What are turnover ratios?

The turnover ratios or inter-statement ratios represent the quantity of any assets or liabilities used by a business entity to generate revenue through sales. The concept of turnover ratio is useful in determining the efficiency with which a business utilizes its assets. The following ratios are called Turnover Ratios or inter-Statement Ratios. Debtors’ velocity ratio…

What are profitability ratios?

Profitability ratios help a business entity as well as the lenders/investors to evaluate the ability to generate income as compared to its expenses and other cost associated with generation of income during a particular period. Profitability Ratios also help the managements in making business decision in respect of expansion or diversification of the business.  As…

What is cash management?

We find many a  time, companies struggle to meet their day to day operating expenses, not because they failed to generate adequate money out of their business but they were not able to manage their cash. Cash management speaks of a wide-ranging area of finance involving the collection, handling, and usage of cash. It also…

What is Off-Balance Sheet Exposure ?

Off-balance sheet exposures refer to activities that are effectively assets or liabilities of a company but do not appear on the company’s balance sheet. The off-balance sheet exposures in banking activities refers to activities that do not involve loans and deposits but generate fee income to the banks. The non-fund based facilities like Issuance of…

What is a subordinated debt?

Subordinated debt refers to the debt owed to an unsecured creditor. In the event of the bankruptcy or liquidation of the debtor, the court will prioritize the outstanding loans which the liquidated assets shall repay. Therefore, subordinated debt can only be paid if any assets left after the claims of secured creditors have been met.…