Explain an example how to calculate accounting rate of return.

Q: What is Interest Rate Risk and Cash Flow Risk

A: Interest rate risk: The interest rate risk is the risk that occurs due to the change in the interest…

Q: How do you compute the receivables turnover ratio?

A: Receivables turnover (RT) ratio: this is an accounting measure which shows the effectiveness of a…

Q: Differentiate between price risk and reinvestment risk.

A: Price risk is the risk of decline of the price of the investment or an asset after the underlying…

Q: What formula is used to determine net profit

A: Net profit is the actual income earned by an organization after paying all the expenses. It is…

Q: What are the Profit margins?

A: Answer: Profit margin represents a product, company or sector profitability. It nothing but the…

Q: Consider the advantages and disadvantages of using the accounting rate of return as an investing…

A: This question explains about  the advantages and disadvantages of using the accounting rate of…

Q: Increasing interest expense will have what effect on EBIT?

A: EBIT stands for Earnings before Interest and Tax, the amount earned by the company from the…

Q: Which balance sheet might be most useful to an investor? a. U.S. GAAP balance sheet b. IFRS GAAP…

A: IFRS is principal based.

Q: List and compare all advantages and disadvantages of Payback Period Rule, Average Accounting Return,…

A: Payback rule: The Payback period is the length of time required to recover the initial cost of a…

Q: What is the Relationship between the Incremental Cost and the Loan-to-Value Ratio?

A: The question is based on the concept loan to value ratio and its relationship with incremental cost.

Q: can you now calculate the gross profit ?

A: Gross profit can be defined as the net sales revenue earned by business over a particular period of…

Q: Compute accounting rate of return and explain its use.

A: Accounting rate of return in simple terms is an average rate of return of return from an investment.…

Q: Define increase or decrease of credits.

A: Definition:   Account: Account is the basic record that reports all changes in the value of…

Q: what is Thread Financial Analysis?

A: Financial reporting is a detailed record of all corporate activities, including costs and profits,…

Q: Explain what is financial ratio analysis?

A: Traders and investors use ratio analysis to assess a company's financial health by evaluating…

Q: Explain Computing Holding Period Returns?

A: Introduction: Holding period returns (HPRs): Holding period return (HPR) is one of the investment…

Q: Explain the importance of perspective analysis to financial statement analysis?

A: The process of evaluating a company's performance or value using its balance sheet, income…

Q: Explain the term utilities expense and give an example.

A: Utilities Expenses are expenses incurred on public service utilities like electricity, sewage,…

Q: Please explain the difference between the terms interest rate and required return by defining each.

A: The amount which is charged by the lender to the borrower in order the use assets is known as the…

Q: Explain what is meant by Accounting Rate of Return (ARR) and Net Present Value (NPV) in the context…

A: Solution:- Accounting Rate of Return (ARR):- It measures the expected profitability from any capital…

Q: What is the relationship between profitability and efficiency, liquidity, investment, and efficiency…

A: (1) Financial Ratios will express financial Quantity concerning another financial ratio. (2) These…

Q: Discuss theissues involved in managing returns.

A: In business scenario, returns and allowances are frequent and common place events. An entity…

Q: Explain the importance of financial ratio.

A: Financial ratio is referred to as the relative magnitude of the 2 chosen numerical values, which…

Q: Define Credit analysis

A: Credit analysis is the method by which the creditworthiness of a business or organization is…

Q: What is financial analysis?

A: The question is based on the concept of financial decision making. Financial analysis are the set of…

Q: Discuss how the Accounting Rate of Return as an investment appraisal method is better than the Net…

A: Accounting ROR or ARR and Net Present Value(NPV) are tools that are used to make selection among…

Q: Which of the following methods consider the time value of money? A. payback and accounting rate of…

A: Time Value of Money The time value of money is the concept that money you have now is worth more…

Flow of Funds

The flow of funds is the financial accounts of the nation, which monitor and control the cash flow among various sectors or industries, or markets. Central banks use these flow of funds statements to acquire macroeconomic data, to publish cash inflow and cash outflow statements of the nation. This flow of funds system is utilized to identify economic activity and changes in the economy. It is used by Federal Reserve to determine the Gross Domestic Product (GDP) of the nation and to implement monetary policy and fiscal policies.