength and ability to repay debts over an extended period. Typically, solvency ratios assess the relationship between a company’s total debt and its equity or assets and …

A budget is a financial plan that outlines the expected income and expenses for a specific period, typically a year. It is a crucial tool that helps individuals and organizations manage their finances effectively and achieve their monetary goals. Similarly, budgets can help these parties monitor their spending, identify areas …

A withdrawal slip is a written order to the bank that instructs it to withdraw funds from a certain account. It is an important document that allows consumers to retrieve money from the bank, and it can be used for both business and personal purposes. Withdrawal slips vary between banks, …

Inventory is a crucial aspect of the operations and activities conducted by many companies. Usually, it includes the acquisition cost and any additional expenses in bringing the goods to their current condition. Accounting standards require companies to record inventory at that cost. Sometimes, though, it may not reflect the value …

Retailers and wholesalers may purchase inventory from various suppliers to sell further. These businesses exist to invest money in goods from other companies and market them as a part of their operations. However, these goods do not constitute their finished goods. Instead, they classify as merchandise inventory. What is Merchandise …

In a rapidly changing and increasingly competitive business environment, companies are always seeking ways to stay ahead of the curve. One strategy that companies often rely on to maintain their competitive advantage is product diversification. If done correctly, product diversification can help a company grow its customer base, increase revenues, …

Bank for International Settlements (BIS) is a very important organization that facilitates international banking, finance, and monetary cooperation. It is one of the oldest financial institutions in the world responsible for promoting global economic and financial stability. It also serves as a forum for central banks to coordinate their policies …

Companies prepare financial statements and other reports to present to their stakeholders. These reports provide details of the company’s financial position and performance for or over a period. Usually, companies prepare these reports for a whole fiscal year. However, they may also do it for shorter periods. This process falls …

Working capital ratios allow companies and stakeholders to gauge how liquid a company is. Usually, it uses figures from the income statement and balance sheet to show how long it takes to convert a company’s resources to cash. One of the working capital ratios is the days cash on hand. …

When it comes to investments, whether it is a stock, bond, or any other security, there is some degree of risk. Every investment portfolio has its own degree of risk, and this is known as portfolio risk exposure. The higher the risk amount, the greater the potential losses that could …