This article throws light upon the four main types of financial ratios. The types are: 1. Liquidity Ratios 2. Activity Ratios 3. Leverage Ratios 4. Profitability Ratios. Type # 1. Liquidity Ratios: Liquidity ratios reflect the firm's ability to meet scheduled short-term obligations. For the firm to remain alive, it must be able to pay its bills as they become [...]
After reading this article you will learn about the concept of capital gearing and factors affecting it. Concept of Capital Gearing: Assume that a company can issue three types of securities, i.e., equity shares, preference shares and debentures. But what should be the proportion of these securities. For this purpose, we shall study Capital Gearing. Capital Gearing determines the ratio [...]
This article throws light upon the top twelve methods used for raising finance for a company. The methods are: 1. Shares 2. Debentures 3. Public Deposits 4. Managing Agents 5. Loans from Banks 6. Ploughing Back of Earnings 7. Hire Purchase 8. Leasing 9. Profit Flowback 10. Credit Facilities 11. Trade Credit 12. Short Term Loans. Method # 1. Shares: [...]