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 over and under capitalisation of a company. Over-Capitalization of a Company: An over capitalized firm can be compared to a (fat) man who has got fat more than required and suffers from variety of diseases. Over-capitalization implies that the total capital of the company (owned capital plus borrowed capital) is in excess [...]
After reading this article you will learn about:- 1. Meaning and Concept of Capital Structure 2. Balanced or Optimum Capital Structure 3. Essentials Characteristics 4. Objectives 5. Factors. Meaning and Concept of Capital Structure: For any business (investment) project, it is essential to estimate the amount of capital likely to be required for the business. After having determined the finance [...]