What's it: Cash flow from operating activities is the incoming and outgoing money related to daily operation. Its examples include sales revenue, production expenses, employee salaries, marketing expenses, and general and administrative
Investing Fundamentals
Accounting Cycle: Meaning, and Stages
What's it: Accounting cycle refers to the set of processes for identifying, analyzing, and recording accounting events. The cycle starts with identifying transactions and ends with entering these transactions in the financial statements. During
Altman Z-Score: Concept, Model, Formula, Criticism
What's it: Altman Z-score is a multivariable formula for measuring a company's potential bankruptcy. It is a function of the five financial ratios: profitability, leverage, liquidity, solvency, and activity ratios.The calculations are also
Annuity: Meaning, Types, How to Calculate It
What's it: Annuity is a way of payment or receipt periodically over a certain period. Various financial products use this concept, for example, insurance policies, pension fund benefits, and bank loan interest.For example, in insurance, you pay
Barter Transaction: Meaning, Examples, Accounting, Pros, Cons
What's it: A barter transaction refers to exchanging goods for goods without involving money as an intermediary. However, sometimes, transactions can also involve services, be it services with goods or services with services. One form of a
DuPont Analysis: Formula, Decomposition, Interpretation, Pros, Cons
What's it: DuPont analysis is an approach to breaking down the ratio of return on equity (ROE) into several specific ratios. It helps us know why a company's ROE is superior (inferior) to competitors. If we compare the components from year to
Foreign Exchange Risk: Types, How To Measure and Manage
What's it: Foreign exchange risk is the adverse exposure to fluctuations in foreign exchange rates. Under a floating regime, the exchange rate moves according to the foreign exchange market's supply and demand fundamentals.Small fluctuations
Fixed Assets Turnover Ratio: How to Calculate and Interpret
What's it: The fixed-asset-turnover ratio is a financial ratio to measure how productively and efficiently a company uses its fixed assets to generate revenue. Fixed assets include production machinery, equipment, motor vehicles,
Economic Exposure: Meaning, How it Works and Mitigation
What's it: Economic exposure is the variation in a company's economic or market value due to changes in exchange rates. Currency fluctuations have an impact on the company's financial stability. When a company invests or operates in more than one
Asset Valuation: Meaning, Types and Benefits
What's it: Asset valuation is the process of determining the present value of a company's assets, such as stocks, fixed assets, and intangible assets. It is useful for several decisions, such as buying and selling company shares, acquisitions, and
Auditor: Meaning, Types, and Tasks
Who's it: An auditor is a party that carries out an official examination of the systems, accounts, legal records, and documents of a company. Their work and examinations cover various areas, such as finance, marketing, information technology, and
Cash Flow From Investing Activities: Meaning, Components, and Importance
What's it: Cash flow from investing activities is the money in and out associated with the company's long-term investment. It is one of three parts of the cash flow statement. Others are cash flows from operating activities and cash flows from