The net profit margin is one of the income statement ratios that measures the percentage of profit a company generates after accounting for all expenses. A company’s net profit margin can be calculated by dividing its net income by its total revenue. The...
Of course, companies don’t need to pay their debts multiple times over, but the ratio indicates how financially healthy they are and whether they can still invest in their operations after paying off their debt. The higher the ratio, the less risk involved...
When you first purchased the desk, you created the following depreciation schedule, storing everything you need to know about the purchase. Like most small businesses, your company uses the straight line method to depreciate its assets. The following illustration walks through the specifics...
While income statements and cash flow statements show your business’s activity over a period of time, a balance sheet gives a snapshot of your financials at a particular moment. Your balance sheet shows what your business owns (assets), what it owes (liabilities), and...