Payback Period

| Category: Financial.

If you wish to find out what payback period is, you’ve come to the right place. It’s basically a financial capital budgeting method that estimates the number of days needed for an investment to generate cash flow. The cash flow has to be the same as the original investment cost. So, it’s the amount of… Read more

Accounts Payable Turnover Ratio

| Category: Financial.

If you accessed this article, it means that you are probably looking for information about accounts payable turnover ratio. Here is the information that you’re looking for, in that case. The accounts payable turnover ratio is a liquidity ratio that indicates the ability a company has to repay its accounts payable. The repayment is done… Read more

Operating Leverage

| Category: Financial.

If you’ve accessed this page, you are probably eager to find out more about operating leverage. Well, operating leverage is a financial efficiency ratio that is used to calculate the percentage of total costs that are made up of fixed costs and variable costs. Basically, its aim is to find out how well a company… Read more

Operating Income

| Category: Financial.

If you clicked on this article, you’re probably interested in operating income and what it means. Well, it will tell you what you need to know. Operating income is also called EBIT (Earnings before interest and taxes). Basically, it’s a profitability formula that estimates the profits of a firm derived from operations. Therefore, it calculates… Read more

Operating Cash Flow

| Category: Financial.

If you’re a beginner when it comes to finances, you would probably want to know what the operating cash flow means. Basically, it’s an efficiency calculation that shows the amount of cash generated by a company’s regular operating activities during a certain time. Therefore, it shows the cash flow generated from the business operations without… Read more

Net Operating Profit after Tax

| Category: Financial.

If you wanted to know what the Net Operating Profit after Tax is and how it works, you came to the right place. Net Operating Profit after Tax, or NOPAT for short, is a measurement of profitability that estimates the theoretical amount of money a firm could deliver to the shareholders if it had no… Read more

Net Working Capital

| Category: Financial.

Ever heard the term “networking capital”, but you didn’t know what it means? If that’s the case, this article comes to your aid. The net working capital is a calculation that estimates the ability of a company to pay off its current liabilities with existent assets. It’s a very important measurement and it’s used by… Read more

Net Profit Margin

| Category: Financial.

The net profit margin is used to find out whether a business is poorly managed and to see future profitability. By comparing the total sales and the net income, the management can determine how much of the revenue goes towards expenses and how much remains for the company’s future investments. You should know that these… Read more

Net Present Value (NPV)

| Category: Financial.

The net present value is used to calculate the difference between the cash inflows and outflows of a potential investment or project. To make it easier to understand, it evaluates the profit generated by an investment in comparison with the cost set for the time value of money. Why this formula was invented? Because it… Read more

Net Operating Income

| Category: Financial.

If you work for a real estate agency, you may have heard about the net operating income. Basically, this is a profitability formula used to determine the financial health and profit of a commercial property by deducting the operating expenses from the income. In short, you can measure the profit of a property after all… Read more