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Long Term Lenders - Measuring Business Performance
Long term lenders
These involve finances with loans, mortgages and debenture holders. These have both short and long term interest in the company and its capability to pay not only interest on debt although also principal as and whenever it falls due. These parties are interested in the given as:
a) Liquidity ratios - utilized for to assess short-term liability to meet recent obligations.
b) Profitability ratios - utilized for to ascertain where the company can pay its principal back.
c) Gearing ratio - utilized for to gauge the company's dangerous in the investment.
d) Investment coverage ratio - exposes the company's safety like regards the payment of interest to the lenders of the debt.
Cost of capital: The cost of capital is a term related to the field of financial investment to refer to the cost of a company's funds (both equity and debt), from an investor'
The business plan for a new company that has obtained a 5 year lease for operating a local bus service is shown below. Items marked with an asterisk represent continuous cash flow
Why is cost classification important
Example of Miller-Orr Model XYZ's management has put the minimum cash balance to be equivalent to Sh.10, 000. The standard deviation of daily cash flow is of Sh.2, 500 and the
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A firm has the following accounts: What is the net income for the period? Net patient revenue = $1,500,000 Supply expense = $200,000 Depreciation expense = $100,000 Salaries and b
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