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
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
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
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
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
If you work for a real estate agency, you may have heard about net operating income. This is a profitability formula that is used to determine the financial health and profit of a commercial property by deducting the operating expenses from the net income. In short, you can measure the profit of a property after… Read more
How well you administer your money is mainly up to you. However, the net interest margin ratio is a term that shows you how well you invest your money and if the decision is good. It mainly determines the profit of a company when it comes to its investments. Still, this ratio is also used… Read more
Net income also known as bottom line or net profit- is the amount of money that remains after you pay all debt and expenses within a company. This is the money you have available to invest in other projects or assets. Anyone that has a job and receives a paycheck can see on their payslip… Read more
Ever wondered how much 100 gums cost 20 years ago compared to today? Such calculations are simple, but for a company that could lose everything, these are crucial. Every company has its own assets. From computers to offices, lands, and buildings, you name them. They all came as a price sometimes, but now, they may… Read more
To better understand what the return on capital employed means, first we need to understand what the capital employed is. By employing capital, you will certainly make a profit, right? So, this is the amount of capital used for making profits. Back to the return on capital employed, this term or ratio means the amount… Read more
When it comes to being in debt, no one likes that, especially companies, where “profit” is the most used word. They may put you in a tough situation but mastering your financial skills can mean the difference between being bankrupt and being successful. The long-term debt to total assets ratio of a business reveals the… Read more
Everybody must know and check their financial situation on a regular basis. Some people check their wallets or credit cards daily. But when you rule over a company, it’s not that simple. For this, you need the net debt calculation that will show you the financial situation and health of your business. Imagine that you… Read more