Accounting

Profitability Ratios The efficiency of a business is measured by profitability. Profitability ratio measures the profit earning capacity of the business concern. A profitability ratio…

Solvency Ratios Solvency refers to the firms’ ability to meet its long-term indebtedness. It studies the firms’ ability to meet its long-term obligations. Moreover, the…

Liquidity Ratios In accounting, the term liquidity is defined as the ability of a company to meet its financial obligations as they come due. Liquidity…

Advantages of Ratio Analysis: Ratio is an expression of one number in relation to another. Ratio analysis is the procedure of formative and interpreting the…

Ratio Analysis Ratio is an expression of one number in relation to another. Ratio analysis is the procedure of formative and interpreting the mathematical relationship…

Limitations of Financial Statement Analysis Financial statements are final result of accounting work done during the accounting period. Financial statements normally include Trading, Profit and…

Significance of Financial Statement Analysis: Financial statements are final result of accounting work done during the accounting period. Financial statements normally include Trading, Profit and…

Financial statements are final result of accounting work done during the accounting period. Financial statements normally include Trading, Profit and Loss Account and Balance Sheet.…

Recording Depreciation Depreciation is directly charged against the asset by debiting Depreciation account and crediting the Asset account. Depreciation account is closed by transferring to…

Revaluation Method of Calculating Depreciation Under this method, the assets like loose tools are revalued at the end of the accounting  period and the same…