Finance

ABC Method

ABC Method Concept ABC method or System (Activity Based Costing) is an accountancy technique or method, developed by Robert Kaplan and Cooper at Harvard in the mid 80s being applied in analytic accounting with the aim to guarantee a correct attribution of all costs, including the indirect costs to activities that are in its origin. […]

Accounting Liquidity

Accounting Liquidity Concept The expression Accounting Liquidity designates the quickness or easiness with which the assets detained by an entity can be converted in payment method. For example, the current assets (products stocks, debts own by customers, etc.) are faster converted into payment methods than the fixed or tangible assets (facilities, equipments, etc.). The bigger […]

Acid Test

The expression Acid Test, also known as quick ratio, is an indicator of liquidity of a very short term that seeks to evaluate the company’s capacity to cope with its short term financial compromises using only their net financial resources, this is, without the need of existences sales or debt receipts from clients and other […]

Activity or Operation Ratios

Activity or Operation Ratios Concept Activity or operation ratios form a type of economical-financial indicators that seek to measure the efficiency level in the company’s assets management. Usually activity ratios assume the form of rotation ratios (which represent the number of times that an asset transforms in sales on a certain period of time) or […]

AMPU

The term AMPU (Average Margin Per Unit) is an economical indicator used in economic and financial analyses of companies and seeks to evaluate the company’s capacity to generate profits or margin per unit. Is a highly used indicator in sectors such as telecommunications and other sectors based in subscription, meaning the provided profit by each […]

ARPU

The term ARPU (Average Revenue Per Unit) is an economical indicator used in company’s economical and financial analyses and seeks to evaluate the (…)

Assets Rotation Ratio

Assets Rotation Ratio Concept Assets rotation ratio or indicator is an activity ratio that seeks to measure the efficiency level with which the company is using its assets. The higher the assets rotation ratio value, bigger the efficiency with which the company is creating sales. Assets rotation ratio is calculated by the division of the […]

Average Payments Period

Average Payments Period Concept Average Payments Period is an activity indicator that seeks to measure the efficiency level with which the company is managing its suppliers payments. The bigger the average payments term, bigger its payment terms negotiation capacity but can also mean difficulties in the fulfillment of the agreed terms. Average payments period is […]

Average Receipts Period

Average Receipts Period Concept Average Receipts Period is an activity indicator that seeks to measure the efficiency level with which the company is managing its clients credit. The bigger the average receipts term, lower is the credit policy efficiency. Average receipt period is calculated by the division of the average amount of clients credit by […]

Average Stocks Period

Average Stocks Period Concept Average Stocks Period is an activity indicator that seeks to measure the efficiency level with which the company is managing its stock inventories. The bigger the average stocks period, lower is the stocks management efficiency. Average stocks period is calculated by the division of the average amount of stocks by the […]

 

 

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