Articles , Page 16
Disadvantages of accounting profit
Profit as a basic profitability indicator used by companies has the following drawbacks: profit does not equal net inflow of money, costs do not equal expenditures and incomes do not equal receipts profit includes the results of operations that are ad-hoc and will not be repeated in the future various methodologies particularly in the ar...
Liquidity indicators
Liquidity is the entity´s ability to convert its assets into cash for the purpose to settle its obligations, ideally with the lowest possible transaction costs. (14) Indicators of liquidity Liquidity indicators show the extent to which the current assets of the company in various forms cover its short-term obligations. Thus, the num...
Standard costing
Standard costing is a cost accounting measurement basis that predicts unit costs and production quantities based on predetermined standards before the production even begins and as such it is an alternative method to historical cost accounting. It is suitable for production, which is standardized and mass or repetitive. Standard costing serves as...
Basics of financial analysis
This series includes an introduction to financial analysis. It describes who usually performs the analysis, its objectives, source data, drawbacks and limits or useful benchmarks. Furthermore, it states what the basic methods are and classifies the indicators into groups. The group of indicators ar
Financial analysis indicators - market value and capital market
This series follows the series about Group of financial analysis indicators and describes in detail the indicators of market value and capital market.
Financial analysis indicators - profitability
This series follows the series about Group of financial analysis indicators and describes in detail the indicators of profitability.
Dividend per share
Financial analysis indicator Dividend per share presents the amount of annual dividends paid per a single share. Calculation formula Interpretation and comparison Important is the comparison of data in time-series. If is the trend increasing, it is expected that this tre
Position audit
Position audit is continual evaluation and analysis of the company´s external and internal situation made for the purpose of strategic planning. It is possible to use various tools and analysis, for example: PESTEL analysis Five forces analysis Analysis of strategic capability SWOT analy
Time series
Time series represent a sequence of data for several time periods (hour, days, weeks, months, year). Independent variable is always time (axis x). Time series is used to predict future and it has several components: trend – represent long-term movement; can be developed by regre
All about variance analysis
This series describes in detail variance analyses - what it is about, when is the varince significant and how to breakdown and analyse the variances on various types of costs.
Financial analysis indicators - activity
This series follows the series about Group of financial analysis indicators and describes in detail the indicators of activity.
Various forms of profit
Although the profit appears to be unique and comparable term, it is entirely NOT the case. This series of articles discusses possible profit forms - from the perspective of financial accounting, management accounting, tax world or forms profits, which are commonly used in the corporate world (EBIT,
Interest burden
Interest burden is one of the indicators of indebtedness and financial structure and it shows what proportion of earnings before interest and taxes (EBIT) are used to cover interest expense. It is inversed indicator to interest coverage, which is much more widely used in practice. Calcula
Time series
Time series represent a sequence of data for several time periods (hour, days, weeks, months, year). Independent variable is always time (axis x). Time series is used to predict future and it has several components: trend – represent long-term movement; can be developed by regre
Budget manual
Budget manual is a document that contains instructions for budget preparation. It is often used in large companies and facilitates the budget coordination process. It is usually prepared by budget coordinators (e.g. financial analysts or controllers) and approved by budget committee. It defines mai