Tag Archives | Firm

Cost-Volume-Profit (CVP) Analysis | Cost Accounting

In this article we will discuss about:- 1. Meaning of CVP Analysis 2. Procedure of CVP Analysis 3. Practical Applications of CVP Analysis 4. Assumptions of CVP Analysis 5. Profit-Volume Chart 6. CVP Analysis with Change in Selling Price 7. CVP Analysis in Multi-Product Situations. Meaning of CVP Analysis: Cost-Volume-Profit (CVP) analysis studies the relationship […]

Top 6 Categories of Ratio Analysis | Firm

The following points highlight the top six categories of ratio analysis. The categories are: 1. Liquidity Ratios 2. Leverage Ratios 3. Asset Management Ratios 4. Profitability Ratios 5. Operating Ratios 6. Market Based Ratios. Category # 1. Liquidity Ratios: The liquidity ratios measure the liquidity of the firm and its ability to meet its maturing […]

Capital Structure and Value of Firm | Financial Management

In this article we will discuss about the capital structure and value of firm.   Meaning and Definition of Capital Structure and Value of Firm: A firm mobilizes funds which, depending upon their maturity period, can be classified as long-term and short-term sources. The former consists of capital, reserves and term loans raised from public and […]

Top 3 Methods of Working Capital Estimation | Firm

The following points highlight the top three methods of working capital estimation. The methods are: 1. Percentage of Sales Method 2. Regression Analysis Method 3. Operating Cycle Method. 1. Percentage of Sales Method: It is a traditional and simple method of determining the level of working capital and its components. In this method, working capital […]

Motives for Holding Cash Balances in a Firm: 5 Motives

The following points highlight the five main motives for holding cash balances in a firm. The motives are: 1. Transaction Motive 2. Precautionary Motive 3. Speculative Motive 4. Future Requirements 5. Compensating Balances. 1. Transaction Motive: Cash balance is required to meet the day to day transactions of business. Firms hold cash for making necessary […]

Risks Involved in Capital Structure Decisions

This article throws light upon the two main types of risks involved in capital structure decision of a firm. The types are: 1. Financial Risk 2. Non-Employment of Debt Capital (NEDC) Risk Capital Structure Decision: Type # 1. Financial Risk: The financial risk arises on account of the use of debt or fixed interest bearing […]

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